An America company intends to sue the Canadian government for more than $250 million over Quebec's controversial moratorium on hydraulic fracturing or fracking.
Lone Pine Resources Inc. (TSX:LPR), which is incorporated in Delaware but headquartered in Calgary, has filed notice that it intends to sue under provisions of the North American Free Trade Agreement.
Lone Pine says the Quebec government's move to cancel a natural gas exploration permit for deposits beneath the St. Lawrence River last year was "arbitrary, capricious and illegal."
Details of the claim for arbitration are contained in a notice filed Nov. 8 on the website of the Department of Foreign Affairs and International Trade.
Lone Pine cites Article 1117 under NAFTA in making its claim for the loss of a "valuable right ... without due process, without compensation and with no cognizable public purpose."
Lone Pine says the suit has been filed against Ottawa because it is responsible for acts by provinces both under NAFTA and international law.
Quebec passed the moratorium in order to study the controversial process in which fluid under high pressure is pumped underground to release petroleum from rock formations.
Environmentalists contend fracking risks contaminating ground water, while the industry says it can be done safely.
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