EU-Canada trade agreement threatens fracking bans by Financial Channel, May 8, 2013
The proposed Comprehensive Economic and Trade Agreement (CETA) between the European Union (EU) and Canada would grant energy companies far-reaching rights to challenge bans and regulations of environmentally damaging shale gas development (fracking), a new briefing by Corporate Europe Observatory, The Council of Canadians and the Transnational Institute shows. As Canadian negotiators visit Brussels this week to move the CETA negotiations further towards conclusion, “The right to say no” warns the proposed investment protection clauses in the agreement would jeopardise governments’ ability to regulate or ban fracking. Currently, EU member states are studying the environmental and public health risks of this newly popular technology to extract hard-to-access natural gas or oil, according to EUbusiness Ltd. While the majority of countries concerned with shale gas endowments are taking positions against it1, powerful oil and gas corporations are pushing back against regulation. “CETA will empower big oil and gas companies to challenge fracking bans and regulations through the back door. They would just need to have a subsidiary or an office in Canada”2, warned Timothé Feodoroff, from the Transnational Institute.
Under the North American Free Trade Agreement (NAFTA) there already exists a precedent for the legal challenges to fracking bans and regulations that could be the state of things to come in Europe. US energy firm, Lone Pine Resources Inc., is challenging a moratorium on fracking in the Canadian province of Quebec, suing the Canadian government for compensation. “The Lone Pine case shows that governments are highly susceptible to investor-state disputes against precautionary measures related to controversial energy projects”, said Stuart Trew, trade campaigner with the Council of Canadians. “An investor–state dispute system in the proposed CETA would create needless risk to European communities weighing the pros and cons of fracking.” EU member states already have experience with investor-state disputes undermining green energy and environmental protection policies. Germany is currently being sued by energy company Vattenfall because of the country’s exit from nuclear power. Vattenfall is seeking €3.7 billion in compensation for lost profits. [Emphasis added]