Posted on January 04, 2013

by Joyce Nelson

In 2012, the horror stories about fracking just kept rolling in. There are increasing reports of livestock illnesses and deaths on farms near shale oil and natural gas operations in Alberta, Colorado, New Mexico, Pennsylvania, West Virginia, Arkansas, Louisiana, Texas and North Dakota.  According to The Nation (Nov. 28, 2012), veterinarians have ruled out other causes of strange illnesses in which (for example) cows lose their tails, then sometimes keel over and die, after fracking is underway.

Of course, the people caring for these farm animals are worried about their own health. A 2012 study from the

Colorado School of Public Health found that cancer risks for humans are 66 per cent higher for residents living less than half a mile from oil and gas wells than for those living farther away, with benzene being the major contributor to the increased risk.

In June, a report by BC’s Fraser Basin Council indicated that people in northeastern BC feel their health is being compromised by the massive drilling and fracking in their region.  Cariboo North MLA Bob Simpson says people want a full public inquiry into the health impacts of the oil and gas industry.

There’s also newly revealed devastation from open-pit mining for frac-sand, which is taking place in Alberta, Saskatchewan, and 33 US states. Fracking requires a special kind of sand to prop open the cracks blasted in the shale rock. It must be strong, chemically inert, and able to withstand high heat. About four million pounds of frac-sand are used per well.  Frac-sand mining for this special crystalline silica is, according to its opponents, ruining entire rural townships and farming counties. In BC, Stikine Gold Mining Corp. is awaiting approval for its proposed open-pit frac-sand mine 90 km north of Prince George.

Frac-sandstorms are also taking a toll, in areas where the wind whips up massive clouds of silica dust that linger for hours, threatening workers and nearby residents with silicosis and other lung disorders.

Fracking Earthquakes
The US Midwest has been hit with substantially increased earthquake activity since fracking for shale oil and gas in the Bakken fields began in earnest in 2008. A new study by the US Geological Survey revealed (Science News, Sept. 8, 2012) that between 1970 and 2000, the region experienced about 20 quakes per year, measuring at or above magnitude 3.0.  Between 2001 and 2008, there were 29 quakes per year. But there were “50 quakes in 2009, 87 in 2010, and 134 in 2011,” with most “clustered around wastewater wells.” In BC, the Oil and Gas Commission concluded this year that fracking itself is causing earthquakes.

The folks of Arkansas, who have put up with earthquake “swarms” for several years (see Watershed Sentinel, March-April, 2011), recently launched the first class-action lawsuit against oil and gas companies for unleashing earthquakes as strong as magnitude 4.7 in the northern part of the state.

In Alberta, the government has introduced draconian legislation (Bill 2) that would strip landowners and others of their right to object to any energy project that would adversely and directly affect them. The Alberta Surface Rights Group says that Bill 2 removes from the legislation any and all references that the regulator must act in the public interest, while giving the new Alberta Energy Regulator “extreme dictatorial powers to make energy related decisions.”
Then there are the water issues.  In 2012, those horror stories seemed never-ending.

Sucking Out Our Water
The BC Liberal government is reviewing 20 applications for water licenses to withdraw trillions of litres from the Fort Nelson River on Fort Nelson First Nation land in northeastern BC.

Chief Sharleen Wildeman says, “The executives at Encana Corporation are pressuring Premier [Christy] Clark to give them the right to take three billion litres of fresh water every year from the river to be used for shale gas fracking – without consulting my community who depend on the river, or without any environmental assessment.” Encana’s license is only the beginning, says Wildeman. “Eight more major oil and gas companies are now requesting similar licenses amounting to trillions of litres – the consequences of this could be devastating for the river.”

Calling the Fort Nelson River “the lifeblood of my community,” Chief Wildeman has launched an on-line petition calling on Premier Clark to place a moratorium on the issuance of all long-term water withdrawal licenses related to the shale gas industry in Fort Nelson First Nations Territory until thorough consultation and environmental assessment is complete. Tens of thousands of people have already signed the petition, Premier Clark, Don’t Give Our Fresh Water Away, which can be found at www.change.org

In June 2011, without public consultation, the BC Liberals granted Talisman Energy and Cambrian Energy permits to each withdraw 10 million litres per day from BC Hydro’s Williston Reservoir for 20 years. The companies have built a 60 km water pipeline corridor from the Williston Reservoir to Talisman Energy’s Farrell Creek fracking leases north of Hudson’s Hope.

Just weeks after the permit was granted, Talisman became a partner in the Aqueduct Alliance formed by Goldman Sachs and General Electric (see Watershed Sentinel, January-February 2012), which provides global fresh-water mapping and data for private water speculators. Talisman is currently considered a takeover target (rumoured to be ExxonMobil).

A November 2012 report, From Stream To Steam: Emerging Challenges for BC’s Interlinked Water and Energy Resources, by Ben Parfitt (Canadian Centre for Policy Alternatives) and Jesse Baltutis (the POLIS Project on Ecological Governance) recommends that the BC government do far more to manage its water and energy resources, such as metering and charging industrial users (including frackers) more for water.

While applauding the report’s incorporation of land-use planning concepts (such as cumulative impacts), Will Koop, Coordinator of the BC Tap Water Alliance, says: “The fundamental question that needs to be asked is: should fracking be allowed in British Columbia? Everything else is moot.”

This critical consideration, says Koop, “is what is missing from the Stream to Steam study. It seems as though the study considers the possibility that fracking is otherwise absorbed in the ‘sustainable use’ and ‘sustainable management’ concepts within land use governance and reform. In this sense, the report does not go far enough to elucidate this pressing concern … As I, and others, have stated, it appears that fracking is impossible to safely regulate.”

Which brings us to another fracking horror story of 2012: the NAFTA legal challenge launched against the Canadian government by natural-gas driller Lone Pine Resources.

Lone Pine Resources
In June 2011, after months of massive protests against fracking in Quebec, the Liberal government of then-Premier Jean Charest issued a moratorium on fracking, cancelled exploration permits without compensation, banned drilling beneath the St. Lawrence River, and created a panel of experts to study the environmental risks of fracking.

More than a year later, on November 8, 2012 following the election of the provincial Parti Quebecois government, Lone Pine Resources – which has its headquarters in Calgary, but is incorporated in Delaware – filed a notice of intent to sue the Canadian government for a minimum $250 million under NAFTA’s controversial Chapter 11 provisions. These provisions allow US and Mexican companies to sue Ottawa if they feel that they have been wronged by a government policy or action. Lone Pine Resources had held an oil and gas exploration permit covering 33,460 acres of land beneath the St. Lawrence River east of Trois-Rivieres.

The Financial Post (Nov. 24) reported that Lone Pine “is claiming a minimum of $250 million in damages, representing the estimated economic value of the lost resource. Lone Pine is not contesting Quebec’s right to restrict oil and gas activity, but the fact the province stripped exploration licence holders of their permits without compensation. Under NAFTA rules, governments are free to expropriate, but can only do so for public purpose, with due process and paying full and fair market value for the permit, said Milos Barutciski, a Toronto lawyer with law firm Bennett Jones which is representing the company.  Mr. Barutciski said the move, enacted by the former Liberal government of Jean Charest through Quebec’s Bill 18, was made purely for ‘political reasons’ without any basis in science.

Lone Pine Resources was spun off from Denver-based Forest Oil Corp. in 2010. Its board of directors includes Dale J. Hohm, the Chief Financial Officer of MEG Energy Corp. – one of the 10 “secret” backers of Enbridge’s Northern Gateway pipeline (who each provided Enbridge with $10 million in funding to go through the regulatory process). Another Lone Pine Resources director is Loyola G. Keough, a partner with the Bennett Jones LLP and chair of the law firm’s regulatory department.  

Investment Arbitration
A Bennett Jones lawyer (Eddie Goldenberg) has also been pushing for West-to-East tar sands pipelines (see Watershed Sentinel, Nov.-Dec. 2012).  As well, Milos Barutciski and another Bennett Jones lawyer, Matthew Kronby, have been publicly advocating the Canada-China FIPA trade deal in op-eds in the mainstream media.
The Tyee (Nov. 30) called Bennett Jones LLP “a firm that proudly offers its investor-state arbitration services to corporate clients who want to sue governments … [I]nvestor arbitration has boomed in recent years, from 38 cases in 1996 to 450 known cases last year [2011]. A small group of elite firms with for-profit arbitrators and lawyers are getting rich from these deals. Today, legal and arbitration costs average over US $8 million per dispute – and sometimes exceed US $30 million.” The lawyers involved can earn $1,000 per hour, and the arbitrators as much as US $1 million per case.
According to The Tyee, “Investment arbitration is becoming so lucrative that investment firms will actually speculate on cases, lending money to companies so they can sue governments – and then they’ll take a cut of 20 per cent to 50 per cent from the final award.”

The Sierra Club’s Ilana Solomon recently stated (Nov. 16): “By the end of 2011, corporations such as Chevron, ExxonMobil, Dow Chemical, and Cargill have launched 450 investor-state cases against 89 governments.Over $700 million has been paid to corporations under US free trade agreements and bilateral investment treaties, about 70 per cent of which are from challenges to natural resource and environment policies.…This case, however, [Lone Pine Resources] is the first to directly threaten the obligation of governments to protect its people from the destructive effects of fracking.”
With new global trade deals about to be signed – the Canada-European Comprehensive Economic and Trade Agreement (CETA), the Canada-China Foreign Investment Agreement,  the TransPacific Partnership trade act – new realms of investor-state arbitration will be opened, putting a huge legal “chill” on potential provincial legislation. The Ottawa-based Canadian Centre for Policy Alternatives recently said that such trade deals establish “a private justice system exclusively for foreign investors, including the world’s largest and most powerful multinational corporations.”

Life in the Petro-State
In May 2012, Robert F. Kennedy, Jr. wrote a memorable essay called “Petro Plutocracy,” in which he called the oil and gas industry “the world’s most powerful cartel – an international syndicate feared even by the Obama Administration.” He also called the fracking industry “an outlaw enterprise, flourishing through habitual law breaking” including illegal dumping of wastewaters, contaminating groundwater, and “illegally filling streams to build roads, pipelines and drill pads. These species of habitual lawbreakers require the protection of crooked politicians and captive agencies to insulate criminal companies from the consequences of their illegal behavior.”

In Canada, however, the Harper Conservatives simply rewrite the legislation so that what the companies are doing is no longer technically illegal. That is likely the biggest fracking horror story of 2012.

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Joyce Nelson is an award-winning freelance writer/researcher and the author of five books.