Tag: NAFTA

Minnesota Water Train Proposal Exposes Flaw in Great Lakes Compact

Jim Olson, FLOW Founder

By Jim Olson

A railway company recently proposed extracting 500 million gallons of groundwater per year from Minnesota and shipping it to water-scarce states in the southwestern United States.

Although the water that would be diverted lies outside the Great Lakes Basin, and Minnesota officials said they are not likely to approve the water export proposal, the resulting controversy has renewed analysis of the Great Lakes Compact, which is designed to protect the Lakes from water diversions. And the heightened scrutiny is a good thing because part of Minnesota lies within the Great Lakes Basin.

The Great Lakes Compact has suffered from a primary weakness from the very beginning: it does not address the sale of water or consumption outside the Basin or watershed (with the exception of diversions in counties or communities that immediately adjoin the Basin). To provide for water used or diverted in products, there is a “product” exemption buried in the definition of “diversion” that permits tomatoes grown within the Basin, for example, to be shipped outside the watershed.

But buried in the definition of “product” is “water removed by human or mechanical means and transferred out of the basin” as a result of industrial, manufacturing, agriculture processes or products, and here’s the kicker, “… or intended for intermediate or end-use consumers.” So, the Compact contains a water-as-product export provision—at least to the extent that water is placed in a container. But, here’s another kicker. There is no limit to size, so railroad containers filled with water and “intended for intermediate or end-use consumer” would be exempt from the diversion ban for purchase or use by famers in Colorado, or any place on the planet.

The Compact Sec. 4.10 states in the bottled-water or “Bulk Water Transfer” provision, that water in containers larger than 5.7 gallons “shall be treated… in the same manner as a… Diversion.” What’s wrong with this language? It’s a Band-Aid that covers up the product exemption. The clause “shall be treated in the same manner as Diversion” concedes that water in a container of a certain size is not a diversion, but a product; rather than place an exemption for bottled water directly into the definition of, or as an exemption to, diversion, the negotiators and Compact tacked on a Bulk Water limit on the product exemption. But the problem is, water in any size container, whether in a railroad car or the deck of an ocean barge, is defined as a product.

So, under international trade pacts like the North American Free Trade Agreement (NAFTA) and trade laws, defining water as a “product” is admitting that this is a regulation, not a ban on bulk water diversions. The regulation of water as product lays a heavier burden on the Office of Great Lakes Governors and citizens of the Great Lakes to justify to foreign investors and countries that the export of water in large containers will not harm the environment. Worse, treating water in a container as a “product,” not a diversion, shifts the expectations of investors outside the region, who can demand equal treatment and/or massive sums of money as damages for applying the regulation to prohibit or deny their “right” to export water in containers. Why? 

A regulation to restrict the export of water as a product, as opposed to, say, a diversion, admits that the right to export water as a product exists. As indicated above once it’s a product, the Great Lakes states through the Compact governing body, the Office of Great Lakes Governors, will have to prove the regulation of the water prevents harm. If a bottled water company that has received a permit can ship water in containers less than 5.7 gallons under a permit, because a state has determined there’s no harm to water resources, how can the Great Lakes states argue water in a 10,000-gallon container from the large-volume water well can be “treated as” a diversion, when the amount of water pumped from the same well and put in a large container is no different than the amount shipped in bottles?

So, then the issue becomes factual: Can the export of water in containers be prohibited by the regulation to “treat it as” a diversion if it can be shown to harm or threaten harm to the environment or conservation. Whether water is in large containers is less than 5.7 gallons or more than that amount, if the impacts do not threaten the water, environment, or the conservation of a non-renewable resource, under international trade laws, like NAFTA or the General Agreement on Tariffs and Trade (“GATT”), its export cannot be stopped.

This is a serious problem. It was there in 2005, when the eight Great Lakes states signed the agreement that became the Compact; those close to the ink before it dried knew it, but nothing was done about it. The proposed water train from Minneapolis to Colorado may never be permitted, and it shouldn’t be. But it is a warning: the “product” exemption or loop-hole is a door that needs to be shut.

FLOW is developing a report and comment on weaknesses and future questions for states in the Compact. Clarifying the “product” exemption in the Compact is one of the critical measures that needs to be rectified. It could be done by the Compact Council through an interpretative guideline of the definition of “product.” It could be done by the legislature of each state, because the Compact allows states to impose more stringent measures than the Compact. Essentially, the fix would remove the “intended for intermediate or end-use consumers” clause in the “product” definition, and then declare that “water in any sized container” is not a product.

In the meantime, and this is critical, the best thing the Great Lakes Compact Council can do is expressly interpret and declare under Sec. 1.3 that, “The waters of the Basin” are held in, and subject to, a public trust in the waters of the Basin,” and that any consumptive use, exemption, or other exception managed or reviewed or decided by the Council is subject to the duties and overlying principles of the Public Trust Doctrine that protects the waters and citizens, quality of life, and sustainable economy in the Great Lakes region.

Fortunately, the International Joint Commission adopted a recommendation in a 2016 report that each state adopt a public trust framework, using the public trust principles as a “backstop” to future threats to the Great Lakes. The water train proposal is just such a threat and should be the impetus for the Council and states to fully implement the public trust principles that apply to the Great Lakes and their tributary waters. If not, the waters of the Great Lakes Basin could very well lose in disputes between foreign interests abroad or those in other states.

It is time for all of us who understand the essential life-giving importance of water in the Basin where it falls and flows to join with Minnesotans to stop the water train notion in its tracks, and to implement the straight-forward amendments of our water laws in each state to shut the door before the excessive demand for water in a worsening world water crisis pushes it wide open.

Thousands demand Lone Pine drop its NAFTA lawsuit against Québec’s fracking moratorium

Coalition for petition against LPR to drop NAFTA lawsuit vs. Quebec

PRESS RELEASE

For immediate publication

Thousands demand Lone Pine drop its NAFTA lawsuit against Québec’s fracking moratorium

(Ottawa, May 31, 2013) – Two weeks after the launch of a public petition, organizers have received over 3,000 signatures demanding that energy company Lone Pine Resources drop its $250 million NAFTA (North America Free Trade Agreement) lawsuit against Canada for Québec’s moratorium on fracking.

The petition sponsors—the Council of Canadians, the Réseau québécois sur l’Intégration continentale (RQIC), Sierra Club US, FLOW (For Love of Water), Eau Secours! and AmiEs de la Terre—sent three letters to Lone Pine today, each signed by 1,000 people, and will continue to collect signatures until the company agrees to drop the suit.

“People across Canada and the United States are outraged that a company would claim it has a ‘right’ to frack under trade deals like NAFTA, and that we might have to pay Lone Pine Resources not to drill in the St. Lawrence,” says Emma Lui, water campaigner with the Council of Canadians. “There should be no ‘right’ to frack, or to dig a mine, or lay a pipeline. Investment treaties cannot be allowed to override community decisions.”

“Governments must have the flexibility to say ‘no’ to fracking and other environmentally destructive practices without trade rules getting in the way,” said Ilana Solomon, Trade Representative with the Sierra Club. “The fact that a U.S. oil and gas corporation has threatened to bring a trade case against the government of Canada over a law intended to protect the health and well-being of its citizens shows just how backward our trade rules have become.”

In 2011, the Quebec government placed a moratorium on all new drilling permits until a strategic environmental evaluation was completed. When the current Quebec government was elected last year, it extended the moratorium to all exploration and development of shale gas in the province. Last fall, Lone Pine indicated that it planned to challenge Quebec’s fracking moratorium. Instead of going to court, the Calgary-based company is using its incorporation in Delaware to access the investment protection chapter of NAFTA, which is only available to U.S. and Mexican companies, to challenge the Quebec moratorium in front of a paid, largely unaccountable investment tribunal. The company says the Québec moratorium is “arbitrary” and “capricious,” and that it deprives Lone Pine of its right to profit from fracking for natural gas in Québec’s Saint Lawrence Valley.

“Lone Pine must drop its scandalous lawsuit against this legitimate policy of the Quebec government, who has just been listening to its people,” says Pierre-Yves Serinet, coordinator of the Quebec Network on Continental Integration (RQIC). “These provisions of such free trade agreements are direct attacks on the sovereign right of the Quebec government to govern for the welfare of its population. It’s astonishing that the negotiations between Canada and the European Union (CETA) follow the same blueprint. Time has come to end the excessive powers to multinationals,” added the spokesperson for RQIC.

“No trade tribunal should allow a company to sue a State that tries to protect water, which is a common good at the core of the survival and the health of the peoples and the ecosystems. Eau Secours! presses the Quebec government to also change its antiquated law on mining, to improve its water law and its sustainable development regulations to clearly reaffirm this willingness of protection,” declared Martine Châtelain, president of the coalition for a responsible management of water Eau secours!.

“Water in North America is part of a single system, starting with hydrologic cycle, and subject to generational public trust responsibility,” says Jim Olson, Chair and President of FLOW. “A moratorium that exercises this responsibility can hardly be challenged as a regulation: public trust and water have inherent limits.”

The NAFTA dispute and letter-writing campaign is happening as the Parti Québécois introduces legislation that would ban fracking in the St. Lawrence Lowlands for up to five years. The organizations involved in the letter-writing campaign are encouraged by the decision but support a complete Quebec-wide moratorium on fracking for oil and gas.

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MORE INFORMATION

Emma Lui, Water Campaigner, Council of Canadians,

613-298-8792elui@canadians.org

Twitter: @CouncilOfCDNs | www.canadians.org/fracking