Brian Gallant's hydro-fracking moratorium is risky, expert says
McGill law professor says provinces can change laws under NAFTA but investors' rights must be respected
The incoming Liberal government is taking a risk with its promise to impose a moratorium on shale gas development, according to one legal expert.
Premier-designate Brian Gallant reaffirmed his party’s election commitment to bring in a moratorium on hydraulic fracturing, also known as hydro-fracking, on Wednesday.
Andrea Bjorklund, a professor of international commercial law at McGill University in Montreal, said the Liberals have to be careful about how the moratorium will be instituted.
Nova Scotia and Quebec have already brought in hydro-fracking bans.
The Quebec ban prompted U.S.-based Lone Pine Resources to sue the federal government for $250 million in compensation.
The lawsuit was filed after the Quebec government revoked all of the company's permits pertaining to shale gas development along the St. Lawrence River without compensation.
Lone Pine Resources alleges the provincial government’s decision is illegal under the North American Free Trade Agreement and it considers the moratorium equal to expropriation.
They are taking a small risk that they will be found to have violated international law.- Andrea Bjorklund
Bjorklund, who was a part of the U.S. State Department's NAFTA arbitration team, said provinces have the right to change laws under NAFTA, especially to protect people or the environment.
But Bjorklund said they also have to respect the rights of investors.
“They are taking a small risk that they will be found to have violated international law,” she said.
She said the Liberals will have to review what kind of promises were made to the 10 companies who have leases or licences for shale gas in the province.
“If a company has invested a great deal of money in reasonable reliance especially on particular representations by a government they are more likely able to recover,” Bjorklund said.
CBC News attempted to contact Lone Pine Resources, as well as Corridor Resources and Southwest Energy, two companies currently working in the shale gas business in the province. No one wanted to comment on the issue.
Industry group seeks meeting
Sheri Somerville, a representative with the Canadian Association of Petroleum Producers, said the industry group would like to sit down with the incoming premier to discuss the industry.
“We want to sit down, provide science-based and fact-based information to Premier-[designate] Gallant so he can make a decision on how to move forward with the industry in New Brunswick,” she said.
The Liberal platform clearly called for a moratorium on hydro-fracking.
The platform says the process will not be allowed unless extensive public consultations are held and the mining process can avoid “unacceptable risks to the environment, health and water.”
“Any decision on hydraulic-fracturing will be based on peer-reviewed scientific evidence and follow recommendations of the Chief Medical Officer of Health,” the Liberal platform stated.