QUEBEC VILLAGE TAKES ON OIL FIRM
Drilling at root of ‘David vs. David’ clash
MONTREAL • A trial that opened this week in a courthouse on Quebec’s Gaspé Peninsula is being described as a David-and-Goliath clash pitting residents of a small town against a greedy oil company.
Ristigouche-Sud-Est, population 157, says it will be driven into bankruptcy if it loses the $1-million lawsuit, and it has turned to crowd-sourcing and hired a public-relations firm to raise $280,000 toward its defence.
But the plaintiff in the case is no Exxon or BP. Gastem Inc., an independent Montreal-based oil and gas exploration company that employed fewer than a dozen people at its peak, had set its sights on a property seven kilometres north of the Ristigouche town centre.
It had all the necessary permits for an exploratory well and had spent $1 million on preparatory work. But then, it claims, fear-mongering ecologists prompted the town to pass a water-protection bylaw in 2013 that blocked the drilling. Gastem president Raymond Savoie says his company is no polluting Goliath, and he just wants to recover money invested in good faith. “It’s David against David,” he said in an interview.
In the public eye, Gastem has been cast as the villain seeking to drive a small town to ruin. Ristigouche has rallied support from major environmental groups, including the David Suzuki Foundation and the World Wildlife Fund. Its fundraising campaign has exceeded expectations, amassing donations from fellow municipalities, unions, politicians and ordinary citizens. Children sold handmade crafts at a flea market and sent a $43 cheque to the cause, Mayor François Boulay recounted. Two women from the distant Outaouais region did a 20-kilometre swim to raise money.
“It’s been absolutely incredible. I’m just in awe,” he said in an interview.
Meanwhile Savoie, a former Liberal cabinet minister under Robert Bourassa, has essentially shuttered Gastem and is left wondering how he became the bad guy.
According to Gastem’s statement of claim, the company met with the town council in 2011 and received an unofficial approval for its well. It signed leases with property owners, commissioned a study showing the work would be environmentally safe and in 2012 was granted a provincial permit for exploratory drilling. It built a drilling platform, spending about $1 million. (Gastem initially claimed $1.5 million in damages, but this week in court it lowered the sum, acknowledging some of the expenses had been reimbursed while other work was never performed.)
The company says it was only when environmental activists ramped up a provincial campaign against oil and gas development that the municipality got cold feet. Savoie said environmentalists lobbied towns across Quebec to enact bylaws preventing drilling.
“If you tell a neighbour in the country that it’s going to poison your water, they take note,” Savoie said.
In 2013, Ristigouche passed a bylaw prohibiting drilling within two kilometres of a well or surface water. The bylaw also requires companies seeking a drilling permit to submit a $1-million deposit.
Overnight, Savoie says, his Ristigouche project became impossible. He said he fell victim to anti-oil and gas sentiment that was sweeping Quebec, prompted by shale gas projects that involved fracking. Even though he was proposing a simple exploratory well with no fracking, it was considered dangerous.
“It’s a bad time to be in drilling,” he said, claiming the risks were exaggerated.
“Look at Alberta,” he said. “They have 400,000 wells and they’re still producing wheat. Farms are not going without water.”
Savoie decided to sell its drilling rights to another company, but in August 2013 it filed a lawsuit alleging the municipality acted negligently and in bad faith when it introduced the bylaw.
The Superior Court trial in New Carlisle is scheduled to last until Sept. 18. Boulay said fundraising has covered about 85 per cent of expected lawyers’ costs, but an order to pay $1 million in damages would be devastating for a town that collects just $134,000 a year in property taxes.
In its written defence, the town acknowledges its officials were initially supportive of the Gastem project, but their opinion evolved as they learned more about what was at stake.
Boulay said the case is about more than protecting the town treasury.
“We are defending the right of a municipal council anywhere in Canada, not just in Quebec, to adopt a bylaw to control certain aspects of the environment without the fear of being sued by whichever entity or company for whom the bylaw is a pain,” he said.