ACTION ALERT: Exxon's NAFTA lawsuit shows need for national energy strategy

September 28, 2007

On September 25, Prime Minister Stephen Harper told an audience in New York City that, "Now I know NAFTA has become somewhat of a whipping boy to some in the United States, just as it is to some in Mexico and even to some in Canada. But the fact is that NAFTA has been unequivocally good for all of our countries. In spite of the naysayers and the doomsdayers, I could recite a litany of economic statistics to demonstrate its success – which is why virtually nobody, not even the critics, dares suggest to rip it up."

The next day, as reported by the Globe and Mail, "Exxon Mobil Corp. and Murphy Oil Corp...served notice they plan to sue Canada under the North American free-trade agreement in connection with the Hibernia and Terra Nova oil projects, saying Ottawa is breaking the treaty by forcing them to spend a bigger percentage of research cash in Newfoundland...The two firms, which are required to give Canada 90 days notice under NAFTA, say they intend to file suits seeking a combined total of $50-million in damages from Ottawa...The companies say these breached terms of NAFTA by increasing their obligations to spend research dollars locally."

The Canadian Press added that, "The companies call the guideline 'restrictive' as it specifies a fixed amount of money to be invested, and cite the Newfoundland and Labrador government's push for more revenues from the offshore oil industry. 'The government of the province has increasingly encouraged the (Canada-Newfoundland and Labrador Offshore Petroleum Board) to put into place more robust local-content requirements,' the documents allege."

THE COUNCIL OF CANADIANS
Maude Barlow, chairperson of the Council of Canadians, says "this outrageous challenge is proof that NAFTA was designed for American corporate interests alone. The government of Newfoundland is simply doing what any good government would do in trying to maximize local resources to promote local jobs and prosperity. The Harper government should abrogate this flawed deal once and for all."

THE HARPER GOVERNMENT
So far, Prime Minister Stephen Harper has not responded publicly to this NAFTA challenge. Reuters is reporting that, "The Canadian government declined to discuss the specifics of the case. 'The government of Canada is currently assessing the claim and is consulting with the province of Newfoundland and Labrador and the Canada-Newfoundland and Labrador Offshore Petroleum Board,' said Valerie Noftle, a spokeswoman for International Trade Canada."

Newfoundland Premier Danny Williams has said, "Research-and-development is really very important to our province, it's very important to the industry, and I would like to think that they'd want to be positively contributing to that...But if they don't, we'll certainly fight them all the way in court."

THE OIL CORPORATIONS
According to their website, "Murphy Oil Corporation is a worldwide oil and gas exploration and production company with refining and marketing operations in the United States and the United Kingdom...Business activities are conducted by wholly-owned subsidiaries" including Murphy Oil Company, Ltd., with headquarters in Calgary, Murphy Oil USA, Inc., and Murphy Peninsular Malaysia Oil Co. Ltd.

Exxon Mobil's website says, "We are the world's largest publicly traded international oil and gas company, providing energy that helps underpin growing economies and improve living standards around the world."

Imperial Oil in Canada is a subsidiary of Exxon Mobil. Their website states, "Imperial Oil is one of Canada's largest corporations and a leading member of the country’s petroleum industry. It is one of Canada's largest producers of crude oil and natural gas, is the country's largest petroleum refiner, and has a leading market share in petroleum products sold through a coast-to-coast supply network that includes close to 2,000 service stations."

TAKE ACTION
Write the prime minister today and tell him that NAFTA should be abrogated and that a meaningful national energy strategy should be developed for Canada.

Read the Communications, Energy and Paperworkers Union of Canada - Council of Canadians media release.

Click here to find out more about the Council of Canadians energy campaign.

Sample letter

Prime Minister Harper,

Recently, you stated that "NAFTA has been unequivocally good" and that no one "dares suggest to rip it up." And yet the day after you made this statement, two American oil corporations - Exxon and Murphy Oil - served notice that they would sue Canada for $50 million because we required them, in their own words, "to put into place more robust local-content requirements," including putting a larger share of their huge profits in local research and development.

This is another example of why Canada needs a meaningful national energy strategy to satisfy our need for national energy security and an ecologically secure future. While you speak of Canada becoming an "energy superpower," the reality is that Canada is becoming nothing more than an energy satellite exporting our resources at minimal royalty rates to the United States, while importing 850,000 barrels of oil a day to meet our own needs.

I join with Maude Barlow of the Council of Canadians in saying to you, "this outrageous challenge is proof that NAFTA was designed for American corporate interests alone. The government of Newfoundland is simply doing what any good government would do in trying to maximize local resources to promote local jobs and prosperity. You should abrogate this flawed deal once and for all."

Sincerely,
<your name>

Brent Patterson, Director of Organizing and Campaigns, The Council of Canadians

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Prime Minister Harper, Recently, you stated that "NAFTA has been unequivocally good" and that no one "dares suggest to rip it up." And yet the day after you made this statement, two American oil corporations - Exxon and Murphy Oil - served notice that they would sue Canada for $50 million because we required them, in their own words, "to put into place more robust local-content requirements," including putting a larger share of their huge profits in local research and development. This is another example of why Canada needs a meaningful national energy strategy to satisfy our need for national energy security and an ecologically secure future. While you speak of Canada becoming an "energy superpower," the reality is that Canada is becoming nothing more than an energy satellite exporting our resources at minimal royalty rates to the United States, while importing 850,000 barrels of oil a day to meet our own needs. I join with Maude Barlow of the Council of Canadians in saying to you, "this outrageous challenge is proof that NAFTA was designed for American corporate interests alone. The government of Newfoundland is simply doing what any good government would do in trying to maximize local resources to promote local jobs and prosperity. You should abrogate this flawed deal once and for all." Sincerely,
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