A Free Ticket to Frack
Trans-Pacific Partnership could boost the natural gas boom
When it comes to fracking for natural gas, corporations and communities have diametrically opposed interests. For corporations, the operative (and seemingly only) question at hand is: Will this be profitable?
For the people living in potential frack-zones, there are often a few more questions, for example: How much are you going to pay me for this? Will I be able to safely breathe the air while I sit on my front porch? Is my tap water going to catch on fire?
photo by danielfoster437, on Flickr
If people from a community (or a state, or a country) decide they’re not much interested in exploding pipelines and poisoned water wells, they have some tools at their disposal to stop hydraulic fracturing in their backyards. They can try to pass local ordinances banning or regulating the practice.
They can lobbying their elected representatives. If nothing else works, they can engage in nonviolent civil disobedience. In locales throughout the United States, the companies pushing gas extraction are running up against well-organized opposition.
While popular opposition doesn’t always stop fracking, at least citizens have options.
But if the Trans-Pacific Partnership – a massive “free trade” agreement currently under negotiation – goes into effect, it won’t much matter what the people think. Corporations will have even more power to call the shots.
The TPP is a huge deal, but the negotiations haven’t gotten much attention as they deserve. So here’s a primer: The TPP is a free trade agreement, first proposed in 2006, which has grown to encompass 12 Pacific Rim countries – Australia, Brunei, Chile, Canada, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam. The TPP covers far more ground than most ‘trade’ agreements, containing 29 chapters dealing with topics from the environment and labor to pharmaceuticals.
And yet only a handful of negotiators have seen what’s going into the text. Most members of the US Senate haven’t seen the text. Ditto for members of legislative bodies in other countries. With the exception of three chapters disclosed by Wikileaks, the public hasn’t seen the text, either. Yet more than 500 corporate advisors have seen the text, according to Public Citizen.
Here’s what we do know: The agreement contains weak protections for the environment; it will likely increase pharmaceutical prices. And the TPP would likely drive an increase in gas fracking in the US.
First, decreased regulation on natural gas exports will lead to increased pressure to frack. Second, the TPP will provide for industry-friendly dispute resolution mechanisms if corporations feel that state and local laws and regulations are standing in the way of profits.
The local impacts of gas fracking are well-documented. They include methane leakage (methane is about 50 times more potent a greenhouse gas than carbon dioxide), contaminated well water, and explosions.
But the immediate impacts are only part of the problem when it comes to gas export markets.
Before it can be shipped overseas, gas has to be supercooled and converted to a liquid. That’s because as a liquid, it’s much denser, and therefore more economical to ship. Converting all that gas to liquid is energy intensive. James Bradbury, a natural gas expert from the World Resources Institute, estimates that liquefaction and transportation creates an additional 15 percent in emissions in the lifecycle of natural gas production.
Despite the boom in US gas production, we’re still bringing in more natural gas than we ship out. Currently, the United States is a net importer of natural gas by a factor of roughly three to one. But signing on to the TPP will likely invert these figures by driving a surge in production; according to some projectsions, by 2020 the US will be a net exporter. The TPP will likely accelerate that trend by removing a significant hurdle to US gas exports.
Under the Natural Gas Act of 1938, exports of natural gas to non-free trade agreement countries require approval from the Department of Energy, which must rule that the proposed export would be in the public interest. The DOE considers a full range of factors – including economic, geopolitical, and environmental considerations relevant to the public interest, as well as the levels of domestic supply and demand for natural gas. This public interest requirement has been a key tool for local environmental groups that are fighting proposed liquefied natural gas export terminals.
Once a country has signed a Free Trade agreement with the United States – woosh – the approval process for an export facility becomes much easier. Any proposed export is automatically deemed to be in the public interest.
Which brings us back to the TPP. One of the 12 countries included in the Trans-Pacific Partnership is Japan. Following the Fukushima nuclear accident in 2011, Japan moved away from nuclear power, accelerating it use of natural gas. But domestic production cannot meet demand, since Japan produces less than 6 percent of its own natural gas. As a result, Japan is now the world’s largest importer of natural gas.
If the United States enters into a free trade agreement with Japan, there will be tremendous market pressure to frack more in the US in order to send natural gas to Japan.
Passage of the TPP would open further avenues for corporations to drag local, state, and national governments into trade tribunals over ‘damages’. Let’s say your state legislators passed a law banning fracking? Under the TPP, ExxonMobil would be able to sue your state. And the case won’t go before a US judge or be subject to laws passed by US legislators. Rather, it would go before an investor-state dispute resolution panel. The crux of the matter wouldn’t be whether the air is clean, but whether Chevron’s share prices will go up or down.
“If multinational companies sued states and cities for banning fracking, cases would be determined in international trade tribunals. Not US courts. And without the same kind of protections,” says Tia Lebherz of Food and Water Watch.
This sort of thing has already occurred under the existing North American Free Trade Agreement, or NAFTA. Take the example of the oil and gas company Lone Pine in Quebec. In October of 2013, oil and gas company Lone Pine filed a lawsuit against the government of Canada over its “right” to drill for oil and gas under the St. Lawrence River, a move made possible by the dispute arbitration mechanism embedded into NAFTA. Without any apparent irony, Lone Pine officials complained that, "Suddenly, and without any prior consultation or notice, the Government of Quebec introduced Bill 18 into the Quebec National Assembly on May 12th, 2011 to revoke all permits pertaining to oil and gas resources beneath the St. Lawrence River without a penny of compensation."
How impudent of the government of Quebec to pass a law that might eat into corporate profits – and without checking in first! Unsurprisingly, Lone Pine isn’t the only corporation getting litigious as it contemplates lost profits. More than 500 corporations have filed cases against some 90 governments for damages in investor-state disputes.
Right now New York state has in place a temporary moratorium on gas fracking, and the city of Pittsburg has passed an outright ban. If the TPP were to go into effect, those the state of New York and the city of Pittsburgh could both be sued under the agreement.
The Obama administration is lobbying Congress to approve “Fast Track” for the Trans-Pacific Partnership. Passage of Fast Track would mean Congress wouldn’t have the ability to change or amend the terms of the deal; it would only be able to give a simple thumbs up or thumbs down.
Senate Majority Leader Harry Reid and House Minority Leader Nancy Pelosi, both Democrats, have come out against Fast Track, partly in response to pressure from a broad grassroots coalition that includes labor groups, democracy advocates, and environmentalists. Negotiations were originally slated to conclude in 2013, but disagreements among the countries involved have pushed back this date. No official date for conclusion of the talks has been announced.
For a trade agreement that would elevate fracking to a corporate “right,” an indefinite delay sounds like perfect timing.