Premier Doug Moores

Not like his name hasn’t been tossed around before as a potential Conservative Party leader.

The guy’s got bags of experience and he has a strong business and legal background.  Here’s the blurb that went with a 2001 provincial honour he received:

Doug Moores has served as a volunteer for 30 years, contributing locally, provincially, nationally and internationally. He has held leadership roles in numerous sports, arts and culture, health care, and business and development associations. He has made significant contributions to the Conception Bay North Development Association, the Harbour Grace Board of Trade and Baccalieu Chamber of Commerce, among others.

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Why he’s heading south…

People are wondering why Danny Williams is heading south so quickly.

Well take a gander at finance minister Tom Marshall’s budget update and you can get a good idea of one possible cause.

Last spring’s budget forecast a cash deficit of slightly under $1.0 billion.  If you look at the forecast increase in net debt of close to $500 million, you can ballpark the cash shortfall to be at least that much. That’s about where things came in last year.

Marshall is claiming a surplus for his last budget, but people have to remember he isn’t talking about cash flow.  Under cash accounting, revenue and expenses are recorded when they are received or paid.  You can wind up showing an accrual surplus but have to head out and borrow money to cover the cash payments needed in a given period of time.

For those who keep track of these things, by the way, the provincial government now reports its finances on both a cash and an accrual basis. In 2007 they switched back to showing the annual estimates on a cash basis, but they left the budget speech projections under the accrual method of accounting.

Media reports are likely to focus on the rosier number coupled with Marshall’s claim that last year will look better than originally forecast.  But conventional media won’t wade into the deeper picture. For one thing, it’s much harder to understand. They are likely to stick with the same sort of bumpf they’ve been feeding people for the past week or so about a deal on the Lower Churchill.

There are some modest increases in revenue:

• provincial income tax is $31 million above estimate;
• corporate income tax is about $165 million above estimate;
• oil royalties are $65 million over estimate (they were a wee bit optimistic on price);

Spending is expected to increase by about $76.4 million although the news release pegs it closer to $100 million.

As for that diversified economy thing Marshall mentions in the news release, let’s just quote a famous politician and say that nothing could be further from the truth.

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Fernando’s Farewell Tour

As Danny Williams gets ready to hand the reigns of power to his hand-picked successor, it is interesting to see tributes that flow in for all the things Danny Williams did for Newfoundland and Labrador:  prosperity, offshore oil money, Hebron, Lower Churchill, Voisey’s Bay and of course, his personal favourite:  pride.

News that Williams will make a final appearance on This Hour Has 22 Minutes  - long beyond its sell before date – prompted your humble e-scribbler to go back to another post that seems to encapsulate much of what Danny Williams has been about.

“Government by Fernando” contains all the themes people have heard in the past few days about pride and seals plus a few other ideas that might resonate with you.

Then notice the date:  September 2006. 

More than four years ago.

Read it, in hindsight, and be amazed at how long he’s been pushing the same lines.

And how successful he’s been at it.

Oh yes:  and the House of Assembly is delayed this week to facilitate the publicity tour.

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Premier Fairity

He thought about it in 2000 but never launched a campaign after Danny decided to go for it.

Kevin O’Brien’s clearly been searching for a human-looking hair colour lately and maybe he’s been hunting in order to take a run for the Premier’s Office.

He might be a long-shot, but the guy who has trouble with geography at least knows what he’s fighting for:  fairity.

Kevin O’Brien:  a potential Conservative leadership candidate.

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Newfoundland and Labrador Wikileaks References Decoded

labradore deciphers the references to Danny Williams in the coded diplomatic cables that someone leaked already.

Pretty boring, routine stuff.

Of course, that doesn’t mean there might not be other, much more interesting diplomatic cables that mention the Old Man:

• Sino-Energy – a secret deal to share highly confidential information on the Lower Churchill and the north-eastern North American energy system, to a Chinese company with a dubious international reputation;
• Captain Williams of the Ozone Patrol  - Danny goes ballistic over a missile that follows a routine trajectory over the north Atlantic.
• Big Oil’s L’il Buddy – State would have noticed when Danny started batting oil companies around;  they would have really noticed when he decided to let them gain some serious control over the provincial government. 
• And he hates being called Hugo  -  Danny Williams decides to snatch up a bunch of hydroelectric assets under the cover of something else.  Foggy Bottom took notice, big-time.
• Heart Surgery – Yes, folks, lots of people took interest in that episode.

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Debunking imaginary conspiracies update:  CBC’s David Cochrane joins in…eventually.

Energy analyst doubts Muskrat Falls economics

CBC quotes Toby Couture, an energy specialist with with London-based E3 Analytics:

"The investment case for selling that power to New England is actually not looking very good, partly because they have more than enough natural gas — cheap natural gas — to meet their own electricity needs for the next decade, at least," Couture said in an interview.

Nalcor boss Ed Martin disagrees but doesn’t say how he plans to overcome the economics of Danny Williams very expensive project. 

You can get an idea of the expense of the project from earlier Bond Papers posts:

• Muskrat Falls = expensive power, and
• Fear and loathing on the energy campaign trail

As for what sort of windfall Martin may be counting on, consider that taxpayers in Newfoundland and Labrador will be shouldering the cost of this enormously expensive deal and, in all likelihood passing on the savings to energy consumers elsewhere. That’s an idea floated around these parts before Danny Williams announced his retirement.

And in case you thing Couture is wrong, some very influential people agree with him.

Maybe this all doesn’t matter because the Muskrat Falls was a vehicle for Williams’ retirement and not a way to build a generating plant.

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An Ibbitson Inanity Hat Trick

“Mr. Williams can take credit for negotiating the deals that led to Voisey’s Bay…”

That’s a pretty tough trick since the deals that led to the development were signed before Danny Williams took office in 2003 and he had nothing to do with them.

John must have fact-checked with Rex Murphy who recently had Williams in office in the late 1990s.

And, as with the rest of Ibbitson’s safari – population and math -  the remainder of this article is no more accurate.

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Advance polls set a record

Think of it as a bit of a record.

Advance polls in Conception Bay East-Bell Island attracted 551 voters over the weekend.  Turns out that this a record for by-elections since 1999.

There have been a few by-elections where the advance poll attracted more than 400 voters, but for the most part, there hasn’t been a heavy advance turn-out the rest of the 21 by-elections since 1999.

Even in the Danny by-election only 333 voters cast ballots at the advance poll.

And in usually safe Conservative seats – like say Ferryland – or where the Connies are expected to win handily, the turn-out in the advance polls has usually been low.  Topsail earlier this year had only 169 advance poll votes.  Ferryland was 135 and Cape St. Francis was 112.

So what does it mean?

Well, it could mean that change gonna come. There’s an old political wives tale that says a heavy turn-out usually means the incumbent or the incumbent party are about to take a heavy knock or the government party is likely to lose. 

But when you look at the the rests in Port de Grave, there was a heavy turn out in the advance and the incumbent party – which was also the government party – won the seat.  In Exploits (2005), the government party won.

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A satirical look at the Old Man

In a placed where open confrontation is suppressed, humour sometimes takes a cutting edge.

Take a look at this post over at thescope.ca and give a listen to a mock traditional song about Danny Williams.

Sounds wonderful, right?

Then look at the lyrics:

Sure he’s as good as God,
He bought back all the cod,
Now the money’s flowin’ free,
There’s a dollar in it all for you and me.

…

I bought three new Skidoos but winter is dry and I got nowhere to go,
But I’m not worried cuz I knows next year Danny’s gonna bring back the snow.

Now he’ll take care a ya,
He invented Hibernia,
He lines our pockets with the nickel and oil,
Sure he even knows the fella from Republic of Doyle.

Then take a look at any piece in the conventional media the past couple of days  - local or mainland – and the realise that the people who wrote the equivalent of “He invented Hibernia” and “he brought back all the cod” weren’t making a joke.

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More Ibbitson Idiocy

From the same column in which the safari journalist from Toronto proved he could not count, labradore finds another factual claim that is – to say the least of it – wrong.

This time it is the myth that half the population of the province lives in or near St. John’s.

Anyone care to guess where John got the crap in the column?

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Talking to Canadians

For the past couple of decades, Rex Murphy has made a comfortable living by talking to mainlanders. 

What appears to catch their ear, let us not forget, is his ability to speak in subordinate clauses.  The crowd who watch his commentaries seem impressed by his use of words and sentences that, because they are lyrical, appear to be intelligent.

That is not to say they are ignorant but that Murphy is not only smart  - he uses big words, after all - but his subordinate clauses sound smart. 

At times, though, one must wonder if, after all this time, Rex continues to fool them into believing that what he says is true.

From time to time, Rex likes to talk about the place he comes from.  Like the land from which any expatriate comes from, Rex’s Newfoundland is not so much a real place with which he is intimately familiar as it is a memory distorted by distance and emotion.  

Take for example, the way he speaks about Williams’ patriotism.  It is fashionable among a certain crowd to claim for Newfoundland and Labrador some sort of Brigadoonish fairy quality that suspends the laws of nature, time and man. None but Newfoundlanders, supposedly, can understand pride of place and origin. 

This is, to put it crudely,  nothing more than crap. It is exactly what Rex claims it isn’t.  It is entirely a conceit, a fabrication, a convenient assumption that allows an otherwise ridiculous claim to appear plausible.

No successful premier could be unaware — and it is the key to those moments Thursday morning when with a trace of mist in his eye he spoke of Newfoundland’s future and the merits of her peoples. It is common to us all — this strange, sometimes extorted affection we Newfoundlanders have for our place. And therefore it was not odd that Mr. Williams could address the whole of the community, speak as he spoke, say even that “I love you all”; whereas it would be odd if, not perfectly impossible for, say, Dalton McGuinty were to attempt a like hail. The elements are not there, either in him or in Ontario. 

Those words, hastily scrawled in Williams’ own hand across the bottom of the text from which he spoke, are as bizarre in St. John’s as they would be anywhere else in the country coming from a politician.

Danny Williams did nothing if he did not bring to local politics an intensely personal quality it seldom has had. it more typically manifest in what Murphy dismisses as a periodic excess.  In truth, Williams never knew a cheap personal smear he would not make.  He seldom spoke on any disagreement except in a disagreeable way. And just as surely as Williams was perpetually bitter toward anyone, he was also quick to claim a deep personal grievance if anyone expressed an opinion contrary to his own.

In that context, Williams profession of the most intense personal affection for a raft of people he did not know is doubly odd. Coupled with the understanding that Williams spent so much of his time massaging public opinion toward him and one starts to appreciate that his “I love you all” was as impersonal as the sign-off for a television show. 

Make no mistake:  there is an ease and a friendliness in Newfoundland and Labrador that allows one to pass a complete stranger on the street and exchange pleasantries.  But what Williams’ scribbled words conveyed was more akin to what one might see on an American reality television show.

Murphy’s political obit for Danny Williams also contains some fairly obvious foolishness beyond those things.  he writes, for example, that some “boost of assertive spirit, perhaps even a touch of overcompensation, did not go astray in Newfoundland during the latter part of the ’90s.” 

Williams did not enter politics until couple of years later – he got the party leader’s job in April 2001 -  as things were clearly on the upswing after a deep recession and the cod moratorium.  Williams likes to claim the place was on the skids before he arrived but that, like many of the tales of Williams’ exploits are sheer fabrication. The gobs of cash he spent came entirely from energy deals signed before he took office in October 2003.

But when Rex writes stuff like this that you have to wonder:

Brian Peckford talked about it. Clyde Wells talked about it. Brian Tobin certainly talked about it. But it was Mr. Williams, belligerent and unwavering and finally triumphant Williams, who got it.

The “it” here is a deal to develop the Lower Churchill.  Now mainlanders are a sometimes gullible lot but even they should be fooled by last week’s announcement.  What Danny Williams announced was a vehicle for his resignation, not a way to build a hydro-electric power plant. Even the most lazy reading of a newspaper or a website about the event would show that up.

A few years ago, another Newfoundlander made a decent living by talking with Americans and exposing their abysmal knowledge of the world outside their borders.  Unlike Rex’s version of the same idea, Rick Mercer knew that the name of the prime minister he used or the events he described to the gullible Yanks were made up.

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Introducing Premier Dunderdale: delusions

Kathy Dunderdale likes to claim that others don’t understand what is going on.  Then she proceeds to demonstrate she doesn’t quite get it either.

It’s called the delusion of competence.

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Traffic Check-up November 22 - 26

1. Williams on his political future
2. Introducing Premier Kathy Dunderdale
3. Muskrat Falls = expensive power
4. The political uses of talk radio
5. Take from me this cup…
6. No US market for Lower Churchill power: NL deputy premier
7. Doubling electricity rates for the Lower Churchill:  then and now
8. Lower Churchill opinion:  the End
9. Blind, deaf, mute and no sense of smell
10. Introducing Premier Dunderdale: patronage and the Public Tender Act

An exceptional week led to an exceptional switch around in the traffic patterns.  Interest in the Lower Churchill remains very high, although Danny Williams’ resignation created some interest in both your humble e-scribbler’s comments on this in the weeks leading up to his departure as well as interest in the current deputy premier.

Suitably, this week also marked the publication of an article that documented so much of what made Danny Williams’ persistent mythology.  At the same time, readers also got to follow a real-time example of exactly the sort of manipulation the academics are talking about and that Bond Papers introduced you to in 2006.

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Ibbitson’s ignorance

According to the Globe’s John Ibbitson:

Right now, though, Newfoundland’s 13th premier is still coping with the emotional fallout of Thursday’s announcement that he’s leaving his job.

13?

Smallwood, Moores, Peckford, Rideout, Wells, Tobin, Tulk, Grimes, and Williams.

Count ‘em.

Hint:  it isn’t 13.

The rest of the column is just as accurate.

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Nutbar Factor 6

A dragon calls it like he sees it.

Listen to the whole clip. 

You won’t be disappointed. 

Kevin O’Leary sees the legacy of Danny Williams’ tenure as Premier in terms of the damage Williams’ ranting and posturing did to the provincial economy.

Let the comments section now fill up with sock puppets and trolls.

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Introducing Premier Dunderdale: patronage and the Public Tender Act

The Williams administration had a rough time in 2006. 

On the heels of a massive spending scandal in the House of Assembly, word broke that one of Danny Williams’ patronage appointees had run afoul of the province’s Public Tender Act.

As the minister responsible for the agency where the problem took place, it was up to Kathy Dunderdale to explain it to the legislature and the public.  Kathy had some difficulty getting the full story out the first time.  She eventually told it a few days later but by that time, it was fairly obvious Dunderdale had misled the House.

In order to avoid making a very bad situation even worse, Danny Williams ordered his House leader to shut the House of Assembly earlier than planned.

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Offshore board statement on H2S levels on White Rose FPSO

From the Canada-Newfoundland and Labrador Offshore Petroleum Board:

“The Canada-Newfoundland and Labrador Offshore Petroleum Board  (C-NLOPB) was notified on Friday, November 19th by officials at Husky Energy that the company was managing elevated levels of H2S (sour gas) in two of the storage tanks on board the Sea Rose FPSO. H2S levels were elevated in the tanks due to an inoperable circulating pump. As a precautionary measure, all non operating activities were shutdown and personnel returned to accommodations. Access to operating areas was restricted. Part of the process to manage the H2S levels involves venting.

Thirty-three workers whose duties require them to work on the deck, have been transported off the Sea Rose due to a lack of work activity. Fifty-three personnel remain on board.

The C-NLOPB is satisfied that Husky has taken prudent proactive precautions to manage the H2S levels. The C-NLOPB is continuing to monitor the situation and will be doing further follow-up with Husky Energy.”

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Introducing Premier Kathy Dunderdale

For the benefit of those unfamiliar with the political career of the woman about to become Newfoundland Labrador first woman first minister, here is the first in a series of flashbacks to some of her more embarrassing – but unfortunately typical – moments.

Due diligence for dummies:    In one of her first political problems, then provincial NDP leader Jack Harris ridiculed Dunderdale’s department for failing to discover a company getting government hand-outs had a few legal and labour relations issues. Dunderdale blubbered through an excuse but the truth is the information was readily available online for anyone with basic Internet skills.

Harris referred to google as “due diligence for dummies”.

D’oh!

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Take from me this cup…

As the Globe and Mail editorial crowd display once again their profound and abiding ignorance of anything outside the small confines of their office and their skulls, let us notice on this American Thanksgiving that Danny Williams’ political successor can thank him for exactly nothing.

Williams announced last week not just his political obituary but the obituary of his successor.

His successor has only two choices.

The stupid choice is to carry forward with a deal that would, for example,  allow Hydro-Quebec to scarf up 49% of the Lower Churchill and at the same time control all the export of power through Nova Scotia in a way that it cannot in Quebec.  What’s more, the deal is a financial mess that promises to beggar the provincial coffers and the pocketbooks of the average Newfoundlander and Labradorian.  Self-imposed desperation drove BRINCO to a disaster in 1969.  So too has self-imposed desperation driven Danny Williams’ term sheet.

In the sensible choice, the deal dies.  The only problem is that in killing it, one must go back to do the sort of deal that makes financial sense:  wheeling the power through Quebec. On his way out, though, Williams has not only scorched the Earth across that border but sewn the ground with salt and infected it with a pestilence such that anyone going near it would catch the political equivalent of Ebola and AIDS in one.

People thought Brian Tobin shagged Roger Grimes on Voisey’s Bay and the Lower Churchill.  At least Tobin left Grimes with a chance.  Grimes wound up negotiating two deals, both of which will stand up to scrutiny for the tremendous benefits they did bring  - in one case – and would have brought – in the other case -  the latter being scuttled own by political conniving and perfidy.

No sir.

There are poisoned chalices and then there is the cup Danny Williams passed today.

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Crowd-sourcing the news

From Mashable:

On the social web, investigative journalists are tapping citizens to take part in the process by scouring documents and doing shoe-leather reporting in the community. This is advantageous because readers often know more than journalists do about a given subject, said Jay Rosen, a journalism professor at New York University.

The rest of this article is well worth the few minutes it will take to read it.  If you want to spot a media trend with huge implications, this is it.

h/t @prsarahevans

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Fear and loathing on the energy campaign trail

Natural resources minister Kathy Dunderdale is one busy minister these days.  She’s turned up in several interviews since the Muskrat Falls announcement to respond to criticise of the announcement coming from Roger Grimes.

As in her interview with CBC Radio’s West Coast Morning Show, Dunderdale dismissed Grimes’ comments.  She claimed he didn’t know what he was talking about when he talked about electricity prices going up dramatically if the provincial government’s proposal became a reality. The tone of her voice suggests a certain loathing for the former premier. 

That’s typical of the Danny Williams crowd, by the way.  They have a special and personal hatred for Grimes. So intense is the hatred that the Danny fans worked hard to vote in a recent CBC online poll and picked the one option that personally dismissed Roger Grimes as being irrelevant to the discussion just because he is Roger Grimes.

Funny thing, though, is that in every interview Kathy Dunderdale winds up explaining that electricity prices in the province would just about double. In her West Coast Morning Show interview she actually explained things such that you’d believe prices would go up even more than double. 

Dunderdale claimed that electricity prices would increase an average of five percent each year from now until 2017. That’s the year Nalcor would supposedly bring Muskrat Falls on line. So electricity prices would be about 35% higher than they are now, according to Dunderdale. 

At that point, as Dunderdale notes, Nalcor could start charging for the cost of power coming from Muskrat Falls. She’s already said that Muskrat Falls power would cost between 14.3 and 16.5 cents per kilowatt hour to produce. Add in a rate of return for both Nalcor and the electricity retailer and you are well on your way to electricity prices in the provinces being more than double what they are today.

Double the current price.

Guaranteed.

The provincial government thinks that they can justify their proposal because, as Dunderdale says, they have a projection that oil will be $120 by 2017 and could be as much as $200 a barrel within a decade.  So much power on the island currently comes from oil generation that electricity prices will go up because oil will be this and that price along the way.  After 2017, Dunderdale says, the increases from Muskrat Falls will be less than what they would be without it, all because of the price of oil.

Well, the truth is that electricity prices could be all those things, but then again, the world of the future could be completely different. That’s because those oil prices aren’t guaranteed. The number the provincial government has from its consultant is a guess.  it may be an educated guess but it is still a guess, all the same.

The government’s guess is potentially as reliable as the forecasts in the middle of 2008 that oil would hit $200 a barrel by the end of that year and continue upward thereafter.

We all know what actually happened.

For Dunderdale though – and really for the current provincial government – these numbers are real.  Listen to Dunderdale in that interview as she tells the host what oil prices will be next year.  She speaks as if it is already 2011 and the prices are known.  There’s something vaguely creepy about the way Dunderdale acts as if she and her colleagues can read the future.

It’s right up there with her other unsettling claim.  By 2019, claimed Dunderdale, “we will have an energy deficit so we will have to ration energy or we will not be able to provide to ratepayers electricity when they need it.”

Energy rationing. 

Maybe blackouts in some areas during the inter months – the peak demand times in this province – because the system can’t handle the demand.

Pretty scary stuff.

That’s the essence of the provincial government’s position:  support this or else the place will be a wreck.  Maybe super high electricity prices even worse than the super duper prices you are guaranteed to get under our plan for this super duper energy mega project.

Support this plan to jack up the public debt in the province with the horrendously high public debt already because, if not, you know,  we’ll have to cut off your granny’s heat for a few hours in the winter time.

Fear.

It’s been a powerful political tool for the current administration, so it’s no surprise they are using it.  They’ve thrived on mongering fear of outsiders. During the row last year over the government’s plan to sling power lines through a world heritage site, Danny Williams talked about the costs and possible cuts to health care.

Within the past couple of weeks he’s tossed out the view that the province might be descending into anarchy.  Why?  Because someone had a strong opinion that didn’t match is or something.

Only a week after the announcement and the provincial government is already resorting to fear as the major way of selling people on a giant electricity price increase and a gigantic hike in the public debt.

No surprise that fear and loathing are core elements of the Williams administration’s political arsenal.  it’s just a bit surprising that they’ve turned up [this quickly] as the core of their efforts to convince people to get behind what Danny Williams has described as his crowning political achievement.

Sorta takes the shine off the tiara.

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* edited to add words for clarification and to correct typo

The political uses of talk radio

From a story on the front page of the Wednesday Telegram:

Open-line has little impact on the formation of big-picture public policy, but does have a strong effect on government behaviour, with political actors paying "considerable attention" to what is said on VOCM. 

That has translated into partisan efforts to control the frequency, as it were - intense monitoring of open-line programs for rapid reaction to issues that may arise; promoting party positions through stacking the lines to suggest grassroots support; and using the airwaves to avoid answering difficult questions from other media outlets.

Sadly, it isn’t available online unless you are a Telly subscriber.

The story discusses an article by Memorial University political scientists Alex Marland and Matthew Kerby who conducted a detailed study of politicians and talk radio in the province.  As part of the research, Marland and Kerby compiled statistical analysis of callers, frequency of calls and dates as well as a series of in-depth interviews with politicians, political staff and journalists.

Regular readers of this corner of the universe will recognise the discussion, for example, in this section of the Telegram story about planted callers,

Marland and Kerby found that the limited pool of callers to open line presents "a very serious credibility gap," with line-stacking so prevalent it is believed that the lines are monopolized by a pool of just 30 to 100 callers. 

"The prevalence of political calls questions whether the openness and spirit of talk radio is supplanted by parties' efforts to control the shows' content," the MUN researchers note in their paper.

There’s also a section on poll goosing, that is timing announcements and open line activity to coincide with CRA polling periods.

And the bizarro attention paid to VOCM Question of the Day? Here’s a tiny bit of the Marland and Kerby take on things:

One respondent provided us with tabular data of efforts to influence the outcome, which involved hundreds of automated repeat votes that were critical of Williams, and which almost instantly provoked an apparently automated response supporting the premier. This occurred only during the workday and not in the evening (one minister told us that party staff‘go crazy’ clicking during the day).[Note:  Marland and Kerby here are referring to political staff working in government offices]

The one thing they really don’t make clear is that the level of this sort of activity since October 2003 dwarfs anything that went before.  Some people may like to think otherwise, just as some people like to deny this sort of stuff goes on at all. The evidence speaks loudly for itself, however.

“The audience is listening: talk radio and public policy in Newfoundland and Labrador" is available in the November 2010 issue of Media, Culture and Society, a peer-reviewed journal of research on communications and society. Individual articles are available for purchase online or through your local library. 

The Memorial University Library subscribes to MCS for those who can access it.

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Doubling electricity rates for the Lower Churchill: then and now

"If we had to pay for it ourselves it would be safe to say the rates in Newfoundland would double," Marshall said.

Turns out that Fortis headman Stan Marshall might have been in tune with a higher celestial power even if he was 12 years ahead of the rest of the world.

Stan Marshall gave that comment more than a decade ago to the Telegram business editor Chris Flanagan. The story – titled “Deal would double rates: Fortis boss skeptical of Quebec to Newfoundland line benefits” – appeared on the front page of the Saturday, February 21, 1998 edition of the province’s largest circulation daily.

Marshall was talking about a then-rumoured proposal to build an 1,100 kilometre, $2.0 billion line from the Lower Churchill to Soldier’s Pond. He told the Telegram that in his view the line would wind up being severely underutilized in the short-term and would cause financial headaches for the provincial government for maintenance and replacement.

At the time, however, the provincial government and Newfoundland and Labrador Hydro weren’t proposing that provincial taxpayers foot the bill, as with the proposal announced last week by Premier Danny Williams.  In 1998 and in some subsequent discussions the whole line would have been cost-shared with the federal government. 

What’s more, while power rates may well have doubled under the 1998 proposal, the provincial portion of the entire project would have been supported by the sale of power from the much larger and more lucrative Gull Island portion of the Lower Churchill to markets in Quebec and potentially elsewhere.

In the Williams version, Newfoundland and Labrador taxpayers would pay for the Muskrat Falls dam and the line to St. John’s.  Ratepayers in Newfoundland and Labrador would cover the cost through higher electricity rates and, in all likelihood, by carrying an additional $4.5 billion in public debt on top of the province’s existing, enormous public debt.

The only power export guaranteed under the new proposal would be 170 megawatts handed to Nova Scotia-based Emera in exchange for its building the line to get the power to Nova Scotia.  Under the proposed agreement, Emera could buy up any other export power at the Cape Breton landfall. What’s more, while Nalcor might get some right to wheel power through Erma’s Canadian transmission holdings, Emera could also step in to replace Nalcor in an export deal provided Emera compensated Nalcor.

In a media interview this week, provincial energy minister Kathy Dunderdale said power from the proposed project would cost at least 14.3 cents a kilowatt hour to produce;  she also gave a figure of $165 per megawatt hour which translates to 16.5 cents a kilowatt hour. 

But that’s the wholesale cost for the Williams proposal.  The rate for consumers would likely be higher in order to allow Nalcor and its partner Emera an appropriate rate of return.  The consumer rate would also have to include a return for electricity retailer Newfoundland Power, a Fortis company.  Taken altogether, rates on the island for residential users would likely be double the current rate of about 9.5 cents a kilowatt hour.

According to Dunderdale, the provincial government is justifying its projected rate hike based on a single projection from one consulting firm that the price of oil in the later part of this decade will be around $120 a barrel.  According to Dunderdale,  without the line from Labrador, the only alternative will be continued use of expensive diesel fuel for the large diesel plant at Holyrood as well as some additional wind and small hydro generation.

By comparison, [according to the provincial government] the Labrador dam and the new power line would be cheaper for consumers than the alternative.  To date, the provincial government hasn’t released any details to support their claims about the cost of alternative power generation to meet anticipated demand.  The only documents they’ve released are a graph and a chart without any of the context used to come up with the figures.

The provincial government also claims that the Labrador dam and new line would “displace” Holyrood’s diesel generation.  That claim isn’t backed by Nalcor’s own plans.

In 1998, Stan Marshall also had concerns about the cost of maintenance on the new line:

"If there's a real ice storm it will have to be rebuilt and I hope somebody's going to pay for that," Marshall said. 

Marshall said the line simply does not make economic sense. 

"If someone offered you the transmission line or $2 billion, you'd  take the $2 billion," he said, but added there are political and long- term factors others might want to consider. 

"I don't know what the political agenda is here and what the
government is trying to achieve," he said.

Plus ca change?

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*updated – words added to clarify attribution

Related:

• NL and US taxpayers may help subsidize costly big-hydro project (09 November 2010)

Coming soon:  demand projections and crude price forecasts

Ontario to double electricity rates

Ontario’s new energy plan will see the province’s electricity rates double, but in 20 years, not seven.

[Globe and Mail] This is the government’s second attempt to chart a long-term plan. While the latest version is broadly similar to the document released in 2007, it differs in one key respect: costs for building new power systems are estimated to be 45 per cent higher.

As a result, residential electricity prices will climb to $228 a month by 2030 for the average consumer who uses 800 kilowatt hours a month. This compares with $114 today.

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Williams on his political future

CBC’s Debbie Cooper put the question to Premier Danny Williams last Thursday at the end of a sit-down interview on his Lower Churchill announcement.

“Is this your swan song?” she asked.

Williams has usually tied his political future to a Lower Churchill announcement. Your humble e-scribbler put it this way back in 2006 when Williams talked about not seeking a third term in 2011.  At that point, he’d already established a timeline for the Lower Churchill that put a decision to go-ahead with it in 2009 or 2010:

Williams announced his resignation - actually that he would not seek a third term in 2011 - in comments made to VOCM and then repeated in subsequent year-end interviews.
Williams' resignation, likely to come in 2009 or 2010 after a decision on the Lower Churchill, comes at the end of a year of continued set-backs for the premier who has been in equal measures petulant and posturing.

The prospect of his resignation came up earlier this year.  The Western Star – the province’s second daily newspaper suggested the Premier should consider resigning. He didn’t take well to the idea in April, but Williams was in a decidedly different mood with Debbie Cooper.

In answer to Cooper’s question, Williams called Thursday’s announcement the crowning achievement of his political career.  While he said he would likely run again, Williams did acknowledge there “could be circumstances that creep in, like health”.  Williams also said he was always reassessing the situation.
That, too, is a marked change from previous comments on his political future.

2011 could turn out to be a very interesting year in politics across the province.

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Average annual real GDP growth lower since 2003

The province’s real gross domestic product has grown at one third the average annual rate of the period from 1997 to 2003, according to figures compiled by Statistics Canada.

GDP  - the value of all goods and services produced in the province - grew by 3.0% annually, on average, from 2003 to 2008.  But between 1997 and 2003, GDP grew by an average of 8.9% a year.

Labour productivity increased by 6.4% annually, on average between 1997 and 2003.  However, between 2003 and 2008, productivity increased by 2.1% annually, on average.

this sort of concrete information should make anyone think twice about all those goofball commentaries claiming there was something they called the Danny Williams Effect driving the economy to unprecedented heights.

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Muskrat Falls = expensive power

In an interview with CBC Radio’s St. John’s Morning Show on Monday, deputy premier Kathy Dunderdale told listeners that Muskrat Falls power will cost between 14.3 and 16.5 cents per kilowatt hour to produce in 2017, the year of first commercial power.

Jeff Gilhooley: And how much – I’ve only got a minute left here unfortunately – I didn’t hear that in the announcement on Thursday, what is the new power going to cost us?

Kathy Dunderdale: The new power is going to cost us about $165 a megawatt hour.

Gilhooley: And how does that compare with what is coming out of Holyrood now? Any idea?

Dunderdale: Ah, I wouldn’t be able to give you that comparison right off the top of my head, Geoff, I don’t have those numbers before us, before me, but in terms of when we bring that on in 2017 that’s the cost in 2017, $165, or excuse me it’s $143 a megawatt hour. Anything that we would do other than Muskrat Falls would be either the same cost at that time, but escalating right up through the roof over the next 10, 15, 20 years.

The provincial government has not released any information the models they used to forecast prices for alternatives to building Muskrat Falls.  As such, Dunderdale’s claim about prices escalating through the roof is as reliable as her claim about the death of the Rhode Island memorandum of  understanding.

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Technicolor Dreaming Update:  In an interview with CBC’s supper hour news program, Dunderdale said that government’s price estimates for electricity include a PIRA forecast of crude prices being 50% above current levels by 2017-2020.  That would put crude at prices above US$120.

Double Down Update: nottawa takes this a step further and offers a link to a comparison of electricity prices over the past decade.  The Williams Muskrat Falls proposal is based on the idea electricity prices will double within the next 10 years.

Lower Churchill opinion: The End

The votes are tallied and despite an overnight dump of about 20,000 electronic “votes” the forces desperate to goose the VOCM question of the Day in favour of the Premier’s Lower Churchill proposal came up short.

If they weren’t obsessed with this sort of trivia, imagine what they could have accomplished.

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NL posts lowest productivity in Canada in 2009

Figures released on Friday by Statistics Canada show that Newfoundland and Labrador posted the largest drop in labour productivity in the country in 2009.

Productivity fell by 8.7 percent.  The second biggest drop was 4.1% in Saskatchewan. According to Statistics Canada,

Real output was down for the first time since 2004, because of a sharp downturn in oil and metallic mineral extraction. At the same time, hours worked fell by 6.3%, also the largest decrease among the provinces.

Real gross domestic product as down 14.5% from the previous year, but total compensation was up 2.4%, hourly compensation was up 9.4% and unit labour costs were up 19.8%. In each case those figures were the largest for the 10 provinces.  Only the territories saw higher increases in unit labour costs and hourly compensation.

Broken down by the goods and services sector, the figures showed higher losses in the goods producing sector.  That’s consistent with the declines in oil and mineral production in the province.

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No US market for Lower Churchill power: NL deputy premier

A VOCM news story running this weekend contains the following comments attributed to the province’s deputy premier, Kathy Dunderdale:

Dunderdale says the power Nova Scotia is buying from Newfoundland will be used domestically and nowhere else.

Dunderdale says the price that Nova Scotia is paying for the power is higher than market prices in the United States. She says there is no market for Nova Scotia to take our power and sell it elsewhere.

Dunderdale says the power will be used in Nova Scotia to replace coal-fire generation and to meet their energy targets.

Of course, if there is no market for Nova Scotia’s Emera to sell Muskrat Falls power in the United States, there’d be no market for this province to do it either.

That’s pretty much what your humble e-scribbler’s been saying about the Lower Churchill as well.

Meanwhile, from a PostMedia News story on last week’s Muskrat Falls announcement, comes an assessment by energy analyst Tom Adams:

However , Tom Adams , a Toronto-based energy consultant, says the once-rich markets of the Northeastern U.S. are now awash in cheap natural gas and demand there is also depressed by U.S. economic woes -- making it difficult, if not impossible, to sell much of the power from the Lower Churchill at feasible prices.

As a result, Adams says the economics of shipping electricity from the remote reaches of Labrador south by sub-sea cable simply won't work. He says Thursday's announcement wasn't a firm deal at all, but merely a "lobbying campaign" by Newfoundland and Nova Scotia for a "federal handout."

"There is a lot less here than meets the eye," he says.

Turns out Newfoundland and Labrador’s provincial government had the same thought.

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Unpublish update:  Good thing the copy is here because VOCM disappeared that story from its website. See the comments section for more.

Crude at US$60 in 2011: forecast

Now there’s a thought sure to frighten the bejeebers out of any ruling political party headed toward an election and a leadership racket, planning on spending voters into a stupor along the way and knowing the oil production on which it depends for revenue is also on the downward slope.

It’s only one projection mind you. 

Capital Economics forecast that crude prices will head downward in 2011 as the Untied States economy recovers.

The National Post reported at the end of October:

Julian Jessop, analyst with the London-based firm, predicts the price of a barrel of oil will slide to US$60 a barrel by the end of 2011 as the U.S. dollar recovers and global demand disappoints. This would be the same level as prices in the first half of 2007, before oil went into a bubble that touched highs of almost US$150 a barrel in the summer of 2008.

Interesting thought, that.

Very interesting indeed.

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We are all Newfoundlanders

The global economic problems are weighing heavily on some brows, so heavily in fact that some are musing on the idea that “nous sommes tous des terre-neuviens”.

We are all Newfoundlanders, via le monde.

Quand on sait que les Chinois et les Japonais détiennent respectivement 883 et 865 milliards de dollars de bons du Trésor américains, on n'ose à peine imaginer ce qu'il resterait de la paix mondiale si les Etats-Unis faisaient défaut sur leur dette. Ou la réaction des investisseurs étrangers qui possèdent 70 % de la dette publique française si celle-ci n'était plus remboursée. On se sentait déjà un peu irlandais ou grecs. On se sent un peu terre-neuviens aussi.

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Lower Churchill Opinion: the Battle of Shallow Valley

Helms Deep, it ain’t.

The struggle between the clicks overnight changed the results of the VOCM question of the day.

The VO computers have registered over 45,000 votes and the “No” side is back on top.

The Reform-based Conservative socks have evidently been busy, but not quite busy enough.

Don’t be surprised if they redouble their efforts after a night’s sleep, a case of Red Bull, a few hot pockets and some cold packs for their wrists. The Old Man would be mightily displeased if Gerry Phelan had to report a loss in so vital a test of political strength, especially during poll goosing month.

Updated:  verb tense corrected and a set of related links added.

Edward R. Murrow Flashback Update:  It’s like da blitz, b’ys.  As of 1300 hours local on Sunday, the QOTD is showing about 46,500 votes and the numbers are still running heavily for the “Hates It” forces.

At this rate, the “Loves It” crowd will have to push the total vote to over 100,000 to get the 70/30 split they drove for on Saturday.

That would be an all-time vote record and could well crash the VOCM system for only the second time in the history of the idiocy.

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Related:

• Lower Churchill Opinion: and then, like magic …
• Lower Churchill Opinion – Falling down on the job
• How the Tories get 28% more votes thanks to CRA
• Now that’s really suspicious
• The media and the message
• Shaping political attitudes

Lower Churchill opinion: and then, like magic…

[Note:  This was originally written on Saturday night and time-delayed until Sunday morning.  However, as events overnight changed the story, here it is with a new post to update is on the way.]

______________________________________________

The poll goosing army got its act together.

A little over 12 hours after your humble e-scribbler pointed out that the Old Man’s retirement scheme wasn’t polling too well at voice of the cabinet minister, things changed.

From a little over 7200 votes on Saturday morning there were an astonishing 25,413 votes later on.  Suddenly 70% of the universe is loving the retirement idea.

Here’s what the results were at about 10:30 Saturday morning:

This is a just a reminder that someone in the province’s reform-based Conservative Party pays way to much attention to this sort of trivial stuff. 

No one has documented the whole foolish business as consistently as labradore.   In January 2008, for example, labradore noted the gigantic number of votes on question of the day polls that were important to the Premier (or mentioned him by name) versus some other topics.

In October 2009, he noted the same trend with the new VOCM website even though some technical changes made it harder for some dork to sit at a computer and mouse click his way to premature carpal tunnel all to make the Old Man look better.

Now that one is interesting because it makes it pretty clear that the vote total earlier on Saturday was actually higher than the average already.  The late night total was more in line with the ludicrous numbers from the old-style VOCM website.

Meeker on Media has also done a few posts on it.  One titled “Vote fixing” appeared in 2008.  It’s been re-dated as a result of the recent switch to a new layout at the Telegram website.

After Meeker blogged about one technique for rigging the poll, someone must have tried it.  The resulting click duel wound up crashing the VOCM poll system. Meeker’s comments at the time are worth repeating because they show a similar pattern of insane click counts as we’ve seen so far on November 20:

I saw some irony in the question. I also noticed that, at the time (about 12:30 pm), there were almost 2,000 votes at the site, with 63 per cent disagreeing.

My prediction was that, if the Yes votes made a sudden resurgence, the Trained Monkeys would immediately start clicking No and the voting numbers would go into the tens of thousands (they usually like to maintain a 70 per cent share of the vote).

And my prediction was correct. People did want to play this game. Within an hour, the number of votes had doubled, and the Yes side was out in front. At 2:30 pm, I had to go to a meeting, and at that point the Yes side was still leading, with 55 per cent of 10,000 votes cast.

That's right, ten thousand! It was wild.

When I got home later in the evening, the No side was winning. Votes at that point were around 25,000, and they were back around 60 per cent.

While I was talking live on the radio with Linda Swain, the number of votes was actually increasing by the thousand, as the minutes went by. The last tally I saw was 53,000 votes, with No holding at about 60 per cent.

This poll question will be up all weekend. It’s going to be fun watching to see what happens by Monday morning when the VOCM will likely change the question.

In the meantime, as you look at this an laugh, just recall that someone has obviously been organizing this intense idiocy for the past seven years. 

And then Danny Williams complains about what he could get done if he wasn’t distracted.  Well some of us have been saying that for years. 

When this sort of foolishness turns up again, you have to wonder how much could have been accomplished if all the rest of his Fan Club actually did real work instead of obsessing with this sort of trivia to the point they spend an unhealthy chunk of a November Saturday making sure VOCM  news told the right story in its QOTD report on Monday

Incidentally, just for fun watch and see if the comments section of this post starts turning into a laundry basket full of Conservative sock puppets (right, not exactly as illustrated).

Odds are good it will happen just like they all turned up on the earlier one about poll goosing.

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Offshore board announces results of bid call

From the Canada-Newfoundland and Labrador Offshore Petroleum Board (19 Nov 10):

“The Canada-Newfoundland and Labrador Offshore Petroleum Board
(C-NLOPB) announced today the results of the 2010 Call for Bids NL10-01 (Jeanne d’Arc Basin )for exploration rights in the Newfoundland and Labrador Offshore Area. Bidding closed on November 17, 2010 and successful bids were received on both parcels offered totalling $16,300,000.

The bids represent the expenditures which the bidders commit to make in exploring the respective parcels during Period I. If companies discover significant quantities of petroleum resources as a result of the exploration work, they may then seek a Significant Discovery Licence from the C-NLOPB. Any significant discovery licences issued in respect of lands resulting from these exploration licences will be subject to rentals which will escalate over time.

The following bids have been accepted:

Call for Bids NL10-01 (Jeanne D’Arc Basin)

Parcel 1 (139,617 ha)
Husky Oil Operations Limited (67%)
Repsol E & P Canada Ltd. (33%)
$1,150,000

Parcel 2 (29,783 ha)
Husky Oil Operations Limited (50%)
Statoil Canada Ltd. (50%)
$15,150,000

Subject to the bidders satisfying the requirements specified in the Call for Bids and Ministerial approval, the Board will issue an exploration licence for both parcels in January 2011. The licences will be for a term of nine years, with an initial period of five years.”

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Falling down on the job – Lower Churchill opinion

Not so very long ago, the Reform-based Conservative Party had an army who spent their time clicking madly to make that any question of the day on the VOCM website went the way the Premier would like.

It was all part of the machinery designed to maintain an illusion that the regime du jour is wildly popular. Incidentally, November is one of the four months of the year when the entire poll goosing apparatus usually goes into high gear.

How times have changed.

At 10:30 AM on Saturday, the VO question of the day results looked like this:

Only one third of the respondents – out of a hefty 7207 - like the Premier’s Lower Churchill deal. Almost half did not like it and, curiously enough, another 21% were not sure about it.

Not sure?

Perhaps someone is falling down on the job.

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World of Tomorrow: media studies ph.d, Ver. 2.0

In 1969, the province’s major daily newspaper proudly declared that the contract to develop Churchill Falls was a good thing:

Fears that Newfoundland came out on the short end of the stick in the agreement to develop Churchill Falls appear to be unfounded.

In fact, Newfoundland fares quite well, although it may appear otherwise on the surface.

At the same time, the paper’s John Carter did acknowledge that the “$950 million project in Labrador… probably would have come earlier had it not been for Premier J.R. Smallwood's uncontrolled outbursts of provincialism...”.

Fast forward four decades and it is clear that, to paraphrase Premier Danny Williams from Thursday’s dog and pony show, the experience of that disastrous contract has surely taught everyone in the province a few lessons on what not to do the next time.

Over at the Telegram, they learned their lesson very well about waiting until they had an actual agreement to study before heaping on the praise.  Friday’s editorial begins with these sober and cautious words:

Lower Churchill is no longer a dream. It’s a reality.

Uh huh.

Right.

And the editorial accepts every single statement by every single government official from Thursday without question at all.

Lesson learned, indeed.

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Sky Captain and the Traffic of Tomorrow, November 15 - 19

Good boy, Dex.

People are loving the deal that wasn’t.

Here are the top 10 posts at Bond Papers for the past week, as determined by what the visitors are reading.

1. The World of Tomorrow:  media studies Ph.d edition
2. Muskrat Love
3. The World of Tomorrow
4. Williams announces political exit plan
5. The World of Tomorrow:  Basic Math
6. The politics of energy subsidies
7. Lower Churchill MOU – developing
8. Hydro:  different province.  same political problem.  same political solution
9. Court docket now online
10. Full of sound and fury

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AbitibiBowater announces pensions agreement

Issued by AbitibiBowater on Friday, November 19:

“MONTREAL, Nov. 19 /CNW Telbec/ - AbitibiBowater announced today that, as part of its restructuring process, it had entered into agreements with the Government of Ontario related to funding relief in respect of the material aggregate solvency deficits in the registered pension plans the Company sponsors in Ontario and Quebec. The agreements will enable the Company to seek the waiver of the conditions, as detailed in its restructuring plans, regarding the adoption of funding relief regulations. On September 14, the Government of Quebec announced an agreement between the Company and the Régie des rentes du Québec for similar relief measures. The agreements finalized with the provinces of Ontario and Quebec provide, among other things, that the Company will meet its future pension obligations in full to the beneficiaries. 

"The best way to ensure pension benefits continue to be paid out is to ensure a company stays in business. We are pleased that AbitibiBowater will continue to operate, that thousands of Ontarians will continue to be employed, and that existing pensioners will continue to receive their benefits," stated Dwight Duncan, Ontario Minister of Finance.

In addition, an agreement for the next five years has been entered into by the Government of Ontario and what will become one of AbitibiBowater's Canadian subsidiaries post emergence, AbiBow Canada, regarding its pulp and paper operations in the province. AbiBow Canada has agreed to apply specific measures regarding its governance and investment levels as well as the sustainability of its operations in Ontario.

"The agreement affects thousands of workers, retirees and families in Ontario and allows the Company to move towards the finalization of its emergence from creditor protection. We are all very pleased to see AbitibiBowater get back on its feet, and I am especially appreciative of the support of my colleague at the Ministry of Finance, Minister Dwight Duncan, for making this happen," said Michael Gravelle, Ontario Minister of Northern Development, Mines and Forestry.

This agreement will become effective as of the time of AbitibiBowater's emergence from creditor protection. Moreover, the parties have agreed to re-evaluate the covenants of the agreement at the end of the initial five-year term in light of the Company's situation, the conditions affecting the pulp and paper industry as a whole and the solvency of its pension plans.

"We have signed today an agreement that is a significant step toward our emergence. We are convinced we have obtained the best deal possible for all our employees and retirees in Canada, and we would like to thank the Government of Ontario for its ongoing support," stated David J. Paterson, President and Chief Executive Officer of AbitibiBowater.

The Company directly employs approximately 8,500 workers and has in the order of 20,000 pensioners in Ontario and Quebec. These agreements are subject to AbitibiBowater's and its subsidiaries' emergence from creditor protection, which is expected to occur this fall, and is subject to confirmation of its U.S. plan of reorganization.

AbitibiBowater produces a wide range of newsprint, commercial printing and packaging papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 19 pulp and paper facilities and 24 wood products facilities located in the United States, Canada and South Korea. Marketing its products in more than 70 countries, the Company is also among the world's largest recyclers of old newspapers and magazines, and has third-party certified 100% of its managed woodlands to sustainable forest management standards. AbitibiBowater's shares trade over-the-counter on the Pink Sheets and on the OTC Bulletin Board under the stock symbol ABWTQ.

For further information:

Investors       
Duane Owens 
Vice President, Finance   
864 282-9488
Media and Others
Pierre Choquette
Director, Public Affairs - Canada
514 394-2178
pierre.choquette@abitibibowater.com

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Aboriginal land claims remain substantial barrier to Williams’ legacy plan

Innu leader Joseph Roche may have been at the news conference announcing something or other about Muskrat Falls but, as he told the invite-only audience, the whole thing isn’t going anywhere until the Innu land claims issues are settled.

"One of the key outstanding issues now is the consent of our Innu people," Riche said.

"But we cannot do that yet, we need the federal government to resolve outstanding issues for our land rights agreement … it has been thirty years in the making and we have lost many of our elders and leaders in that time. Without this, the Lower Churchill project can not proceed." [cbc.ca/nl]

Riche was one of the invitees and the provincial government distributed a backgrounder on Innu issues.  But, as Premier Danny Williams knows already, the New Dawn agreement is stone cold dead. Riche reportedly put a damper on the excitement at the hotel news conference when he reminded people this thing wasn’t close to being a deal as far as Innu were concerned.

Chief Riche was talking about issues with the federal government, a key player the provincial government left out of the talks to this point.  That’s just one of the problems.  There is a substantial opposition within the Innu community to the project self and they aren’t interested in seeking anything happen on the river, period, full-stop, end of story, do-not-pass go and forget about the two hundred bucks.

And for those who missed it, someone seems to think that by selecting Muskrat falls as the first site, that will outflank the Innu opposition.  Elizabeth Penashue’s annual walk to Gull island doesn’t mean that Muskrat Falls isn’t as important.

The Innu aren’t the only aboriginal group with a claim that needs attention.

So far the provincial government has ignored the Metis of Labrador even though the Lower Churchill dams would be within the Metis claim area.  What’s worse for Williams is that the Metis are still smarting over his broken election promise from 2003 or his comment in 2009 that the project needed the Innu but not the Metis.

Other Premiers have long under-estimated the challenges of aboriginal land claims issues.  At the time he announced a memorandum of understanding to do way more that Danny Williams proposed, Premier Brian Tobin boasted he could finish a land claims deal with the Innu in 12 weeks.

That was 12 years ago. 

And Tobin’s proposal had a far more substantial basis for agreement than a terms sheet.

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Loyola off to Dublin

As your humble e-scribbler told you on August 13, Loyola Hearn is Canada’s new ambassador to Dublin.

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The World of Tomorrow: media studies ph.d edition

When there is so much official bullshit flying around, it shouldn’t be surprising that conventional news media wind up piling it higher and deeper on their own.

From the only newspaper Newfoundland nationalists care about comes a comment that ties Shawn McCarthy with the Ceeb’s Vic Adopia  for most ludicrous assertion of the day by a reporter:

He has been battling Quebec Premier Jean Charest for years over Hydro-Québec’s refusal to transmit power from the Lower Churchill project through its existing transmission grid to markets in Ontario and the United States.

Hydro-Quebec hasn’t refused to wheel Lower Churchill power.  NALCOR energy has refused to option space on the grid or start talks to build any needed extra transmission capacity.

But it gets better. 

Since April 2009, NALCOR has been wheeling Churchill Falls power through Quebec to Emera at the New York border. That deal – which came long after the Lower Churchill transmission requests involved in recent Regie decisions – prompted Danny Williams to state proudly that Labrador power was no longer stranded:

This is truly a historic and momentous occasion for the people of our province, as never before have we been granted access through the province of Quebec with our own power.

But what is really amazing about the Globe piece is that Danny Williams actually spent five years trying to get Hydro-Quebec to take an ownership stake in the Lower Churchill without redress for the 1969 deal set to one side.

Oh, and just for fun, here’s what Danny Williams said in St. John’s on Thursday about whatever it was he announced with Darrell Dexter:

This is a day of great historic significance to Newfoundland and Labrador as we move forward with development of the Lower Churchill project, on our own terms and free of the geographic stranglehold of Quebec which has for too long determined the fate of the most attractive clean energy project in North America.

Historic agreement with Quebec. 

Historic agreement with someone else because Quebec wouldn’t agree.

Which is it?

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The World of Tomorrow: Basic Math

Muskrat Falls:  824 megawatts with an estimated capital cost of $6.2 billion.  That works out to about $7.5 million per installed megawatt.

La Romaine:  1,550 megawatts for $6.5 billion.  That works out to $4.1 million per installed megawatt.

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The World of Tomorrow

Wow.

Seldom has an announcement of any kind been accompanied by such a litany of sheer bullshit.

CBC is claiming that this is a deal to build the Lower Churchill and that, oddly enough is what CBC already announced in January 2008. One mainland CBC reporter debriefed his mainland colleague with the ludicrous claim that in the Churchill Falls deal  Newfoundland bore all the costs, and Quebec collects most of the revenue. The rest of his debrief was no better.

So what was announced?

Well, let’s just remind everyone that this morning your humble e-scribbler put it this way:

If this isn’t a concrete deal to start work soon, then Thursday’s announcement can all evaporate as easily as the others did.

This is not even a memorandum of understanding

Today, two companies signed something called a terms sheet.  That’s not a deal, an agreement, an agreement in principle, a memorandum of understanding or a letter of intent.

A terms sheet is – in business parlance – nothing more than a general, non-binding set of instructions to negotiators to guide their future discussions.  For all practical purposes, it has only slightly more value than an informal chat over a beer.

You can tell this is not a firm commitment by the companies to do much beyond keep talking because it has a time limit:  November 30, 2011.

When Danny Williams announced a memorandum of understanding on Hebron, he could treat the thing as a fairly solid basis of agreement.  There were details to work out and there was always the chance of things going sour.  But there was no timeline.  Everyone knew the lawyers would set to work to come up with a formal agreement, but they didn’t stick an expiry date on it.

That’s because they had a commitment to carry forward unless something dramatic intervened.

But this thing has an expiry date clearly stamped on it.

As exciting as some people would like Thursday’s announcement to be, the reality of the it is far different.

Heck, Danny Williams didn’t even get the date right.

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Contextual Update:

• Ready for a better tomorrow:  a May 2006 post that puts the political value of Labrador hydropower in a wider context.  The post title was Brian Tobin’s 1996 provincial election campaign slogan. 

More to follow…

Muskrat Love

To help you get ready for the splendiferous announcement later today, here are some things to keep an eye on.  Undoubtedly, there’ll be more spin than a baton twirlers’ convention riding on the Mad Hatter’s Tea Party ride at Disneyworld.

Just keep your head and you won’t get nauseous.

1.  Ready for a better tomorrow.  Just remember that tomorrow is a day that never seems to get here.

There have been memoranda of understanding before that came to naught.  Remember 1998?  Brian Tobin and Lucien Bouchard dropped a half million to announce not only a Lower Churchill deal but a reworking of the Churchill Falls project as well.  Result:  Nada.

Then there was the memorandum of understanding to sell 200 megawatts of power to Rhode Island.  That fell apart because NALCOR couldn’t deliver the power to Rhode Island at a price anyone could afford.

Don’t forget Frank Moores’ big explosions on either side of the Straits.

And as we look at a likely memorandum of understanding between NALCOR on one side and the Government of Nova Scotia and Emera on the other, let’s not forget that NALCOR already has one:  signed in January 2008.

If this isn’t a concrete deal to start work soon, then Thursday’s announcement can all evaporate as easily as the others did.

2. Cost.  The lower the number the less likely it is real.  CBC’s David Cochrane mentioned a figure of $4.0 billion.

The line from Muskrat Falls to Soldier’s Pond, just outside St. John’s came with an estimated cost of $2.2 billion in 1998. That would be close to $3.0 billion today.  There’s an estimate of the Nova Scotia line that runs between $800 million and $1.2 billion. Take the upper one just to be on the safe side since proponents tend to underestimate megaproject costs big time. So just the lines alone are likely to cost more than $4.0 billion.

A 900 megawatt project in British Columbia (Site C) is coming with a $6.6 billion price tag so it is safe to work with a cost estimate for this project of around the same amount.

The 70/30 debt-equity ratio NALCOR boss Ed Martin has mused about publicly would give you a borrowing requirement of around $4.0 billion.  There’s David Cochrane’s number.  The rest of the cash would come from NALCOR’s small equity stakes in three offshore projects, unless Emera is coming on board with an ownership stake.

3.  How much is being exported?   A couple of weeks ago 60% of the project’s estimated 800 megawatts would go to Nova Scotia.  According to reports on Wednesday, 60% of the power is now coming to the island and – here’s the kicker – the island portion of the province doesn’t need it.  However, NALCOR does need the captive market in Newfoundland to help underwrite the massive project.

Keep your eye on this one because it will tell you how expensive electricity will get in Newfoundland and Labrador. As it looks now, things are lining up to prove Danny Williams was right when he said last fall that “…good, cheap, competitively priced energy, can't be offered to that whole region.” 

4.  Environmental process Day Zero:  As regular readers already know, this thing will have to go through an environmental review with a whole new section never before considered.

5.  Holyrood.  For some unfathomable reason, no one seems to want to believe NALCOR’s own words on Holyrood:

It is important to consider that whichever expansion scenario occurs, an isolated Island electrical system or interconnected to the Lower Churchill via HVDC link, Holyrood will be an integral and vital component of the electrical system for decades to come. In the isolated case Holyrood will continue to be a generating station; in the interconnected scenario its three generating units will operate as synchronous condensers, providing system stability, inertia and voltage control.

The diesel plant at Holyrood will not be shuttered, mothballed or otherwise displaced or taken offline.  To the contrary, it will run 24/7/365 but at a reduced capacity. Holyrood will be an “integral and vital” component of the province’s electrical system.

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Offshore board releases helicopter inquiry report

From the Canada-Newfoundland and Labrador Offshore Petroleum Board:

The Canada-Newfoundland and Labrador Offshore Petroleum Board
(C-NLOPB) received the Report of the Offshore Helicopter Safety Inquiry today and is releasing it to the public immediately.

"On behalf of the Board, I thank Commissioner Robert Wells, commission counsel and the staff of the commission for their work during the course of Phase I of the Inquiry and with respect to the completion of this report," said Max Ruelokke, Chair and CEO of the C-NLOPB.

"I would also like to extend our thanks and appreciation to those who testified during the Inquiry for their time, commitment and contributions."

The C-NLOPB will take up to 30 days to review the recommendations and move toward the development of an implementation plan. The Board will not be commenting on the report until it has completed its review.

To obtain a print copy of this report, please contact information@cnlopb.nl.ca with a full mailing address. The report will be sent within three business days. Persons wishing to pick-up the report are asked to state this in their request.

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Lower Churchill MOU – the invitation

Some people are getting them via e-mail.

Your humble e-scribbler wasn’t one of them, nor was Nova Scotia Premier Darrell Dexter.

Print this off and save it as a souvenir.

- srbp -

Sky Captain got his wingman after all Update:  Apparent Dex was just joshin’ Sounded like he just had bad talking points.  Dex is  on the way to tie his province to this very expensive version of the Lower Churchill.

Atta boy, Dex!

Lower Churchill MOU - developing

1.  CBC is reporting an announcement tomorrow on a memorandum of understanding involving Emera, NALCOR, the Government of Nova scotia and the Government of Newfoundland and Labrador to develop Muskrat falls (800 MW)

2.  Nova Scotia Premier Darrell Dexter is denying the reports.

This story is developing.  More will follow.

In the meantime, amuse yourself with:

• Williams announces political exit plan
• US and NL taxpayers might help subsidise costly big-hydro project
• Williams’ shift sends Lower Churchill back to enviro drawing board for second time in a year
• More potato, potato
• Tshaukesh leads quiet resistance to Old Man’s Dream
• What Danny actually said (with translation)
• Danny Williams and the Philosopher’s Stone:  converting principles to cash

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