The promoters of GNL Québec do not digest the rejection of their project. As part of their efforts to claim billions of dollars in compensation, they also directly attack the Legault government, accused of having acted in an “arbitrary, unjust and discriminatory” manner. American shareholders also severely criticize Quebec’s environmental assessment process, which they consider to be “biased”.
The company behind Alberta’s maritime natural gas export project filed a request for arbitration with the World Bank’s International Center for Settlement of Investment Disputes (ICSID) in February. Ruby River Capital, the American shareholder that controls Symbio Infrastructure, the entity behind GNL Québec and Gazoduq, affirms that the rejection of the project contravenes the rules of the North American free trade agreements.
In a 50-page document detailing its arguments and published recently, Ruby River Capital assesses the losses attributable to the rejection of its project at at least 20 billion US dollars, or more than 27 billion Canadian dollars. The California-based company also indicates that this amount will be specified later.
The promoters of GNL Québec claim to have been victims of “arbitrary, unfair and discriminatory treatment” in the context of the development of the liquefaction plant, the marine terminal and the gas pipeline to supply the industrial complex which would have been built in Saguenay. The governments of Quebec and Canada would thus have carried out a form of disguised expropriation by refusing to authorize these projects, following the environmental assessments carried out according to the procedures provided for by the laws in force in the country.
“Political agenda”
The criticisms directed against Quebec are numerous and particularly virulent. The document thus underlines that the Legault government would have “illegally instrumentalized” the environmental process in order to respond to “its political agenda”, in the wake of the report produced by the Bureau d’audiences publiques sur l’environnement (BAPE) and published in March. 2021.
We regret that the Minister of the Environment of Quebec, Benoit Charette, then “imposed” criteria “designed solely to negatively target the project”. These three conditions stipulated that the promoters had to demonstrate the “social acceptability” of GNL Québec, but also its role in the context of the “energy transition”, and its ability to generate a “reduction” of greenhouse gas emissions. ” worldwide “. The Minister then mentioned these elements to close the door to the project, which the promoters today associate with a political maneuver in view of the elections.
The latter ensure that, as early as 2016, the Quebec government had nevertheless shown “great enthusiasm” for the idea of building a liquefaction plant to facilitate the export of Alberta’s growing gas production.
The document posted online recently mentions financial promises that would have first been made by the Liberals of Philippe Couillard, including tax holidays and a participation of Investissement Québec in the project. It also recalls the positions taken in favor of GNL Québec formulated by three CAQ ministers, including Benoit Charette, but also by Prime Minister François Legault. In February 2020, the latter claimed that the industrial complex could “help the planet” to fight the climate crisis.
Critics of the BAPE
Symbio Infrastructure’s plea also bluntly criticizes the BAPE, which is accused of having conducted “biased” hearings that led to the writing of an equally “biased” report. This report would contain, according to the company, “speculative allegations” concerning the greenhouse gas emissions attributable to the project to produce 11 million tonnes of liquefied natural gas annually from gas exploited mainly by fracturing. The promoters repeat that the industrial complex would have been “carbon neutral”, an assertion which has never been demonstrated, according to the conclusions of the BAPE.
After this report, concerns about the impacts of industrial maritime traffic generated by the project have also become “drastic and intransigent”, according to the promoters of GNL Québec. The document filed with the World Bank states that the increase in noise pollution in beluga habitat would have been “negligible”, even if the addition of LNG carriers would have had the effect of practically doubling maritime traffic on the Saguenay. , in a critical area of the species’ critical habitat. Scientists from the governments of Canada and Quebec have warned of the risks of maritime traffic for this endangered cetacean.
The request for arbitration is also very critical of the approach of the federal government, which would have gradually taken a position against the project in 2021, so as not to “run the risk of contradicting Quebec” in the middle of an “election year”.
It is precisely Ottawa that must respond to the company’s accusations, since it is Canada that is a signatory to the free trade treaties mentioned to claim “damages”. We also specify that the process is being carried out in particular under “Chapter 11” of the North American Free Trade Agreement (NAFTA), which protects the rights of foreign investors and which was in force at the time the project was submitted in view of the environmental assessment process.
Ottawa would thus have imposed “discriminatory” treatment on the American company, while it approved other production and liquefied natural gas projects, including LNG Canada, which is larger than Énergie Saguenay. The documents also mention the approval of the Bay du Nord megaproject, which will generate greenhouse gas emissions and will be carried out in an area known to be the habitat of endangered species. We also recall that Quebec and Ottawa have also authorized projects that will increase commercial maritime traffic on the Saguenay.
A “classic” case
Assistant professor at the Faculty of Law of the University of Sherbrooke, Laurence Marquis underlines that the approach of the shareholders of GNL Québec is a “classic” case in the context of the provisions of NAFTA. But the company will have to demonstrate the “discriminatory” treatment and the “expropriation” of which it says it has been the victim.
“She will also have to demonstrate that she had every reason to believe that her project would be approved. We will have to see what will be presented as evidence to demonstrate that it was encouraged to invest 120 million US dollars in the development of the project. “According to M.me Marquis, however, it is difficult to predict the outcome of the process, which should last “a few years”.
Lawyer at the Center québécois du droit de l’environnement, Marc Bishai points out that this situation demonstrates the risk taken by elected officials in taking a position on such a project before the environmental assessment process is completed. With regard to the request for arbitration, it illustrates, in his view, an attempt by the fossil fuel industry to demonstrate that “it is here to stay”, even if the energy transition in progress and the changes in public opinion show that the decline is well underway.
Invited to react to the attacks of the promoters of GNL Québec, the office of the Minister of the Environment Benoit Charette did not wish to comment. “As legal proceedings are underway, we are not going to comment on the case. »