Policy is people #nlpoli

Kim Keating is a member of the newly-appointed council to advise the provincial government on oil and gas issues.

She's a professional engineer,  a senior official with a local company in the oil and gas business, and in the recent past she was the president of the St. John's Board of Trade the year that the Board wholeheartedly endorsed Muskrat Falls.

That's important because the Board not only endorsed Muskrat Falls for all the benefits that flowed to companies like the one Keating works for, but also because the Board was willing to trade away free enterprise in order to get those juicy business goodies. A key element of making Muskrat Falls work was the creation of a monopoly for Nalcor so that the company could force local consumers - and local businesses - to pay whatever it would take to satisfy Nalcor's creditors.

In other words, no matter how high the price for the project went,  local consumers would be stuck with the costs. Keating and her associates were okay with that.

But there's more to the issue than that.

Foundations #nlpoli

Natural resources minister Siobhan Coady was the latest in a long line of energy ministers from this province who have done the annual pilgrimage to the offshore technology show in Houston in early May.  "With our unique location," Coady said of Newfoundland and Labrador, " we have built a solid foundation, have incredible prospects, and look forward to the many opportunities for exploration and development on the horizon."

Those foundations must have been built by the same crowd that were pouring concrete in Muskrat Falls.  Not even four weeks later the whole shooting match is caved in.

Comparative Hydro Costs #nlpoli

Konrad Yakabuski’ s column in the Monday Globe is an interesting one for people in Newfoundland and Labrador for a couple of reasons.  ‘

First of all,  Yakabuski pointed out the “broader credibility problem facing all of Canada’s provincially owned electric utilities.”

Second of all,  for all those people in this province who are complaining that the Liberals won;t release any of their policies before the election, we have had lots of time to debate the energy policy of the current administration for a decade.

For all of that time, the people currently bitching about the lack of policy debate didn’t want to debate that energy policy despite the mounds of evidence that what the provincial government was doing with the former hydro corporation was headed for bad policy.

Mullet Policy #nlpoli

Government is like a lot of things in life:  it’s about finding solutions to problems.

Okay.

If that upsets your cynical sensibilities,  think about it as about finding answers to questions.

Better?

Good.

Now matter what way you want to look at it,  that’s basically what government is supposed to do.  There’s a problem.  Government comes up with the answer.  Ideally, they ponder the problem.  They look at it from a whole bunch of angles.  They figure out if it really is a problem first and then come up with a way to deal with it.  They might even come up with a bunch of ways of dealing with it

Muskrat Falls: what an independent review really looks like

The provincial Liberals included a handy table with their Friday news release on the joint federal/provincial environmental panel’s report on Muskrat Falls.

The chart compares what the environmental panel said would be a thorough, independent review of the province’s energy needs and what the Conservatives are setting up through the public utilities board.

 

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Containing Ottawa’s Skyrocketing Power Bill

by Tom Adams and Brian Lee Crowley

[Note:  the authors prepared the following commentary to coincide with the recent energy ministers meeting.  It has appeared in other publications across the country.]

Federal taxpayers are exposed to an explosion of liabilities to fund provincial electricity misadventures, the worst of which are undermining Canada’s international trading reputation. A federal-provincial energy conference in Kananaskis, Alberta running until July 19th threatens to up the ante.

Last week, Texas energy titan T. Boone Pickens launched a $775-million
NAFTA challenge alleging the Ontario government has discriminated against his privately owned wind energy company. Pickens is demanding that the federal government pay up.

The federal government is also defending protectionist elements of Ontario’s controversial Green Energy Act against a challenge Japan has launched with the support of the United States and European Union at the World Trade Organization.

Ontario is not the only province with electricity initiatives undermining Canada’s trading reputation and sending the bill to Ottawa.

Last August, a NAFTA dispute panel obliged federal taxpayers to pay the industrial firm Abitibi-Bowater $130 million after the government of Newfoundland and Labrador confiscated electricity generation assets. Far from holding the Newfoundland government responsible for shafting federal taxpayers, Prime Minister Stephen Harper instead promised loan guarantees for submarine transmission connections
required by a Labrador power megaproject with very dubious economics.

With the subsidy offer, Harper effectively rewarded Newfoundland’s government and further impaired Canada’s trade reputation in an unsuccessful bid to win seats on the Rock (although the Conservatives did pick up a seat in Labrador).

Newfoundland justifies its power scheme on the basis that provincial power costs are going to soar anyway, eventually making pricey Labrador power relatively cheap by comparison. Most of the new Labrador power, however, is earmarked for the Maritimes and potentially New England. Unlike Newfoundland, those markets have access to North America’s glut of natural gas, a key factor driving down average power rates across the U.S.

Any subsidies to Labrador power are likely to attract yet more trade complaints from generators in New England, particularly those now selling significant amounts of power into the Maritimes. International competitors of export industries in Atlantic Canada may also complain.

The Newfoundland government estimates that a federal subsidy for the Labrador power project in the form of a loan guarantee will cut local power costs by 6 or 7 per cent. Likely cost over-runs could push the value of the federal guarantee much higher.

The Kananaskis meeting provides a platform for provincial governments and lobby groups to push the federal government deeper into provincial electricity matters. Many, including the governments of Ontario and Newfoundland & Labrador, have demanded federal subsidies to interprovincial transmission projects. Ontario also demands federal subsidies for its nuclear expansion ambitions.

The federal track record in the electricity business is dubious, as illustrated by its recent cut-the-losses exit from nuclear power development and marketing. Even if the federal record in the electricity business was solid, using the federal spending power to buy its way into provincial energy affairs now will annoy our trading partners, promote inefficiency and create jurisdictional confusion.

The federal government should focus its electricity sector involvement first on its core constitutional responsibility for interprovincial trade and commerce. The best way to make Labrador power truly competitive against abundant natural gas is to avoid hugely expensive long distance submarine transmission and to instead achieve the best possible economies of scale with more affordable transmission over land.

To reach markets in Ontario or the U.S. Northeast, Labrador power must transit Quebec, which has its own electricity export ambitions. If those provinces cannot negotiate a mutually agreeable solution, the federal government should act to ensure the constitutionally-guaranteed freedom of interprovincial trade. Ontario and Newfoundland should not require Quebec’s approval to move electricity any more than Alberta needs Saskatchewan’s permission to move natural gas to Manitoba, Ontario and Quebec.

Naturally, Quebec does not welcome another big hydro-power competitor, particularly while market prices are low. However, to maintain its access to electricity markets in the United States, Quebec already accepts the U.S. Federal Energy Regulatory Commission’s non-negotiable rules compelling them to open their market to electricity imports. The constitutional powers that the U.S. relies upon to promote highly successful inter-state trading are similar to our own federal
government’s constitutional authority, which Ottawa has always been reluctant to exercise in the electricity sector.

Canadians too should be entitled to an open national electricity system, where no province can hold its neighbours hostage and Canadians can buy and sell power freely. The federal government should keep federal tax dollars out of the electricity sector. Any subsidies to the sector create unfairness to taxpayers across the county and harm Canada's trading reputation, vital to our long term economic interests. Instead Ottawa should use its legitimate powers to create an open national electricity market that treats everyone transparently and fairly.

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Tom Adams is an independent energy and environmental advisor. He has held a variety of senior responsibilities including Executive Director of Energy Probe from 1996 until September 2007, membership on the Ontario Independent Electricity Market Operator Board of Directors, and membership on the Ontario Centre for Excellence for Energy Board of Management. His guest columns have appeared in many major Canadian newspapers. He has been a media commentator for 20 years and a lecturer in energy studies at University of Toronto. He has presented expert testimony before many regulatory tribunals in Canada on a wide variety of energy subjects. He has made presentations to Legislative Committees in Ontario and New Brunswick, academic, regulatory and trade conferences, the Atomic Energy Control Board, and the Canadian Nuclear Safety Commission.

Brian Lee Crowley has headed up the Macdonald-Laurier Institute (MLI) in Ottawa since its inception in March of 2010, but he has a long and distinguished record in the think tank world. He was the founder of the Atlantic Institute for Market Studies (AIMS) in Halifax, one of the country’s leading regional think tanks. He is a former Salvatori Fellow at the Heritage Foundation in Washington DC and is a Senior Fellow at the Galen Institute in Washington. In addition, he advises several think tanks in Canada, France and Nigeria.

Crowley’s published numerous books include two bestsellers: Fearful Symmetry: the fall and rise of Canada’s founding values (2009) and MLI’s first book, The Canadian Century; Moving Out of America’s Shadow, which he co-authored with Jason Clemens and Niels Veldhuis.

Crowley twice won the Sir Antony Fisher Award for excellence in think tank publications. From 2006-08 Crowley was the Clifford Clark Visiting Economist with the federal Department of Finance. He has also headed the Atlantic Provinces Economic Council (APEC), taught politics, economics and philosophy at various universities in Canada and Europe.

Crowley is a frequent commentator on political and economic issues across all media. He holds degrees from McGill and the London School of Economics, including a doctorate in political economy from the latter.

Strangling energy innovation

The Telegram editorialists are finally putting it all together, at least when it comes to the provincial government’s energy company, the Muskrat Falls project and taxpayers:

It looks a lot like the province would prefer all its eggs in one basket. Or, more to the point, the province not only wants to run an energy warehouse, but actually wants to own it all as well. In its own way, that handcuffs consumers in this province. Because one company will decide the most effective way to produce and supply our power. We’ll just pay for it.

Monopoly control is exactly the premise of the Conservative’s energy plan released just before the last provincial election.  Very few people read it and there’s never been much debate about it. But make no mistake:  the heart of the plan is about strangling any alternative to whatever Nalcor wants to do.

It’s about absolute control.

And it’s about talking about wind energy while deliberately preventing any wind energy development outside of some very small token projects.

The reason is simple:  wind, small hydro and conservation would basically make the Muskrat Falls megadebt project utterly irrelevant.

The Telegram editorial notes that the Nova Scotia energy regulator just set a rate for private wind generating projects selling power into the provincial grid.  The rate is 13.9 cents per kilowatt hour.  As the Telegram reminds everyone, that’s below the 14.3 cents Muskrat Falls is forecast to cost;  and that’s if  - by some extraordinary miracle - the thing doesn’t go over budget.

Who pays the extra cost?

Why the people of Newfoundland and Labrador, of course. 

Full freight, plus profit.  Emera gets a share of the transmission cash inside the province as well.

Meanwhile, Nova Scotians will get a giant chunk of Muskrat Falls power for free;  if you want to take the $1.2 billion Emera will spend on a transmission line as payment for the power (it really isn’t), then the price they would pay comes out to be something like 3.5 cents per kilowatt hour.  If Emera wants more power than the stuff they get for free, they will pay about 9.5 cents per kilowatt hour for the extras.

Pretty sweet.

Well, except if you live in Newfoundland and Labrador.

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Making the Most of Our Energy Resources (Part I – Electricity Reform)

In slightly more than a decade, fundamentally bad policy decisions by Liberal and Conservative administrations have turned the provincial government’s electricity corporation into an unregulated, unaccountable monster.

Such is the power of this hydra corporation as we enter the second decade of the new millennium that it can corrupt the public body  - the board of commissioners of public utilities - that is supposed to control the corporation in the public interest and turn it, instead, into nothing more than a tool of the corporation’s Muskrat Falls venture, all with the enthusiastic support of the provincial government.

The result of all this is that the people of the province will not be getting the most of their own resources.  Rather, they will pay dearly to supply discounted energy to other people.

No single act created the beast.

No single act will bring it under control.

But there is no question that the province’s electricity industry must be radically over-hauled.  If we allow the industry to continue on its current disastrous course, what should be a very rosy future for the people of Newfoundland and Labrador  may well turn out to be as bleak as the bleakest time in the province’s history during the 20th century.

In reforming the electricity industry in the province, we must keep an eye on our basic principles.

1. The entrepreneurial private sector must be the main engine of growth in a globally competitive economy.
2. The provincial government must regulate the industry to support economically and environmentally sustainable development.
3. At the same time, the provincial government must ensure that the people of the province – the resource owners – get their fair return at the lowest possible level of risk.

With those three elements in mind, let us now turn to some specific actions.

Privatize


While there may have been an argument in favour of nationalising the provincial electricity companies 40 years ago, those rationales have long since vanished.  Even some of the politicians who created the hydro corporation in the mid-1970s now think it was a bad idea. And if privatizing a Crown hydro corporation is a good policy for a former Parti Quebecois activist, the idea is well worth considering in this province.

Privatizing the provincial government’s energy corporation remains the best way to reform the provincial electricity industry almost two decades after a provincial government first pursued the idea.  Turning the corporation over to the private sector would net the provincial government significant cash while at the same time removing a huge debt from public shoulders. 

In the past 20 years public attitudes have changed.  A renewed sense of confidence in the public would support the creation – in effect – of several new corporations doing business within the province and expanding outside its borders.

The provincial government will need a plan on how to privatise the electricity corporations. They could entirely in the private sector from the start.  The provincial government could sell shares or accept offers – as Danny Williams was ready to do – for any or all of the company and its assets. 

Alternately, the provincial government could create Norwegian-style hybrid companies that are jointly own by the state and private share-holders. The public interest in hybrids would be managed through a parliamentary oversight committee similar to the type used in Norway and elsewhere to remove Crown corporations from decisions that may be based on too many partisan considerations.

In either approach, the new companies must be incorporated under the Corporations Act* and subject to exactly the same laws and taxes as all other companies in the province.

Embrace Competition


No matter what route the provincial government choses to take on privatization, it must sell off the generation assets seized from private sector companies in the 2008 expropriation legislation. This will be an important first step in smashing the dangerous monopoly created under the 2007 energy plan.  It will also send a powerful message to investors that the provincial government will not tolerate such grotesque abuses of power.

Reform would also mean replacing the provincial energy corporation’s  tangled mass of interlocking directorates and companies with clearly defined companies that look after electricity transmission (TransCo) and generation (GenCo).  GenCo could be also subdivided into the island generation assets and those in Labrador.

Churchill Falls (Labrador) Corporation should remain a separate company and possibly would be retained as a Crown corporation as proposed in 1994. The provincial government should move quickly to repeal legislation that supports the Lower Churchill Corporation, including the 1978 development corporation act.

In the future any Lower Churchill development should be undertaken by the private sector, based on sound financial plans.

For TransCo, the provincial government will also have to set an open access transmission tariff or give the public utilities direction to do so. OATT allows open access to transmission facilities. It is part of the competitive system fostered by American regulatory changes in the early 1990s. This is an important part of connecting the province into the North American electricity market system fairly and equitably.

Protect the Public


The 1994 version of the Electrical Power Control Act created a role for the public utilities board in managing the electricity industry in the province.  The provincial government should repeal a series of exemptions granted in late 2000 that effectively stripped the PUB of its power to ensure that the people of the province benefit from the electricity they need at the lowest possible cost, as mandated by the EPCA, 1994.

As part of the reform, the PUB leadership must be removed from the realm of political pork and patronage.  New commissioners should be appointed from the winners of an international competition.  Funding for an expanded commission that we will need to carry out the PUB’s new role should come from a combination of public funds and levies on the regulated industries.

The PUB’s first task will be assessing the province’s energy needs for the future.  This will determine what, if any new power sources might be needed.  The PUB can then re-allocate existing generation to meet the forecast need or call for new projects.

Set the Taxes and the Policies


In the new world, the provincial government will have a new role.  At first, politicians and bureaucrats will have to get used to a new role instead of involved in all sorts of high-powered negotiations for which they have usually turned out to be uncomfortably unsuited.

The provincial government will have to set broad electricity policy to deal with environmental issues:  how much of the province’s domestic supply should be from renewable sources?  Should the province allow natural gas generation?  What about nuclear power?

The provincial government will also have to set taxes and other charges that generators, transmitters and domestic retailers will have to pay to the people of the province in exchange for developing electricity resources. This could turn out to be an interesting new source of provincial government cash. There’s another post coming on that aspect.

The government would also have to set the broad rules that the public utilities board would follow when setting retail prices within the province.

Taken altogether, these reforms to the provincial electricity industry would:

• Reduce the public debt load.
• Produce an initial pot of cash for the provincial government from sales.  This would be followed by new annual revenue from taxes and other charges that the provincial government currently doesn’t collect.
• Promote sustainable development of new energy sources at the lowest cost for domestic consumers.
• Create a stable environment in which entrepreneurs can attract investment in order to develop the province’s full energy potential.

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* Corrected from Companies Act

PEI to study electricity supply

The Government of Prince Edward Island has appointed a five member commission to examine the province’s energy supply and pricing.

The commission — which includes Mike O'Brien, David Arsenault, Roger King, Gerald Morneau and Richard Hassard — will spend the next year looking at the future of P.E.I.'s electricity costs.

The province has some of the highest electricity rates in the country. Most of the power is purchased from outside resources — largely New Brunswick.

One potential source for the island is electricity from Muskrat Falls.

Speaking at a conference in Halifax on Tuesday, Bill Marshall, New Brunswick’s former electricity grid regulator said that Muskrat Falls could provide the Maritimes with a source of power cheaper than imports from New England.  It could also allow the region to shut down environmentally dirty thermal plants.

What Marshall didn’t say is that this is only possible because Nalcor and the provincial government plan to sell Muskrat Falls power to consumers outside Newfoundland and Labrador below the cost of producing electricity at Muskrat Falls. Consumers inside the province will pay the full cost of production plus guaranteed profits to Nalcor, Emera and Newfoundland Power.

According to Premier Kathy Dunderdale, Muskrat Falls power will cost 14.3 cents per kilowatt hour to produce, assuming the project meets all current cost projections.  That’s about four times the current wholesale cost of electricity in Ontario.

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Reductio ad argentum: senatorial elections version

With the Conservatives who have been running the province since 2003, everything reduces to cash. 

For them, the only principle is cash.

Not surprisingly, when it comes to the idea of electing senators to represent the people of Newfoundland and Labrador in the national parliament, Premier Kathy Dunderdale said this:

Mr. Speaker, there are still a lot of questions that need to be answered. For example, who is going to fund it? Who is going to pay for it? Mr. Speaker, when we get the answers to those questions, then we will say whether or not we are in favour of elected senators.

Yes, whether or not Kathy supports democracy comes down to how much it might cost.

Come to think of the past seven or so years, this does explain a lot.

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No more give-aways indeed: Big Oil’s L’il Buddy considering cash breaks for major oil companies

According to the cover story in the latest issue of Natural Resources magazine, the provincial government and representatives of the major oil companies are reviewing ways to increase exploration offshore.

Operators are presenting the government with a “suite” of proposals, according to [industry representative Paul] Barnes — many of them involving fiscal incentives, such as tax credits or royalty relief, that could spur increased exploration. 

Barnes is quoted as saying that the talks are “high-level” likely meaning they involve the Premier and other senior cabinet ministers. The 2007 energy plan included a recommendation to establish a working group involving industry and the provincial government to develop “regulatory and fiscal measures” to promote exploration as well as what the document refers to as “other industry needs.”

One idea reportedly under consideration is a royalty break for dry exploration wells.

For example, companies already producing in the area may favour some type of incentive that’s royalty based. If they drill a well and come up dry, they could get royalty relief on current production. “If there’s some risk offset, that may encourage some additional exploration activity,” Barnes noted. He said there are similar royalty-relief holidays for deepwater exploration in the Gulf of Mexico, to help mitigate the cost of unsuccessful wells.

That’s a significant switch from earlier Conservative positions but it is consistent with what the Conservatives have done since they took office.

For example, before 2003, when oil prices were below US$30 a barrel, Danny Williams attacked any suggestion that the Hebron partners might need a flat one percent oil royalty in the early years of any Hebron project.  Once in office, when oil prices tripled, he agreed to just just a windfall for the oil companies. The provincial government will lose hundreds of millions of dollars as a result, if oil prices remain above US$35 a barrel. 

Other issues for the industry include continued uncertainty about the province’s oil royalty regime.  The 2007 energy plan committed to scrap the existing one and replace it with a new approach.  Four years later there’s no sign of work being done, let alone any progress.

In natural gas, the provincial government still doesn’t have a royalty regime.  That’s despite the fact work on the rules started in 1997 and the 2007 energy plan outlined a draft royalty policy.

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What it means to be an energy warehouse

Governors of New England states come to visit you looking for more juice.  In this case, Vermont’s top political leader took a two-day trip to Quebec to discuss power and transportation.  Governor Peter Shumlin wants to route a New York to Montreal high speed rail line through Vermont.  He also discussed electricity and natural gas pipelines.

"Everyone's trying to sell us power," Shumlin said. The New England market has excess generating capacity, and Vermont utilities have been approached with several offers, he said.

"It's a buyer's market," Shumlin said.

Let’s get that Muskrat Falls in production soon to take advantage of that buyer’s market.

Yeah.

Right.

So when are Pete and his buddies making a pilgrimage to sit at Kathy Dunderdale’s feet?

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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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Hydro: different province, same political problem, same political solution

The province is different  - Ontario, this time – but the raw politics underneath a pledge to cut electricity rates for all homeowners is pretty plain to see.

The government has already rolled out tax measures for residents of Northern Ontario as well as seniors to give them a break on their hydro bills. But amid worries that hydro rates will become an election issue, the government is under pressure to introduce measures covering a broader group of Ontarians.

Speculation was rampant throughout the energy industry that the government plans to tackle hydro rates. But energy sources said an across-the-board rate freeze is unlikely. Such a move would leave the Liberals in the unenviable position of following former Progressive Conservative premier Ernie Eves, who froze household and small-business electricity rates in 2002. A McGuinty government rate freeze would repudiate its assertions made in 2004 that consumers would have to pay the real cost of electricity, said energy consultant Tom Adams.

Freezing or cutting energy rates is pretty much the stock vote-buying method found in several provinces, including Newfoundland and Labrador. 

And the arguments tossed out by the local New Democrats and the province’s Reform-based Conservatives are still energy policy bollocks.

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The politics of energy subsidies

From the Atlantic Institute for Market Studies comes a timely rejoinder to the policy in Prince Edward Island of subsidising energy prices out of tax dollars. The arguments in this post refer to the New Democratic Party policy of taxing tax off home heating prices but the concept is the same. The piece is also a timely one for Newfoundland and Labrador where Lorraine Michael recently embraced the policy.  

The argument against the policy of cutting home heating taxes is simple:

It gave people with more than sufficient ability to pay a subsidy they did not need. It encouraged continued consumption at unsustainable levels and it helped the poor not by treating the problem (inefficient homes and too much consumption), but by treating the symptom (high electricity bills).

In Newfoundland and Labrador one suspects that political parties eager – or desperate – for votes in the coming year will lay this sort of policy on thickly to try and buy them up. 

The ruling Conservatives, despite their supposed reform-based Conservative philosophy, are already trying to sell a future deal on the Lower Churchill as a guarantee of stable prices. They don’t talk about the huge subsidies the thing may well involve or that the whole thing will add enormously to the public debt. Incidentally, the likely reason the Premier has stopped referring to loan guarantees as loan guarantees is that he is acutely aware that any Lower Churchill project as he has proposed it will – inevitably – demolish once and for all any claims about the current Conservative administration’s performance in controlling the public debt and deficit.

It’s all bollocks of course.  Energy prices in the province will stay stable anyways without the Lower Churchill.  NALCOR’s own energy demand forecasts don’t support any such megaproject to supply juice to the island portion of the province.  And with a bit of conservation and efficiency, what increased demand there is could go down.

That’s one of the reasons why this AIMS article is interesting:  it specifically points to conservation as an economically sound policy:

the need for some electricity does not undermine the basic math that it is still cheaper and more efficient and, long term, more sustainable to reduce consumption.

At the same time, providing subsidies to allow everyone, but especially low and fixed income Newfoundlanders and Labradorians, to improve the energy efficiency of their homes would treat the problem of high heating bills rather than the symptom.  At the same time, leaving the prices to reflect the cost of production would promote conservation and efficiency.  The whole idea is progressive socially in addition to being economically and ecologically sound.  It beggars the imagination to figure out why political parties would head down a road of subsidies they know is simply  unsustainable.

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Time to retire the old schtick

On a certain level, you can’t blame Danny Williams for saying the same stuff over and over.

After all, audiences like today’s gathering at the Board of Trade keep lapping it up.  They turned out in force, chuckling and applauding in all the right places as if they knew the script by heart.

As the scrum video shows, local reporters from the province’s two television networks never tire of asking him the same old questions over and over, getting the same old answers over and over,  and then passing them yet again to the audience at home as if they heard it for the first time.  

But while some people never seem to tire of re-runs, there are likely an ever-increasing number of people in the province for whom the province’s political news is starting to look like watching some borscht-belt comedian on a 1970s American talk show.  Decades ago, the guy had one joke that sort of worked, yet the host thinks the old codger is a comedic genius.  So he flies the guy back from Florida to inflict him on his audience over and over again.  In the two channel universe of the 1970s or even the 13 channel cable world of the 1980s, audiences didn’t really have much choice.

Just to make sure you have a clear picture in your head, though, think Bobby Bittman from The Sammy Maudlin Show.

Then think of a parody of Bobby Bittman on The Sammy Maudlin Show.

Now you are getting close to the reality that is Wednesday’s vintage Danny Williams speech.  Take an endless recitation of how much money government spent on this that or the other.  Rattle off supposed triumphs. Talk of a new attitude of “confidence, courage, maturity and integrity”. Cliches and pat phrases interspersed with random quotations from Bartlett’s.  As formulaic as The Ropers.

The result is jarring even beyond the idea that merely spending increasing amounts of cash is the only measure of success, that running massive deficits displays “fiscal discipline” or that calling Bank of Canada Governor Mark Carney “a very powerful individual” is not trite.  With all the bravado and self-praise thrown liberally around as well, one has a speech that reeks of insecurity, fear, and childishness.

For Newfoundlanders and Labradorians, the speech was surely embarrassing. What else could it be when anyone  - let alone the Premier of a province – speaks of noble virtues, promises to “take no prisoners” in a political war with Quebec over the Lower Churchill, then immediately afterward quotes Mohandas Ghandi and yet remains completely oblivious to the stupidity of doing so in such a context.

On one level no one could blame any politician for doing what appears to work politically, but on another level,  the Premier’s performance at the Board of Trade was also a sign of an administration that has – to put it plainly - run out of ideas.

That lack of ideas is hurting the province.  The Premier has neither the markets nor the money to erect his $14 billion wet dream.  If he did, then Danny Williams would be building it instead of talking about it.  In the meantime, his obsession blocks out any development of wind or other energy power in the meantime.  That – as strange as it seems – is the government’s energy policy.

What’s more, the opportunity that does exist south of the border is being squandered in imaginary political squabbles.  Neil Leblanc just finished his appointment as Canadian consul in Boston.  As he noted in a recent interview, the northeastern United States is a ripe a lucrative market. 

But, Leblanc noted, it is not good enough for Canadians to say simply that we are here so “Come buy from us”.  In other words, it is not enough to say we have the most phantasmagoric undeveloped green energy planet in all Creation.  Canadian provinces cannot sit and wait for business to fall into their laps. The New England states themselves are also building new energy sources.  Other American states are already building new generation and transmission facilities to supply the eastern seaboard.

"There is time for the Atlantic provinces and Quebec to put their best foot forward. We have a lot of natural resources here, which we can hopefully take advantage of," he said. "It's a win-win situation if we can do it."

It could be a win-win situation.

Unfortunately, as long as Danny Williams uses the same speech over and over again, the best foot is not going forward. 

Far from it.

It’s time for the old schtick to retire.

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Related: 

• Bury my lede at Muskrat Falls
• The Old Man, Old Habits and Old Chestnuts
• Reach for the Screech
• Five years of secret talks on Lower Churchill;  the Dunderdale audio

Statoil explores renewables

Norwegian energy company Statoil is expanding its interest in renewable energy.

The company plans to develop the world’s first floating offshore wind farm.  Possible sites include one off Maine, two off Scotland or another off Norway.

Statoil has other offshore wind farms already in development.

Meanwhile, in Newfoundland and Labrador, the provincial government is focusing its energy future on eventually developing a $15.5 billion hydroelectric megaproject.  According to the 2007 energy policy, everything else is on hold until the future of the Lower Churchill wet dream is settled.

Unfortunately, the future of the Lower Churchill, a.k.a. the Great White Whale, is also up in the air indefinitely.

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The Old Man, Old Habits and Old Chestnuts

labradore lays bare the foolishness that is the Old Man’s latest anti-Quebec tirade.

Score one for His Premierness’s crack research and intelligence team; after all it was just three weeks ago that Quebec’s intergovernmental affairs Minister — unlike some provinces, they actually have one — telegraphed his province’s opposition to federal subsidies for transmission lines.

…

Curiously, these nefarious Quebec plots seem to cycle at about three-month intervals; His Premierosity exposed the previous one back on May 12th.

And yes, ladies and gentleman, the last time the Old Man got in a back-risking lather was during the month his pollster was in the field collecting numbers.

Funny how that happens.

Regular readers of these scribbles will recall that the Premier’s foray into the anti-Quebec realm prompted this rather neat diagram of The World as the Old Man Sees It.  Thousands of you read it, no doubt laughed and – in a great many cases- downloaded it as the wallpaper for your computer desktop.

Perhaps it’s time to get some tee shirts made up. They’d go like hotcakes.

Levity to one side – and it is hard not to snort at this same old story being recycled yet again -  your humble e-scribbler would be remiss if there were not reminders of the following salient points:

1. There is no Lower Churchill project the power from which would presumably course down these currently non-existent but hopefully federally-funded transmission lines.  NALCOR has no customers and doesn’t have the $14 or so billion the thing will cost.
2. Not so very long ago, Danny Williams was working feverishly to get Hydro Quebec to take an ownership stake in the Lower Churchill, with no redress for the Churchill Falls contract included.  This would be – of course – completely contrary to his pre-2005 comments/commitments on the subject.  This is the biggest story of 2009, if not the entire Williams administration to date.  It remains one story that the conventional media in the province have steadfastly – and one must say now very deliberately – refused to mention for almost a full year. They have determined it is an “un-story” despite the evidence from natural resources minister Kathy Dunderdale’s own mouth.
3. There is no Lower Churchill project.
4. Your humble e-scribbler first discussed the whole idea of the permanent campaign and the quarterly poll goose in a series of posts in 2006.  There’s “The ‘Danny’ Brand”, “Playing the numbers”, “The media and the message” and “The perils of polling.”
5. There is no Lower Churchill project.
6. The bit from the CBC story after “particularly”  is false:  “Williams has had a tempestuous relationship with Quebec officials, particularly after regulators in Quebec in May dismissed Nalcor's bid to move power to U.S. markets on Quebec's transmission system.”  The Regie d’energie did no such thing. Anyone who read the decision in English or French would know that. Your humble e-scribbler’s challenge from May remains unanswered.
7. There is no Lower Churchill project.
8. This bit is absolutely true:  “when we have a situation when one province is deliberately trying to thwart at least two other provinces, and indirectly affect four other provinces, that's sad."  And the Old Man should know since the last time it happened, he did it.

- srbp -

A summer like no other: torquing in Technicolor on the cheap

One of the great things about summer for perpetual campaigning is that cabinet ministers can spit out sheer nonsense and reporters for the local paper won’t even bother to ask pesky questions.

Like how will an imaginary project could ever  lower carbon emissions in the real world.

And in this bucolic world, where minister’s publicists apparently don’t have to pitch a puff piece, even one of the most incompetent of ministers can sound like she knows something.

The result is better than the stuff pumped out by the official government publicity system:  in this case, the reporter’s name goes on the piece and it appears in a local newspaper. Having gone through a supposed editorial review, the resulting piece suddenly has way more credibility than it actually deserves.

Charlene Johnson – arguably the second biggest bumbler in the current provincial administration  - recently got the chance to dazzle readers of the Western Star with her thoughts on how the province has an opportunity to lead the world in tackling global warming.

“There are opportunities to use energy more efficiently, displace fossil-fuel based power generated by Holyrood with renewable energy from Lower Churchill, and ensure we continue to manage our land and forests in ways that store greenhouse gases rather than release them to the atmosphere,” Johnson said.

If Johnson knew something more than her briefing books or was willing to speak frankly, she’d acknowledge a couple of relevant points here.

The most obvious is that the Lower Churchill doesn’t exist and likely won’t exist within the next decade or two.  As such, any ideas about reducing emissions from Holyrood using the Lower Churchill is just pure bullshit.

Second, the government’s energy plan places economic benefits ahead of environmental ones.  It isn’t about sustainable development or reducing the province’s greenhouse gas emissions.  It isn’t an energy plan or environmental plan as much as it is a business plan.

Everything is held hostage to the LC anyway, but the project talks about ways of building new energy generation for export.  It doesn’t address local needs at all.  If it did, the plan would set policies that encouraged energy conservation on the island and the development of new generation that has a low environmental impact. 

You can see this rejection of local needs in the Lower Churchill environmental review documents, for example. The first thing that strikes you is that the LC isn’t needed to meet current or anticipated energy needs on the island. 

Those demands are so minor that a combined program of conservation (including improved efficiency) coupled with new generation (more than 54 MWs of wind) would meet any demand anticipated in the LC documents.  And just remember that document was drawn up in a world where all that hydro from Abitibi’s Grand Falls-Windsor operation was making jobs in central Newfoundland.

As for Labrador, the Lower Churchill documents plan to continue using diesel generation, despite the fact power lines for the Lower Churchill would pass right by some of the communities it plans to leave on diesel generation. As astonishing that seems, that is the project the province’s environment minister is holding out as a way of dealing with emissions in the province.

This is not a new idea, by the way.  The 2005 climate change action plan contains the same fundamental bias in favour of large, expensive megaprojects.  It anything but a modest development of wind energy because wind is supposedly intermittent.  However, experience elsewhere shows that wind can deliver consistent power levels if a series of projects over a wide area are joined together and managed effectively.

There are opportunities for Newfoundland and Labrador in the fight against global warming.  The problem is that the provincial government policy rejects ideas that could take advantage of those opportunities or puts obstacles in their way.

Anyone can see the fundamental problems in the provincial government’s policy – it doesn’t actually have a sustainable development act or a green energy policy, for example – if one had the time or took the time to read.

Fortunately for Charlene, the crowd at the Western Star didn’t have the time to get ready for her.  As a result she gets to spout complete bullshit and have the Star present as if it were gold.

What better way for a bumbling minister top spend August than torquing in Technicolor on the cheap.

- srbp -

NALCOR: the power of constipation

Supposedly all we need is to know that the provincial government’s energy corporation, d.b.a. NALCOR, is “aligned” and will take all the time it needs in order to arrive at a “quality decision” on whether or not to install emission control equipment on its diesel generating plant at Holyrood.

For now, let’s leave three things out of this discussion.

First, this isn’t the place to rehash the nonsense which is NALCOR’s two, inherently contradictory position on Holyrood.

Second, and related to that, let’s not draw too much attention to the fact that NALCOR chief executive Ed Martin’s proposed solution to the $600 million cost of cleaning up Holyrood’s act is a multi-billion dollar pair of hydroelectric dams in Labrador and a giant set of power lines, the lines by themselves estimated to cost more than three times the scrubber cost, that will stretch out to the Avalon.

And third, let’s not note that NALCOR’s own capital plant maintains that Holyrood will have to continue running for the next two decades at at least one quarter to one third its capacity.  In other words, it won’t be shutting down at all.  As such, NALCOR will have to spend the $600 million or so in order to reduce noxious emissions from the plant regardless of whether the Great White Whale gets built or not.

Why Ed Martin and his boss, the Old Man, continue to pack around about this and bullshit the people of the province is beyond rational comprehension.

Instead of that, let us focus Martin’s suggestion that maybe some new types of generation might allow NALCOR the dirty power at Holyrood with some nice clean stuff. That might be cheaper, sez Martin than the environmental cleaners.

For starters, Martin is already sitting on juice to help replace Holyrood.  He got it as a gift from Danny in December 2008.  The only problem – apparently  - is that the interconnection between the Avalon and the rest of the island cannot carry the whole load. 

NALCOR needs some cash to make things happen. NALCOR has the cash, of course, or the capacity to borrow it, thanks to some generous gifts of public money  - yours and mine – courtesy of the Old Man and his crowd. The company is in a nifty position, frankly, since they get to play at being an oil company without having to pay all the costs.  NALCOR won’t pay the owners of the resource  - you and me - a penny in royalty for the oil we’ve given then.  We get the liability and the cost.  Martin and his crowd get the cash.

Pretty sweet deal, if anyone is asking.  And frankly, given the generosity of the current administration with resources and cash – yours and mine - it wouldn’t be too much if you and me expected Martin to install the cleansers and the new line most ricky tick.  He can spare us the bullshit and just get on with the job.

But it is when Martin mentions wind energy that he turns from a purveyor of  annoying bullshit to profound disingenuousness.

As Martin knows, this province has the smallest amount of wind power installed or under development of any province in the country.  It is a mere 54 megawatts in two sites. Tiny Prince Edward Island has more than twice that already on the go.  In short, this province, the one the Old Man and his retinue proclaim as a current and future energy warehouse is so far back in the field that it is not even close to being able to see the far distant ass the of the last place contender for the Crown.

There are two reasons for that.  Assuming that Martin read the Lower Churchill environmental applications he already knows that there is actually no reason to build the LC if the main reason is shipping power to St. John’s.  There’s really no need for additional generating capacity and, as it stands, NALCOR can now reduce Holyrood to virtually nil capacity.

As for the rest of the province, that is, the largest bit of it, the reason there are no wind farms under consideration is simply because NALCOR and the province don’t want them.  Official government policy subordinates any new generation, from small hydro to wind, to the Great White Whale project.

Put another way, innovation is dead as a doornail in Newfoundland and Labrador. The provincial government’s energy policy is working against the best interests of the people of the province.

Ed Martin’s comments to CBC recently could just as easily have been summarised with a parody of the old Mexican bandito line:  “Innovation?  We dun need no stinkin’ innovation.” Martin merely affirmed the power of constipation that afflicts the administration and its energy company, at least when it comes to innovation and energy.

- srbp -