Colorado resident Amanda Harper thinks Canadians would be appalled if they knew that some of their retirement savings are funding fracking operations in the small, rural community she once called home.

“I thought Canadians had more dignity than that, more respect than that,” Harper said. “Then I thought maybe the Canadian people don’t know.”

Seven years ago Harper and her husband sank their retirement savings into a 1.3-acre farm near Longmont, Colorado. Their dream was to run a farm for the first time and raise their son against the stunning backdrop of the Rocky Mountains.

They had no idea at the time that their home in Weld County would be caught up in the state’s oil and gas boom. Colorado is one of the top ten oil and gas producers in the U.S.

“We put all the money we had into this beautiful little farm,” Harper told National Observer. “My passion was to farm there, to be there for all of our lives.”

Harper found out from a neighbour in 2014 that an oil and gas company, Encana Oil and Gas, had plans to construct 12 hydraulic fracturing or fracking wells 365 metres (1,200 feet) from her home. The following year she discovered the Canada Pension Plan Investment Board (CPPIB) was buying the wells. Harper said she could hardly believe it. Her family loves Canada.

“We are hockey people. That’s the other thing I feel some sort of camaraderie with [Canadians] because of hockey,” Harper said. “And then you are going to do that to our family, our life, our world here.”

Crestone Peak Resources, a company 95 per cent owned by the Canada Pension Plan Investment Board, bought the 12 wells and other oil and gas holdings of Encana Oil and Gas in Colorado for $900 million (USD) last summer. Encana Oil and Gas is the U.S. subsidiary of Calgary-based energy producer Encana. The Broe Group based in Denver owns the other five per cent of Crestone Peak Resources.

CPPIB, which operates at arm’s length from the federal government, manages $300.5 billion in net assets owned by the Canada Pension Plan, the country’s largest public pension fund.

Hydraulic fracturing has been a controversial method of tapping unconventional sources of natural gas and oil for more than a decade. To get at these difficult-to-reach hydrocarbons, industry drills underground wells 200 to 3,000 metres vertically and 1,000 metres or more horizontally to penetrate rock-like shale. Pressurized water mixed with hundreds of toxic substances is shot down the well to break apart the shale and push natural gas or oil to the surface.

Globally, a number of public concerns have been raised about fracking, ranging from potential groundwater contamination to methane releases.

“I think Canadians would be shocked that their money that they are forced to contribute to a pension plan is being used to invest in…new fossil fuel operations by the Canada Pension Plan," said John Bennett, senior policy advisor for Friends of the Earth Canada.

Bennett said the Board is turning a blind eye to climate change when it makes new investments in the fossil fuel sector. Friends of the Earth Canada launched an initiative last summer calling on the CPPIB to stop investing in fossil fuels and to bring its investment strategy in line with Canada’s climate commitments.

CPPIB increased its shares in Kinder Morgan

Crestone Peak Resources is not the only fossil fuel company where Canada Pension Plan money has been invested. The Board increased its shares in the Houston-based pipeline company Kinder Morgan last spring. As of March 31, CPPIB said it held $8 million worth of Kinder Morgan stocks.

Dave Conover, Vice-President of Corporate Communications and Public Affairs at Kinder Morgan, Inc. sent National Observer the following statement in an email:

“CPPIB increasing its investment is consistent with other value investors who responded favorably to our commitment to fund operations and expansion projects within existing cash flow.”

Bennett was skeptical about the timing of the CPPIB investment, coming several months before Prime Minister Justin Trudeau announced that the federal government had approved Kinder Morgan's Trans Mountain pipeline expansion project to the west coast on Tuesday.

The contentious Trans Mountain pipeline project from Alberta to the Vancouver area, which would ship 890,000 barrels of oil daily. Prime Minister Justin Trudeau announced federal government approval of the project Tuesday.

“The Canada Pension Plan buying hundreds of thousands of dollars of Kinder Morgan stocks suggests they are pretty confident that stock is going to rise,” Bennett told National Observer. “And the only way that stock is going to rise is if the Kinder Morgan pipeline is built."

Oil industry bail out?

This past year, the Board also backed Wolf Midstream (99 per cent CPPIB owned) in buying a 50-per-cent stake in an Alberta pipeline from Oklahoma City-based Devon Energy Corp. for $1.4 billion and Teine Energy, an energy producer the Board is invested in, in acquiring Saskatchewan oil holdings worth $975 million from Penn West Petroleum Ltd.

“I consider that bailing out the oil industry,” Bennett said. “In most industries, when things go bad, things go down. The Canada Pension Plan saw three big companies that needed cash and provided that cash.”

One month before Penn West sold its oil assets in Saskatchewan, the Calgary-based company announced it may default on its debts and Devon Energy spent the first half of this year selling off assets to reduce its debt. Encana shares hit a 13-year low in July 2015 and last February, Moody’s Investors Service rated Encana’s bonds as junk due to the company’s high debt load (Encana jumped back to investment-grade a month later). When Encana's plans to sell its Colorado oil and gas assets to the Board were announced in October 2015, Encana was attempting to pay off $3 billion in debt.

Encana did not respond to an email from National Observer asking for comment on Bennett's accusation that the sale was a 'bail out.'

Pension funds need to "stress test" fossil fuel investments, says Jeff Rubin

Jeff Rubin, former chief economist at CIBC World Markets, recently published a report with the Centre for International Governance Innovation on divesting from the fossil fuel industry in Canada. The report concluded that at a time of global commitments to deep cuts in greenhouse gas emissions, pension funds need to “stress test” their investments in fossil fuel companies to find out if those investments can remain economically viable.

“What is important to future pensioners is not just the contributions of current and future employees, but critically the rate of return that the Canada Pension Plan gets on its billions of assets,” Rubin said. “All I’m suggesting is investing in high-cost oil is not going to get that rate of return that future pensioners are dependent on.”

CPPIB, which declined National Observer’s request for an interview, is not alone in investing public pension fund money in the fossil fuel industry.

A number of provincial pension funds have made similar investments.

Quebec’s pension fund — Caisse de dépôt et placement du Québec — owns a 16.55 per cent stake in the Alabama gasoline pipeline that exploded on Oct. 31, killing one worker and injuring five others.

Quebec environmentalists say that these types of investments need to stop.

“This is not coherent with Quebec’s action plan on climate,” Christian Simard, executive director of Nature Québec, said of the Quebec fund’s fossil fuel investments. “The vast majority of Quebecers do not want us to invest in the petroleum and gas sector in Quebec.”

Simard said a survey last month provides some evidence that Quebecers do not want their pension money invested in fossil fuels. The survey found 66 per cent of Quebecers oppose oil and gas extraction in the province and 88 per cent do not want the provincial government to sell exploration licenses to oil and gas companies.

“There is a certain moral responsibility when you invest in a company to ensure the company is in accordance with the global objectives of fighting against climate change,” Simard told National Observer. “You have a responsibility equally with problems like leaks, and environmental impacts of your property or ownership in the enterprise.”

Alabama, Quebec, Caisse de dépôt et placement du Québec, Colonial Pipeline
A deadly explosion on a gasoline pipeline, owned in part by the Quebec pension fund, rocked Northern Alabama on Oct. 31, 2016. Photo by the Associated Press.

The Caisse de dépôt et placement du Québec did not respond to National Observer's request for comments on the pipeline explosion.

Simard said Nature Québec supports the Élan Global initiative, which demands public pension funds in Quebec like the Caisse de dépôt divst from fossil fuels. The David Suzuki Foundation is also spearheading a petition to force the Caisse de dépôt et placement du Québec to divest $8.4 billion in assets from the fossil fuel sector.

Norway and California have ordered their public pension funds to divest from coal companies. Sweden is taking steps to divest from oil and gas, specifically “companies featuring substantial exposure in high-cost projects, such as oil-extraction from oil sands.”

Although the Board has yet to disclose exactly how much Canada Pension Plan money is invested in the fossil fuel industry, Dan Madge, a spokesperson for the CPPIB, told the Toronto Star last year that the Board's investments closely resemble those of the Toronto Stock Exchange (TSX) Composite. Rubin said the energy sector makes up approximately 19 to 20 per cent of the TSX.

“We had to move from our dream home”­— Amanda Harper

For almost two years, Harper fought against the proposed fracking wells behind her home. When Colorado’s oil and gas regulator approved the 12 wells last summer she was faced with a tough choice: stay or move.

“I can’t live there. We had to move,” Harper said. “We can’t be there when the trucks come…It’s against every shred of my being to be there.

“We had to move from our dream home in our 50s.”

Harper and her family now live in neighbouring Boulder County, but they still own their house in Weld County. Harper is uncertain if they will ever move back. She has not given up though. Harper told National Observer she is strongly considering civil disobedience to try to stop or delay the wells.

“Broe Corp., Crestone Peak, and the CPPIB…are willing to destroy our way of life and our investment, for the benefit of their investments and the elderly in Canada,” Harper said. “Are you sure you want your pension plan to invest in places that are just going to ruin Colorado?”

Keep reading

I suspect it's a sneaky way to increase the corporate welfare to these companies without the Public knowing the true amount. Including CPP and every other public department investing - Unemployment, etc, what is the grand total "invested" in this dying industry? Also how much is being "loaned"? What part in the approval process does the knowledge that unless XYZ is built, taxpayers won't get a dime and GoC will have yet another scandal? The industry is going to crash in the not too distant future (I believe 10 years is generous) and then we will have not just a stock market and investment crisis, but the collapse of all taxpayer-funded programs? Is that so the taxpayer can fund an Industry bailout like the one Wall Street got in 2009?

Aside from the monumental stupidity they should be investing in Canadian companies hiring Canadians and improving our country - not destroying others. When they discredit all evidence about the terrible effects of fracturing across this country, what it does across the border is of no interest. Canadian energy and mining companies are the world leaders in environmental and human rights abuses around the world and they proudly do nothing about it.

It is of little value to Ms. Harper and all others affected by these criminals, but as a Canadian, I apologize for what has been done. I am becoming increasingly embarrassed and ashamed by what is being done by, and in the name of Canada around the world. The fracking bans in parts of the US have been a beacon of hope here, and we need to join together to get fracking banned entirely.

Some fraccing bans, such as NY, have endured, others have not and I expect most will be successfully legally challenged by industry, particularly if the TPP is ratified, which legislates that any new environmental policy that constrains the profiteering of corporations can be litigated behind closed doors.

The community of Denton, the birthplace of fracking rallied to get a ban, only to have the state legislate against them:

Considering that nearly 100% of all new oil and gas wells in Canada and the US must be fracced to produce, a nation wide ban, would mean shuttering most of the industry, which, to be practical, is inconceivable.

Systematically eliminating the demand for fracced oil and gas, with conservation and efficiencies, renewable energy, bio or alternative fuels, (non food sourced) net zero buildings and EV's, seems to be the more plausible route to protecting public health and safety and environmental sustainability from the impacts of fracking. When our government is already threatening meeting pipeline protestors with militia, they have no intention of letting communities prohibit the standard process they have left to extract the fossil fuels that will fill those lines.

Mrs. Harper,

My condolences on having to abandon your dream home because of fracking. It was a wise decision, though certainly a wrenching one, the health impacts of living that close to the noise, traffic, light and horrendous pollution from the emissions of fracked wells is an onslaught of irrevocable proportions. Nearly a thousand peer reviewed studies to date demonstrate that hydraulic fracturing has grave impacts on public and environmental wellness, but no-one seems to care. Most Canadians are hardly concerned about landowners whose lives have been destroyed by unconventionals in their own communities and nation, much less those in the United States. Of course, one must consider the billions of dollars spent by industry, synergy, lobby and counterfeit eNG organizations to propagandize the safety of fracking and delude the population on the impacts of fracking. Nonetheless, I'm afraid, there is little support for your plight here either, our government has every intention of permitting fracking every proved and probable reserve known to industry. Until such time that industry have exploited all First Nation lands and rural areas in Canada, then need to greedily descend upon the areas of urbanite existence to service their debt and enrich their shareholders, will the masses come to the realization of how repulsive and damaging fracking is. Not until industry is dumping trillions of litres of toxic emissions upon their families, will they empathize and insist on change, unfortunately, by then, it is far too late.

Mr. Leahy and National Observer, please make more of an effort to be scientifically factual on the process of fracking. This statement is inaccurate:

"Pressurized water mixed with hundreds of toxic substances is shot down the well to break apart the shale and push natural gas or oil to the surface."

All six well bores by our home, hundreds in our community and hundreds of thousands of well bores across North America are fracced entirely with hydrocarbons, in "frac oil" completions, with gas fracs (nitrogen or CO2) fracs or with liquid or gelled propane, where no water is used in the process. Hydrocarbon based fracs are commonly used in formations that encounter waxing or hydrate formation. Here is a link to the only well site by our home to fall under the Frac Focus registry, which validates this claim. All other well sites around our home have "tour reports" or daily drilling logs that we paid to access from the AER, that show each one was drilled with diesel invert based drilling muds in the intermediate and lateral well bore sections and completed (fracked) with hydrocarbons.

Prior to hydraulic fracturing, well casings, liners or the open hole formation is perforated with perf guns to initiate fractures, then generally the perfs are logged with gamma ray neutron logs so that propagations can be tracked from the surface. Then fracture fluids are pumped under extremely high pressure into the well bore, in numerous stages, aided by seated balls of varying sizes, or other varying systems of staging frac propagations. After the fracturing is complete, then the viscosity of the fluids must be "broken" with additional chemicals, to facilitate the return of fracture fluids to the well head. Upon return of fracture fluids, the well is "tested" to clean out the formation from residual fracture fluids and stimulate the flow of formation products. This is where flaring and incineration of waste gases take place and the collection of used fracture fluids occurs, which are usually sent for disposal to injection wells.

As well, products are not "pushed" to the surface. Normally, the formation pressures of fracced well bores are so poor, pump jacks, artificial lifts and compressor stations must be installed during production to pull the products to surface.

When it comes to "bailing out" industry, this is standard practice. The NDP in Alberta have recently implemented billions in incentives for fracced wells. AIMCO bailed out Calfrac, with public money. All oil and gas producing provinces have programs to subsidize the cost of fraccing. If unconventional resource extraction was actually required to stand on it's own two feet, the industry would not be sustainable.

Thank you for this important information. We are in a crisis and we must move quickly and we are moving quickly.

I am really surprised that CPPU would buy stocks in Kinder Morgan, as well as the Saskatchewan company and as well as owning 12 fracking- wells in Colorado. The institution should be divesting itself away from fossil fuel stocks. Especially in fracking- it boggles one's mind that in this day and age they would invest in the fossil fuel industry which is on its way out.