The Current

U.S. company trying to sue Canada over coal phase-out made a bad bet, says academic

Canadian plans to stop using coal have left one U.S. company crying foul. Westmoreland Coal owns seven Canadian coal mines, and claims that it should be receiving part of the $2 billion in government compensation being offered to the Canadian companies being told to phase out operations.

Westmoreland Coal Company wants compensation under NAFTA rules

Alberta's plan to phase out coal by 2030 includes close to $2 billion in compensation for three Canadian companies, but a U.S. company argues it is entitled to a share of that money. (CBC)

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A U.S. company that owns coal mines in Canada is considering suing the federal government over the phasing out of the fossil fuel, but one academic calls that plan "a bad bet."

"Coal is on the way out," Kyla Tienhaara, Canada Research Chair in Economy and Environment at Queen's University, told The Current's guest host Matt Galloway.

She added that Westmoreland Coal Company should have been aware of this when they bought seven mines in Canada in 2013.

International governments have been ramping up their efforts amid an increased urgency to reduce greenhouse emissions, said Tienhaara.

"I think [they made] a bad bet, and why should we pay for it?"

In 2015, Alberta Premier Rachel Notley announced the province will phase out coal by 2030, a plan that includes close to $2 billion in compensation for three Canadian companies.

Erin Flanagan of the Pembina Institute and Cenovus CEO Brian Ferguson weigh in on proposed carbon tax 8:30

Westmoreland, a Denver-based company which has five mines in Alberta, argues that under NAFTA rules it's entitled to some of that compensation. Under Chapter 11 rules, the company served a statement of claim to the Canadian and Alberta governments in November.

Under the old NAFTA agreement, Chapter 11 guarantees foreign companies that if they do business here, they'll be treated the same as a Canadian company. The clause has been removed from the new Canada-U.S.-Mexico Agreement (CUSMA), which was signed in November but is yet to be ratified. 

The Current requested a comment from Alberta's Minister of Energy, Margaret Ellen McCuaig-Boyd, but was told the ministry will not be commenting on this action.

Coal mining does not have any anything to contribute to that transition.- Kyla   Tienhaara

In a statement, Westmoreland told The Current it was not seeking any change in the phasing-out policy, but "rather non-discrimination, fair and equitable treatment to that provided to other operators for the losses incurred by the policy changes, in order to sustain contained continued operations, and the eventual environmental reclamation."

Tienhaara argued that the Canadian companies being compensated are utility companies, which will be switching over to gas and renewable energy. Compensation is intended to help those companies achieve that.

"Coal mining does not have any anything to contribute to that transition," she said, adding that the phase-out plan does not ban Westmoreland from mining coal and exporting it elsewhere.

"I just don't see that they're in the same situation."

Click 'listen' near the top of this page to hear the full conversation.

Written by Padraig Moran. Produced by Howard Goldenthal and Julie Crysler.


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