13 July 2012

Provincial government working Hebron dispute outside terms of benefits agreement #nlpoli

Lots of words came from Premier Kathy Dunderdale and natural resources minister Jerome Kennedy in their dispute over construction of a major module for the Hebron project.

What became pretty clear – if you listen -  is that the provincial government is trying to squeeze some resolution to the dispute outside the provisions of the Hebron Benefits Agreement.

For starters, you can find a video of the scrum at cbc.ca/nl.

Most of what Dunderdale said at the front end of the scrum was fluffy stuff that added nothing to what we know already.

Things got a bit more interesting when Jerome Kennedy started talking (around 4:30).  He gave some dates:

  • May 9:  ExxonMobil on behalf of the Hebron partners advised the province verbally they planned to build the module outside the province. 
  • May 27:  the provincial government received a capacity report from ExxonMobil that presents the argument that the module cannot be built in the province without adversely affecting the target date for producing oil at Hebron.
  • June 27:  Kennedy says the province has 30 days to reply to the capacity report.  That date went by two weeks ago.  Kennedy indicates the provincial government will reply – that is, in the future - meaning that they already missed the target date for response.

Take a look at the Hebron Benefits Agreement. Exhibit “B” lays out a clear three stage dispute resolution approach.  None of it appears to match with what Kennedy described.

And that’s especially clear when Kennedy says the provincial government had a 30 day window to file a report and still hasn’t done so.  The provincial government is already 14 days or so beyond that target.

Listen to the rest of the scrum and you hear talk about a compromise or an alternate arrangement, not a dispute to be resolved through the established process. You’ll hear that especially at around the 11:00 minute mark.  The Premier refers to the over-riding importance of getting the “value” of the module for the province but leaves it wide open as to what that “value” could be. In the world the Conservatives live in, everything converts to cash

David Cochrane gave Dunderdale a hard time with a series of questions that focused on the fundamental conflict of interest between Nalcor and the provincial government. Dunderdale stumbles at one point referring to a difference of opinion between the two. She clarifies what she meant, but Cochrane’s questions are well-founded:  Nalcor and the provincial government have separate interests. The dispute over the module actually arises from a conflict of interest inherent in the way the provincial government used Nalcor to lead negotiations on behalf of the provincial government.