David Coon, MLA/Député

Quebec’s dealings with shale gas companies may have served as awarning to New Brunswick.   The neighbouring province’s moratorium on the industry has drawn a lawsuit from a company that saw its leases revoked – an avenue the New Brunswick provincial Liberals have decided not to take.   Brunswick News reported on Monday that the Liberal government has extended the licences SWN Resources Canada holds to search for shale gas in New Brunswick.    Energy Minister Donald Arseneault informed the company’s top officials in a letter sent on Sunday that the licences have been extended by one year, the maximum amount of time that current legislation allows.   Arseneault said in an interview that the extension was granted because there’s a willingness from SWN to continue its work in the province, but also in acknowledgement of the Liberal government’s proposed hydraulic fracturing moratorium and in efforts to avoid a legal battle.   “I don’t want to put the taxpayers on the hook for these kinds of decisions,”he said.“There is no doubt that they have a program that they are unable to continue because a moratorium is being put in place.   “They have shown that they want to continue their investment in New Brunswick, but at the same time they understand the current situation that we’re in and the commitment the Gallant government has with the public.”   Quebec’s moratorium on fracking for natural gas under the St. Lawrence River is the subject of a $250-million lawsuit by Lone Pine Resources Inc.   The company has stated publicly that it bought leases in good faith and is now being denied a chance to develop them.   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.   NAFTA’s chapter on investment gives foreign corporations the right to sue a government over any laws and policies that corporations allege reduce its profits.   Coon said that knowing the legal action taken against Quebec, he anticipated the New Brunswick Liberal government would renew SWN’s licences to search.  

“I expected them to do that,” Coon said.“I think they are trying to ensure that there is no immediate challenge under the free trade agreement to Ottawa on this.   “So by keeping the licences alive in the face of the moratorium, they avoid that.”   He added: “The extension of the licences is really immaterial to the moratorium.A moratorium means that there is no hydraulic fracturing, period”  

But Stewart said the moratorium alone may be enough for exploration and development companies to turn to the courts.   SWN originally signed a three-year deal in 2010 with the previous Graham Liberal government and has spent more than $47 million exploring the province for shale gas.   “The value of these licences is $47 million – that’s determined by what SWN was willing to spend”Stewart said.   With that money spent, the company now can’t move ahead with its program.   “I think that SWN, like any company, if they felt they had a legal option, they would”he said.   Stewart said the granting of the licence ensures no development will occur for a least a year.   “They are throwing away our resource potential in an amateurish attempt to save face on their own policy debacle,” Stewart said.“It’s the worst of all options because the land is just going to be tied up for another year with the absolute guarantee of no activity and no work on that land.   “Basically, the government is asking SWN to not redeploy their resources on a year-to-year basis until the premier figures out what they’re doing on shale gas.”