American Gas Firm Launching $250 Million NAFTA Challenge to Quebec Fracking Ban


Read this story from the Globe and Mail on US energy firm Lone Pine Resources’ forthcoming NAFTA challenge regarding lost economic opportunities resulting from Quebec’s ban on natural gas hydraulic fracturing. (Nov. 15, 2012)

A U.S.-incorporated energy firm, Lone Pine Resources Inc., is taking on Quebec’s stand against fracking, saying it violates the North American free-trade agreement and demanding more than $250-million in compensation.

Lone Pine Resources Inc., headquartered in Calgary but incorporated in Delaware, disclosed in a filing with the U.S. Securities and Exchange Commission this week that on Nov. 8, it filed a notice of intent to sue the Canadian government under NAFTA’s controversial Chapter 11.

Those provisions of the trade treaty allow U.S. and Mexican companies to sue Ottawa if they feel they have been wronged by a government policy or action.

Lone Pine is just one of many major natural gas companies affected by Quebec’s moratorium on hydraulic fracturing, or fracking, which involves injecting liquids deep into the ground. Fracking has been controversial over fears for its effects on the environment and drinking water, and has been banned in several European countries. The industry says that done properly, it is safe.

According to Lone Pine, Quebec passed legislation last June that, in addition to the moratorium, also completely cancelled permits for oil and gas activity in areas directly below the waters of the St. Lawrence River – including the revoking of a permit held by Lone Pine covering 33,460 acres.”

Company spokesman Shane Abel said in an interview that Quebec’s legislation denies the company any compensation for the loss of its permit.

“We think that the expropriation is arbitrary and without merit,” he said. “… We think that’s a clear violation of the NAFTA agreement.”

The NAFTA challenge, levelled at a major environmental policy, is fuel for critics of trade deals who are now attacking Canada’s proposed investor-protection agreement with China, which would extend similar rights to Chinese investors in Canada.

“It contradicts everything the government has said about the China investment treaty, about it having no impact on the environment and there being no threats to non-discriminatory environmental measures,” said Stuart Trew, trade campaigner with the Council of Canadians.

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