20 February 2018

TDIH: "Quebec paper reports Lower Churchill agreement" #nlpoli #cdnpoli

Two decades ago, there was talk of a deal to develop not one, not two, but three dams in Labrador.

The story broke in a Quebec newspaper,  Le soleil,  on February 19 and the next day the Telegram did a front pager written by business editor Chris Flanagan.

"The big bonus for Newfoundland from a deal to develop the Lower Churchill is not simply cheaper electricity and a transmission line from Quebec,"  Flanagan wrote, "but an opportunity to send natural gas-generated power the other way, says a Quebec journalist with high level sources in both provinces."

"The Newfoundland government has done studies examining the potential of bringing ashore natural gas from Hibernia and other sites on the Grand Banks, using it to produce electricity and selling it on the North American grid, said Michel Vastel, a veteran political correspondent and business writer with the Quebec newspaper, Le Soleil."

Vastel told The Telegram his sources were in both provinces and that the provincial government in Newfoundland and Labrador had studies supporting development of offshore natural gas. 

"In his 'briefings,' from high-level sources, Vastel said reports have estimated Newfoundland's average rate will increase 30 per cent over the next 20 years -- an increase that won't happen if the Lower Churchill goes ahead."

The idea had its critics.  "Stan Marshall, the president and CEO of Fortis Inc., which owns Newfoundland Power, has said a transmission line to St. John's makes no economic sense.

Here are some key details of the deal that never was:

  • "...Newfoundland will receive approximately 800 megawatts, Labrador 200 and Quebec 2,100 from the Lower Churchill. Construction of the project will create 12,000 person-years of employment and power is expected to be on the grid by 2007."
  • "The Lower Churchill hydroelectric project consists of Gull Island, with a generating capacity of 2,264 megawatts, Muskrat Falls, at 824 megawatts and Upper Lobstick, at 160 megawatts for a total of 3,238 megawatts. The cost of the project, including transmission lines, is estimated at $12 billion."
In the talks actually announced in early March 1998,  the two provinces set aside $20 million to study Muskrat Falls and focused instead on expanding Churchill Falls and building Gull Island.
20 years later we got one tiny dam and big transmission line for that.

The Telegram included a cost of the transmission line from Labrador:  "According to several news reports, the Churchill-to-St. John's transmission line -- including an underwater component across the Straits -- would cost about $2 billion, and is to be financed by Ottawa."

"The federal government's major benefit would come from reduction in greenhouse gas emissions that will go a long way to helping Canada reach emission targets established at the 1997 Convention on Climate Change in Kyoto, Japan."