On Wednesday, federal Environment Minister Steven Guilbeault gave the green light to a new Coastal GasLink natural gas liquefaction and marine terminal project, Cedar LNG, in Kitimat, Colombia. British. We are talking here about a floating liquefaction plant that will be called upon to process 11.3 million cubic meters of gas per day.
A year, to a few weeks, after the rejection of the LNG Quebec project in Saguenay, we are left with the ugly impression of being reduced to confronting the oil and gas hydra armed with a fly killer. It’s that complacency with regard to Cedar LNG was appropriate for the provincial government. Before the blessing of the federal government, the project obtained without much difficulty that of the government of British Columbia, after a two-year environmental assessment.
Questioned about its decision, Minister Guilbeault’s office declared this week that this project was accompanied by a credible plan to achieve carbon neutrality by 2050. It also took care to mention the obligations that will be imposed on it in order to “guarantee its compliance with Canada’s long-term climate change commitments”.
The problem is that urgency is not a long-term issue, but a very, very short-term one. A carbon neutrality horizon set at 2050 is far too distant to hope to achieve the greenhouse gas reduction targets recommended to succeed in limiting global warming to 1.5 degrees compared to the pre-industrial era. However, emissions should be capped by 2025, and reduced by 43% by 2030, compared to 2019 levels. The march is enormous and the window of opportunity is not calculated in decades, but in years. . And anyway, the very idea of a carbon-neutral exploitation of hydrocarbons is a dangerous mirage.
The Cedar LNG project is not the only liquefied natural gas project under development in western Canada. The Ksi Lisims LNG complex in northern British Columbia is also progressing. If approved, it will be called upon to produce 12 million tonnes of liquefied natural gas annually, for at least 30 years. This is a larger operation than what GNL Quebec proposed in the Saguenay.
Precisely, while it was believed to have won at least this victory against gas exploitation in the east of the country, fate wanted that the approval of Cedar LNG coincides with the deposit, by the shareholder of the plant project and Énergie Saguenay terminal, a request for arbitration with the International Center for Settlement of Investment Disputes (ICSID), an arbitration body affiliated with the World Bank. The promoter of GNL Québec is contesting the rejection of the project, which occurred last year, claiming billions of dollars in compensation and damages from the Canadian government.
This scheme to compel states to compensate investors who feel wronged by decisions based on their national laws and the public interest is nothing new. It was also discussed a lot during the negotiations surrounding the adoption of the Trans-Pacific Partnership Agreement in 2016, then the creation of the Canada-United States-Mexico Agreement (CUSMA) in 2018. This is a technical issue, arid, but likely to have considerable repercussions on democratic life.
This is usually among the most delicate and contentious elements of trade and investment treaties: determining the remedies available to investors against the “host” states of their capital, and assessing the impact of these mechanisms on legislative activity. , that is to say, the possibility for governments to develop public policies in the interest of their population.
Transnational investment arbitration has developed hand in hand with the globalization of economic activities. It has become, over time, a kind of monster, both in terms of procedural fairness and in terms of its compatibility with democratic practice. On the very principle, one can contest this subordination of legislative activity to the rules of trade and the imperative of free circulation of capital. In terms of form, we also note that these ad hoc bodies, parallel to national jurisdictions, generate an entire industry that depends on the proliferation of disputes between investors and States.
There is an abundant literature that highlights these deviations, as well as the constraining effect of these mechanisms on public policies (particularly in environmental matters). To the point where several experts today call for the pure and simple abolition of arbitration between investors and States (“ Investor-State dispute settlement “, to use the established expression), especially in a context where governments will have to take tough, courageous decisions in the years to come if they want to stand up to the oil lobbies and succeed in their ecological transition.
Of course, we cannot predict the outcome of the lawsuit brought against the Canadian government in the case of GNL Québec, but the gesture itself sends a clear message (which does not surprise anyone, by the way). Oil and gas interests are entrenched here and they won’t let go without reaping their share of the pie, and it’s increasingly clear that the Government of Canada has chosen the path of resignation.
Columnist specializing in environmental justice issues, Aurélie Lanctôt is a doctoral candidate in law at McGill University.