27 June 2016

A foundation of lies and deceit #nlpoli

You could feel the shock among the local media on Friday as Stan Marshall carefully dissected the insanity that is Muskrat Falls.

Didn't matter if you heard the voices on the radio,  watched them on television or read them online.   The reporters' emotional reaction transferred through whatever medium it was that conveyed their words.  Here it was laid out in stark detail:  billions over budget,  years behind schedule,  a financial burden for the province its people will be sorely pressed to bear and all of it built - in essence - on a series of false statements,  faulty assumptions, and anything but facts and reason.

Never mind that all of what Stan Marshall said was - in effect - already widely know and had been known for most of the preceding decade.  Here you had someone as rich or richer than Danny Williams telling them that Muskrat Falls was utter shite.  By the unspoken law of Newfoundland politics,  the poor benighted scribblers now had no choice but report it.
Muskrat Falls was now officially a bad thing.

But notice when some of the reporters date the start of the project.

In his Saturday column, Telegram editor Russell Wangersky put the start of the project at December 2012, the official "sanction" date used by Nalcor.  CBC's Peter Cowan tweeted a graphic to help people understand the cost increases. His start date was December 2012. Hunt around. You'll find a few more that start counting the cost over-run from December 2012.

No stopping the Lower Churchill since 2005

The biggest problem with that date is that it is wrong.  It is misleading. It pretends that up to that point,  the provincial government might have stopped the whole thing.  Nothing could be further from the truth.  Regular readers know the history of the Lower Churchill project after 2003.  The thing has been unstoppable since Danny Williams tied his political future to starting the project the project.  The original version of the project called for the standard configuration and purpose:  a large dam at Gull Island with all the power offered for export.  A smaller dam at Muskrat Falls might get built eventually.

By 2010, though, electricity prices in the United States had fallen to the point where no one was interested in electricity that would cost upwards of 17 cents a kilowatt hour.  Even efforts to sell the power in New Brunswick fell apart based on price.  With no export sales but with a political need to have a project to let him quit politics, Danny Williams and the Nalcor management team changed the project.  They'd now build the smaller dam and have local taxpayers cover the entire cost through their electricity rates. That would allow Nalcor to sell electricity in the export markets.

Nalcor slid the project through its management approval as if it was merely a change in the construction time line:  they'd build the smaller the dam first.  The reality was they had changed the project entirely. it was the small dam, one that hadn't been seriously studied since the 1970s, for an entirely new purpose of domestic supply. Studies to answer key questions about the dam project - like whether or not the North Spur could serve as part of the dam structure - didn't exist. If the natural landmass of the North Spur couldn't reliably hold back the water for the small reservoir, the cost of the dam would likely double. It represented an enormous risk to the project, normally the kind of risk investors would consider before embarking on a multi-billion dollar project.  With this project, the provincial government just kicked all the unanswered questions down the road, planning to complete them after construction was well underway and there was no way of stopping the project.

Nalcor had no studies to show that Muskrat Falls was the lowest cost way of meeting domestic energy needs although the company and the politicians would repeat the same claim over and over. By 2012, the provincial government had to pay consultants to deliver reports that arrived at  pre-determined conclusions to try and rationalise political decisions taken in 2010.  The provincial cabinet even tried to co-opt the public utilities board into approving the project by reviewing Muskrat Falls against a single, pre-determined, worst case alternative.

Nalcor,  the politicians who committed to the project,  and the local business people who backed it built their case on a foundation of lies and deceit.  There were never any genuinely independent studies that ever confirmed any of the claims about Muskrat Falls made by its proponents.  In fact, the only genuinely independent review of the Lower Churchill - the Joint federal-provincial review - concluded that Nalcor had failed to provide any justification of the project based on need.  The joint federal-provincial panel released its report in 2011, almost year after Danny Williams had quit politics in apparent triumph, and before Nalcor started construction.

The panel actually rejected the project twice.  The first conclusion - made public in January 2010 - was brutally simple:  "The Proponent [NALCOR Energy] has failed to justify the Project in energy and economic terms,"  the review panel wrote in January 2010,"and has not provided an assessment of greenhouse gas (GHG) emission reduction in possible export markets as required in the detailed criteria provided in the EIS Guidelines."  

You can find that in an SRBP post from August 2010.  At the time, your humble e-scribbler was pouring cold water over suggestions that the Lower Churchill - that is, Gull Island - was about to get the green light.  Frankly, no one thought Nalcor and the provincial government would pull the fast one they did a couple of months later.  What's interesting in hindsight, though is that the the August 2010 post was prompted by a pro-Nalcor piece that appeared in the Telegram. It is typical both of the aggressive way cultivated media support for the project and the uncritical local reporting on the provincial government during the Williams years and for a while afterwards.  

Enabling the deception

Starting the clock in December 2012 is the same kind of mistake that former Conservative candidate John Noseworthy made when - as the auditor general - he assessed the level of overspending in the House of Assembly from the last authorised spending level instead of the original budget. It lowballs the financial impact.  The result of Noseworthy's approach is clear from looking at the financial section in Chief Justice Green's report on the scandal.  Noseworthy's approach effectively hid millions in inappropriate spending that involved more people than the few popular attention has tended to fall on.  In fact, Noseworthy's approach supported the political frame on the story - Danny stops corruption - and masked the fact that the deliberate overspending continued after 2003.

In Muskrat Falls, starting the clock using Nalcor's date in 2012 hides $1.2 billion in cost over-runs. The false 2012 start date also draws attention away from the individual who is chiefly responsible for Muskrat Falls.  Danny Williams was out of office for two years by then but in practise, Williams' influence in the party remained long after.  As recently as 2014,  Danny Williams influenced his party's leadership contests in a way unequalled to other politicians in Canada.

Starting the Muskrat Falls clock in 2012 also masks the role local media played in building support for Muskrat Falls. In 2010,  they credited Danny Williams not with starting construction but with actually finishing the long-standing public desire to finish the Lower Churchill project and put the screws to Quebec. It was a continuation of the ease with which the media fell in line with Danny Williams' attacks on "Quebec" in 2009.  Williams recited political myths long accepted by the popular culture and the local media recited the myths without question.

In November 2010,  the Telegram editorial on Muskrat Falls showed no hint of scepticism about anything.  "Build it and they will come" the editorial enthused.  Muskrat Falls "seems to be the gamble. And it’s a big one.  But you can’t play [the energy game] unless you roll the dice." In its editorial on Williams' time in politics,  the Telegram labelled him as the fighter.
In stepping down from office Thursday, Williams is leaving at the top of his game. Only a week ago, he announced terms of a partnership with Nova Scotia’s Emera Inc. to build a generating station at Muskrat Falls to transmit power from Labrador to the island and across the Gulf to the Maritimes. 
It’s not the megaproject everyone envisioned, but it represents a longtime goal few believed Williams could ever achieve: Lower Churchill power without Quebec.
That last line is particularly funny given that the Telegram - like all local media - had ignored the story that Williams and his administration had tried unsuccessfully through five years of secret talks to entice Hydro-Quebec to take a share of the Lower Churchill, without any talk of redress for the 1969 power contract.

The facts about the Lower Churchill did not appear magically last week just because a rich, successful businessman talked about them.  The facts have been well-known in public all along. While more and more people have become sceptical of official claims about Muskrat Falls as time went by,  only a handful of people in this province have been talking about the facts of the matter consistently all along. Even now,  as people finally understand the magnitude of the debacle that is Muskrat Falls,  there are still subtle but important distortions of the public record coming from the same parts of our society that helped spread the Muskrat Falls deception in the first place.

The people who made the decisions about Muskrat Falls are the same people who created the rest of the financial mess we currently face. We would not be in this mess right now if  the people who committed to Muskrat Falls and deliberately spent more than the public could afford hadn't had the active support of voluntary assistants throughout our society who helped them spread the lies.