Newspaper article The Canadian Press

Suit against Quebec Fracking Ban Show Perils of Free Trade Deals, Say Critics

Newspaper article The Canadian Press

Suit against Quebec Fracking Ban Show Perils of Free Trade Deals, Say Critics

Article excerpt

Firms sues to lift Quebec fracking ban

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OTTAWA - Free trade critics say a $250-million damage suit being pursued as a result of Quebec's moratorium on fracking is proof Canada needs to be careful in negotiating trade pacts around the world.

The Council of Canadians, the Sierra Club and Quebec-based Eau secours say the suit by Lone Pine Resources Inc. (TSX:LPR) shows that trade deals that include investor protection clauses are a bad idea because they can prevent governments from passing laws to protect the environment.

The groups are asking Lone Pine to drop the suit before a NAFTA panel, but company president Tim Granger says he is going ahead unless Quebec lifts its moratorium on fracking for natural gas under the St. Lawrence River.

"As an organization we, in good faith, purchased leases, we paid rentals and then to just have been stymied, that's not acceptable," he said in an interview.

"What we are asking for is some level of restitution for losses we have incurred and what we could have potentially received if we were allowed to develop those leases."

The statement of claim filed Sept. 6 says the company "expended millions of dollars and considerable time and resources" on the project and that the Quebec government was "arbitrary" and "capricious" in revoking the rights even before an environment study on the fracking process was completed.

The company estimates there are between 1.9 trillion and 3.3 trillion cubic feet of undiscovered natural gas trapped in the shale in the area covered by the suit, the equivalent of about half of Canada's total annual production.

But the groups say the suit has become symbolic for everything that is wrong with investor protection clauses in major trade agreements.

The Canadian case has attracted even greater scrutiny because Quebec has yet to decide whether fracking -- a process to inject fluid into the ground at a high pressure in order to fracture shale rocks to release natural gas inside -- can be conducted safely under the St. Lawrence.

"If a government is not even allowed to take a time out to study the impact without having to compensate a corporation, it puts a tremendous chill on a governments' ability to regulate in the public interest," said Ilana Solomon, director of the Sierra Club's trade program in Washington, D. …

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