Alberta oil and gas companies likely to face climate litigation lawsuits making similar claims to Whistler
Alberta is chortling today after Whistler Mayor Jack Crompton’s campaign to get CNRL to pay for the resort city’s climate change costs blew up in his face over the weekend, with energy firms cancelling plans to attend an annual investment conference. Industry’s schadenfreude is not the best part of this story. That would be CNRL’s response to Crompton emphasizing the tremendous progress in reducing the carbon-intensity of its crude oil – which industry may want to do more often as climate litigation cranks up in Canada.
Calgary-based industry groups like the Canadian Association of Petroleum Producers and the Explorers and Producers Association of Canada are comically inept when it comes to promoting their members’ success reducing greenhouse gas emissions tied to oil and gas production.
Oil sands producers support carbon pricing, smaller producers and the service sector oppose it, hilarity ensues as CAPP ties itself in knots by being simultaneously for and against Alberta’s principal weapon to lower emissions.
Which is why it was refreshing to read CNRL’s stout defense of its efforts.
“Production from the oil sands, once thought to be of higher GHG emissions intensity, is now produced at levels on a wells-to-wheels basis at levels very close, or below global averages. And, there is a pathway to reduce emissions intensity well below the average with further advancements in technology,” CNRL President Tim McKay wrote in his December 14 letter to Crompton.
“In fact, Canadian Natural’s aspirational goal is to produce with net zero emissions.”
The “pathway” McKay alludes to includes the Alberta’s Carbon Competitiveness Incentives Regulation and new rules released last week to reduce fugitive methane emissions from oil and gas production by 45 per cent by 2025. Some acknowledgement of the provincial government’s efforts to encourage and support de-carbonization (the $1.4 billion Innovation Fund doesn’t rate a mention?) would have been nice, but CNRL’s oversight is a quibble in this story.
The important point here is that industry is finally bragging in public about its commitment to taking carbon out of the barrel, a point ignored in other media coverage of the spat.
And none too soon, because CNRL and the other big Alberta oil producers can expect more of these kinds of demands, including climate litigation lawsuits, currently all the rage in the United States.
For instance, three weeks ago ENvironnement JEUnesse launched a climate lawsuit on behalf of young people aged 35 and under in Quebec.
“Climate change is real and we are already feeling its consequences. Despite the abundance of scientific studies pointing in the same direction, the Canadian government is failing in its duty to take action against climate change. Instead of accelerating a green transition, Canada is subsidizing oil companies and purchasing a pipeline in our name,” executive director Catherine Gauthier said in a press release.
Prof. Cynthia Williams, the Osler chair in business law at the Osgoode Hall Law School, told Energi News that a common legal challenge, similar to Whistler’s demands on CNRL, is “attribution cases.”
“[These] are cases by counties, cities, and one state in the US against oil, gas, coal companies for their contributions to sea level rise and increased intensities of storms from their historical GHG emissions,” she said in an email.
“In these cases, the public bodies are seeking reimbursement for their costs for reinforcing sea walls, building better sewage systems, etc.”
Williams say the cases are similar to past successful challenges by governments against cigarette companies for reimbursement of medical costs caused by smoking-induced diseases.
Keith Stewart of Greenpeace points out that tobacco companies were sued unsuccessfully many times, which enabled lawyers to dredge up more and more information through discovery and court appearances. Eventually, Big Tobacco lost and lost big.
“It was actually when they got the internal documents from the companies that, in some cases, that they then were able to craft a new case that was stronger,” he said in an interview.
“The stuff that is coming out in New York’s attorney general lawsuit against Exxon Mobil for defrauding shareholders has a lot of that kind of information.”
Canadian companies enjoy stronger legal protections than their American counterparts, says Williams, in part because they are relatively protected by rules that require the losing party to pay the winning party’s legal costs, in most cases.
“So, these loss-allocation rules definitely discourage litigation,” she said.
Prof. James Coleman of the Dedman School of Law, Southern Methodist University, thinks that climate change regulations may also help Canadian oil and gas companies in attribution cases.
“For that kind of litigation, yeah, maybe regulation helps you because then maybe the government intervenes on your side on says, ‘We shouldn’t be suing each other for this generalized solution that harms everyone in the world, let’s leave it to the regulators and we can make a plausible case that we are doing enough on that,'” he said in an interview.
Stewart, Coleman, and Williams say climate litigation cases will soon start to pop up in Canada and both governments and companies can expect demands for damages – just like Whistler’s demand, only with legal teeth.
Alberta should enjoy Mayor Crompton’s discomfiture now because it appears Alberta’s government and energy companies are soon likely to be feeling that special kind of hurt when a notice of claim lands in the boss’ in-basket.
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