09 May 2012

“A new Sprung Greenhouse”: one year later #nlpoli

Since May 8 was the 25th anniversary of the announcement that the people of Newfoundland and Labrador were going into the cucumber business, it seemed fitting to give a link to a post of April 5, 2011.

The title of the old post was “A new Sprung greenhouse in the wilds of Labrador.” 

Note how little has changed in a year:  Kathy Dunderdale is still insulting people left and right.  The reasons for her reliance on endless personal digs remain the same.  That reflects badly on her even more now than it did then.

her grasp of economics and the economics of her pet project remain today as abysmal as they were then.

And yes, the goal is still to have the people of Quirpon and Flower Hill pay the full cost for the electricity.  Any others will get it free (Nova Scotians) or far below the cost of producing it.  That’s what Kathy Dunderdale meant when she said:

They are not going to buy it from us, Mr. Speaker, for 14.3, so we have to go into the market and sell at what the market can bear.

The markets in the United States and elsewhere in northeastern North America cannot bear Muskrat Falls electricity even at the artificially-deflated cost of seven cents a kilowatt hour.  That is without the cost of getting it from eastern Labrador down the thousands of kilometres of transmission lines to wherever the crowd at Nalcor might want to sell it. 

To put that in perspective and to explain the connection to the Sprung cucumber fiasco, consider the basic economics of the project as laid out by the Newfoundland and Labrador Heritage website:

A single Sprung cucumber cost $1.08 to produce, but sold for 63 cents in Atlantic Canada and just 25 cents (US) in Massachusetts.

That’s exactly the same concept as Muskrat Falls.  Well, exactly the same except that Sprung was actually able to sell product outside Newfoundland and Labrador.

And if you go back and look at all the controversy that swirled around the project and the defences of it mounted by the provincial government, you’ll likely start to feel decidedly uneasy.

It will all be too familiar.

- srbp -