In the National Hockey League, the term “dropping the gloves” indicates that fisticuffs are imminent. And since there was a day when the NHL was populated almost exclusively by Canadians, it seems appropriate to observe that Chevron (NYS: CVX) and its Ecuadorian plaintiffs have dropped the gloves in Canada. Their two-decades-long bout of legal pugilism has now moved north of the border.
During the past wild and woolly week, which ended with the market’s Friday plummet, lawyers for residents of an Amazonian rain forest filed a lawsuit against the big oil company in Canada. Their intention is to help themselves to Chevron’s assets in Canada to satisfy an $18.2 billion judgment that was slapped on the California company — which ranks second in size only to ExxonMobil (NYS: XOM) among U.S.-based fossil fuels producers.
Heading for the assets
Chevron has no assets in Ecuador. In Canada, however, it’s an active operator on land and off the shore of the country’s eastern provinces. It also refines product and cooperates with a host of other companies in producing crude oil from Alberta’s tar sands. Approximately 3% of its worldwide production emanates from the land of our northerly neighbor. As a result, the plaintiffs and their attorneys could go a long way toward satisfying their questionable judgment, were they able to gain acquiescence from Canadian courts.
Perhaps the only thing that’s completely clear about this bizarre case is that Chevron isn’t guilty in the slightest of any sort of pollution in the country that constitutes OPEC’s runt. What it did do was to acquire Texaco Petroleum in 2001. Texaco had worked in Ecuador until 1992, nine years before it became even a twinkle in Chevron’s eye. Before it ceased its operations and departed the country, Texaco received certification from Ecuadorian government agencies that it had completed all necessary remediation for its share of environmental impacts from its operations in the country.