Quebec isn’t entirely sure about this whole fracking thing. Amid reports from across the continent of groundwater pollution, air pollution, deforestation, and other environmental side effects of hydraulic fracturing, the Canadian province has placed a moratorium on the practice beneath the St. Lawrence River.
That doesn’t sit well with Lone Pine Resources, a Delaware-based company that has long eyed the gas and oil that’s locked up in the Utica shale beneath the grand waterway. The company claims it spent millions to get the appropriate permits to drill, and now that the fossil fuels seem out of reach, it says Canadians need to pony up more than $250 million in compensation.
The company last month submitted a claim [PDF] to an international arbitration system seeking damages because of “Quebec’s arbitrary, capricious, and illegal revocation” of its “valuable right to mine for oil and gas under the St. Lawrence River.” The claim is based on Chapter 11 of the North American Free Trade Agreement, which allows private companies to sue governments when laws hurt their expected profits.
Needless to say, activists who want to protect the St. Lawrence River from reckless frackers are appalled by the legal action. From a Sierra Club press release:
“This egregious lawsuit — which Lone Pine Resources must drop — highlights just how vulnerable public interest policies are as a result of trade and investment pacts,” said Ilana Solomon, Sierra Club Responsible Trade Program Director. “Governments should learn from this and other similar cases and stop writing investment rules that empower corporations to attack environmental laws and policies.”
Meanwhile, Lone Pine Resources has been missing its loan repayments and desperately trying to work with its creditors in a bid to clamor out of a looming financial abyss. Coincidence much?