InvestingDaily.com

Account Information

  • My Account

    Manage all your subscriptions, update your address, email preferences and change your password.

  • Help Center

    Get answers to common service questions, ask the analyst or contact our customer service department.

  • My Stock Talk Profile

    Update your stock talk name and/or picture.



Close
FEATURED STRATEGY

$1,230 in Instant Income?

$1,230 in Instant Income?Our top income expert recently pulled the wraps off his breakthrough moneymaking technique. And he proved beyond a shadow of a doubt how you can use it to generate instant cash payouts of up to $1,230 (or more). Over and over again. But then he took things a big step further and guaranteed you can make $1 million by following his program. And the second he did, our phones went nuts! Space is limited — get the details here.

 

 

Green Politics Ain’t Beanbag

By Ari Charney on January 8, 2016

When it comes to the Keystone XL pipeline, TransCanada Corp. (TSX: TRP, NYSE: TRP) won’t go gentle into that good night.

The Canadian pipeline company lobbied the U.S. government for seven years for approval of Keystone, and in the wake of President Obama’s rejection of the project in November, TransCanada now wants its day in court.

On Wednesday, the company announced that it intends to file a claim under the North American Free Trade Agreement (NAFTA) that the Obama administration’s decision was “arbitrary and unjustified.”

The company has also filed a lawsuit in the U.S. Federal Court in Houston, Texas, asserting that the president’s denial exceeded his authority under the Constitution.

TransCanada clearly hopes to recoup some of the money it’s already invested in the project, especially considering that it will be taking a write-down estimated to range between C$2.5 billion and C$2.9 billion on its fourth-quarter financials. From a shareholder standpoint, that’s already priced into the company’s stock.

TransCanada hopes to recover as much as US$15 billion in costs and damages through NAFTA. That number is derived not just from the money the firm has already invested in the project, but also from the estimated value of the project had it been completed.

Meanwhile, the company’s suit against the U.S. government is aimed at overturning the president’s ruling, thereby allowing it to proceed with constructing the pipeline.

As investors, we’d love to see TransCanada get another bite at the apple, whether that comes from finally building the pipeline or winning back some of what it’s lost via NAFTA.

But as with all things Keystone thus far, this process will be long and drawn out. The company expects at least several years of legal wrangling.

Regardless of the merits, does TransCanada have any hope of success in these venues?

The Center for Strategic & International Studies’ exhaustive review of investor-state dispute settlements around the world suggests that a win under NAFTA would be more akin to a moral victory than a monetary one. The study found that when investors prevail in such disputes, the awards are typically a tiny percentage of the initial claim, averaging less than 10 cents on the dollar.

And when the focus narrows to NAFTA, the U.S. has a nearly undefeated track record—it’s lost just one of 14 trade appeals filed.

Meanwhile, past lawsuits challenging presidential rulings on permits have generally been decided in favor of the government.

The courts have said the president has the power to rule on these matters based on the office’s Constitutional authority to conduct foreign policy.

As Reuters notes, however, these lawsuits were mostly on procedural grounds rather than the Constitutional case that TransCanada is making. But while the federal suit could set new precedents for legal geeks to mull over, it may not do enough for TransCanada.

But TransCanada has another path to victory on Keystone that could occur far sooner than any legal outcome, and with greater odds of success: The U.S. presidential election.

All five of the top Republican candidates are favorably disposed toward Keystone.

And while Democratic frontrunner Hillary Clinton recently said she’s opposed to Keystone, that announcement came late enough in the game to suggest that her stance is more informed by political marketing than ideology.

Still, sometimes that’s all that matters, especially if environmentalists spend heavily on Clinton’s campaign.

But overall, a closely divided U.S. electorate means that TransCanada’s best odds are at the ballot box next November, not through the courts.


You might also enjoy…

 

Obscure Tax Law Forces This Company to Pay Out 90% of its Profits

A 50-year-old loophole is forcing one company to pay out $9 of every $10 it makes from ironclad contracts with the U.S. Government.

In fact, over the past seven years, it’s made payments ranging from a few dollars… to tens of thousands of dollars… 30 times. Without a single cut! 

Most folks don’t even know this company exists, but the ones that do are making a mint.

Like Ted B., who’s set to receive a check for $1,096 just a few days from now.

Merrill H., a 58-year-old from New York, has collected over $3,385 so far. 

And retirees Beth and Terry P. have raked in $16,555.

I’ve put together a special report that will give you all the details, including simple instructions on how to get your name on the payout list before the next cutoff date.

You can get your copy here.

Stock Talk — Post a comment Comment Guidelines

Our Stock Talk section is reserved for productive dialogue pertaining to the content and portfolio recommendations of this service. We reserve the right to remove any comments we feel do not benefit other readers. If you have a general investment comment not related to this article, please post to our Stock Talk page. If you have a personal question about your subscription or need technical help, please contact our customer service team. And if you have any success stories to share with our analysts, they’re always happy to hear them. Note that we may use your kind words in our promotional materials. Thank you.

You must be logged in to post to Stock Talk OR create an account.

Create a new Investing Daily account

  • - OR -

* Investing Daily will use any information you provide in a manner consistent with our Privacy Policy. Your email address is used for account verification and will remain private.