Californian almond farm ruined by fracking company operations

In January 2010, a farmer was awarded USD$8.5million damages by an unconventional shale gas extraction (USGE) company that had been found guilty of contaminating local waters that had accessed his farmland.

Farmer Fred Starrh of Kern County, California owns 6,000 acres of farmland that harvested pistachios, alfalfa, cotton and almonds.

Oil and Gas company Aera Energy are estimated to have dumped 2.4billion barrels of ‘produced’ fracking waste water into unlined percolation ponds on the edge of Mr Starrh’s land.

Mr Starrh noticed the environmental damage after he mixed his ground water with local aqueduct water that watered his cotton plants, before they wilted heavily. The water also killed off almond trees that he had managed to farm at 155 per acre.

Mr Starrh had considered that contaminants of the produced frack waste water could have caused the pollution. Well waters within his land were tested and were found to be positive for boron and chloride – two chemicals associated with the USGE callied out by Aera Energy, a joint venture between Shell and Exxon Mobil.

After a nine year court case, Mr Starrh was awarded $8.5million in damages by Kern County Court. However, despite winning his case against Aera Energy, Starrh appealed the court decision, stating that, as a result of the damage caused by Aera, he will need as much as $2 billion to rehabilitate his land and construct terraced ponds to properly “flush” his soil and groundwater of toxins.

Mr Starrh was in court again last year as a jury retired on 8th March 2013 to determine wether Mr Starrh be awarded further punitive damages from Aera Energy in order to fully remediate his land.

As a result of previous findings about Aera’s responsibility for the pollution, much of the case has revolved around the usefulness of Starrh’s native groundwater with regard to irrigation.

Aera’s lead attorney, Stephen Kristovich recalled testimony that the area’s groundwater has long been understood to be too salty and with too much boron to work on crops, hence the farming boom that arrived with the California Aqueduct in the 1960s.

Starrh’s attourney Ralph Wegis countered by referencing studies suggesting that at least 20 different crops can live on Starrh’s native groundwater.

In a practice he called ‘devoid of morals’, Wegis drew attention to Aera’s use of an accounting concept known as “net present value” to make, or help make, strategic decisions. By using the system, Wegis claimed Aera used net present value to determine that it was more profitable over the long run — even in the event of a jury’s award of punitive damages — to let the groundwater pollution continue into Mr Starrh’s farmland, rather than offer remediative or preventative measures.

Kristovich responded by saying that net present value has been just one of many criteria guiding Aera’s decisions, and that the others include environmental responsibility. He added, “There’s nothing wrong with using economics and using that as part of your decision-making process.”

In his rebuttal, Wegis told the jury that Aera decided it was in its best financial interest to wait rather than stop the pollution.

The jury returned 13th March 2013 to deny Mr Starrh further punitive damages, stating that Aera Energy’s contamination of the adjacent aquifer was accidental.

Mr Starrh was dissapointed in the result, “I was totally devastated, that’s all,” Starrh said. “I couldn’t accept it from a personal perspective.”

Mr Starrh and his attourney Ralph Wegis will re-appeal the decision.
Fred starrh
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References

1) Millar, J. (2010). Oil and Water Don’t Mix with California Agriculture. Available: http://www.hcn.org/issues/42.21/oil-and-water-dont-mix-with-california-agriculture. Last accessed 17/04/2010

2) The Bakersfield Californian. (2013). Aera-Starrh lawsuit goes to jury. Available: http://www.bakersfieldcalifornian.com/business/x837007080/Aera-Starrh-lawsuit-goes-to-jury. Last accessed 17/04/2014.

3)The Bakersfield Californian. (2013). Akern grower gets another bumper crop of disappointment. Available: http://www.bakersfieldcalifornian.com/business/oil/x738927654/Kern-grower-gets-another-bumper-crop-of-disappointment. Last accessed 17/04/2014.

Canadian government to be sued over Quebec fracking ban

Oil and Gas company, Lone Pine Resources is currently aiming to sue the Canadian Government for CDN$250million, in response to a moratorium placed on unconventional shale gas extraction (USGE) in the provence of Quebec.

Lone Pine Resources had obtained permits relating to oil and gas extraction in different areas, including underneath the length of St. Lawrence River, an area that Lone Pine have calculated to contain between 1,870 – 3,346 billion cubic feet of thermogenic gas. Lone Pine state that the moratorium is an infringement of their right to conduct USGE under the river.

Canadian flag

Due to public pressure and scientific studies linking USGE to pollution of air, soils and water, the Quebec Government introduced Bill 18 into the Quebec National Assembly, which revoked all permits related to oil and gas under the St. Lawrence River.

The Bill received Royal Assent and a further document, Bill 37 placed a moratorium on the USGE project in June 2011, which was then expanded to autumn 2012. The moratorium banned drilling under the St. Lawrence river until an environmental evaluation of the potential effects of USGE on the environment were in place.
frack-lonepine
Lone Pine Resources responded on 6th September 2013, with a CDN$250 million notice of arbitration under chapter eleven of the North American Free Trade Agreement (NAFTA). Lone Pine Resources also state that the Government of Quebec have violated their obligations under Article 1110 of NAFTA which provides Lone Pine Resources the right to mine for oil and gas under the St. Lawrence River.

Lone Pine claim that not only were they not consulted on the moratorium or revocation of permits, but neither were they compensated for any money invested into the unconventional shale gas extraction project itself.

In paragragh (10) of the lawsuit, they claim:
“The Act is a clear violation of Canada’s obligations under Chapter Eleven of the NAFTA, including Canada’s obligation under Article 1105 to accord U.S. investors with “treatment in accordance with international law, including fair and equitable treatment and full protection and security,” and also of Canada’s obligation under Article 1110 not to expropriate investments of U.S. investors without a public purpose, without due process, and without the payment of compensation.”

Continuing in paragraph (11) of the lawsuit, Lone Pine state that:

“[we] submit[s] this arbitration on bahalf of the Enterprise under Article 1117 of the NAFTA, for the arbitrary, capricious, and illegal revocation of the Enterprise’s valuable right to mine for oil and gas under the St. Lawrence River by the Government of Quebec without due process, without compensation, and with no cognizable public purpose. The Government of Canada is responsible for Quebec’s acts under the NAFTA and applicable principles of international law.”

Furthermore, in paragragh (53):
“Lone Pine Resources hold the Canadian Government to its obligations in under Article 1105 of the NAFTA which obliges Canada “accord to investments of investors of another Party treatment in accordance with international law, including fair and equitable treatment and full protection and security.”

Lone Pine’s lawsuit has been publicly condemned:

“This egregious lawsuit — which Lone Pine Resources must drop — highlights just how vulnerable public interest policies are as a result of trade and investment pacts,” said Ilana Solomon, Sierra Club Responsible Trade Program Director. “Governments should learn from this and other similar cases and stop writing investment rules that empower corporations to attack environmental laws and policies.”
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References

1) The Canadian Press. (2012). Ottawa sued over Quebec fracking ban. Available: http://www.cbc.ca/news/business/ottawa-sued-over-quebec-fracking-ban-1.1140918 . Last accessed 16/04/2014.

2) Bennett Jones LLP. (2013). NOTICE OF ARBITRATION UNDER THE ARBITRATION RULES OF THE UNITED NATIONS COMMISSION ON INTERNATIONAL TRADE LAW AND CHAPTER ELEVEN OF THE NORTH AMERICAN FREE TRADE AGREEMENT. Available: http://www.international.gc.ca/trade-agreements-accords-commerciaux/assets/pdfs/disp-diff/lone-02.pdf. Last accessed 16/04/2014.

3) The Government of Canada. (2013). NAFTA – Chapter 11 – Investment. Cases Filed Against the Government of Canada. Lone Pine Resources Inc. v. Government of Canada. Available: http://www.international.gc.ca/trade-agreements-accords-commerciaux/topics-domaines/disp-diff/lone.aspx?lang=eng. Last accessed 16/04/2014.

4) Byrnes, D and Trew,S.. (2013). LONE PINE RESOURCES FILES OUTRAGEOUS NAFTA LAWSUIT AGAINST FRACKING BAN Canada, Quebec, and U.S. Environmental Groups Denounce Case. Available: http://content.sierraclub.org/press-releases/2013/10/lone-pine-resources-files-outrageous-nafta-lawsuit-against-fracking-ban. Last accessed 16/04/2014.