The potential takeover of Canadian gas giant Encana by Royal Dutch Shell has the financial pages all atwitter. Not surprisingly, the press has identified some of the obstacles to the deal:, but has overlooked considerations that could be crucial to the future of communities throughout BC.
The press has focused on two issues with the deal:
- Shell’s reserve scandal where they have been forced to pay $150 million in fines and $9.2 million to settle class action suits stemming from its knowingly overstating reserves by over 20%.
- Competition issues related to the size of the combined company and their potential stranglehold over regional gas and oil supplies.
But what is not mentioned is that these are the two top companies on environmentalist and aboriginal target lists in the western US and Canada because of their aggressive exploration and drilling for coalbed methane.
Both companies have alienated First Nations, ranchers and municipal leaders on both sides of the border because of their failure to address the environmental, economic and social impacts of their coalbed methane operations.
Ranchers in Alberta, Wyoming, Colorado, and Montana are standing up and demanding better practices. First Nations and municipalities in BC are demanding that Shell and Encana slow down, stay out of key watersheds and engage much more deeply with the local people affected by their operations.
To date both companies have resisted these efforts. Shell has reluctantly agreed to shut down in the Sacred Headwaters but is gearing up again in the East Kootenays. Encana has been quiet of late but their past actions have been very aggressive.
A combined company would be formidably large, but easier to target. Remember the old adage “the bigger they are, they harder they fall.
We’ll keep you posted.
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