The Danny Legacy Option for the Lower Churchill

As noted in the Bond Papers on Friday, the Premier held a news conference on Monday to update the province on the process to develop the Lower Churchill.

The government news release listed three comprehensive proposals to build the Gull Island and Muskrat Falls generating stations plus associated transmission facilities. These will now move to the second phase of the process, namely a feasibility study.

The three proposals are:

1. The Hydro Quebec/Ontario Energy Financing Company/SNC Lavalin proposal. One of the few proposals made public, this joint venture contained an option in which the joint venture would lease the Gull Island and Muskrat Falls sites for 50 years and a second in which Ontario and Hydro-Quebec would negotiate an agreement under which Ontario would purchase energy and Newfoundland and Labrador would finance construction.

This was widely held as being the likely strong proposal. The partners have extensive experience in the energy business, more than enough experience in the construction of large hydro-electric projects and the ability to raise all the capital needed to build the project.

This project also included construction of improved transmission capacity between Ontario and Quebec.

The guaranteed, long-term purchase of power by both Ontario and Quebec would make it easy for the province to raise any capital to build the project under the second option.

Construction would begin in late 2006 with first power transmitted by 2011.

2. TransCanada Corporation. Nothing is known publicly of this proposal. The company operates several hydroelectric and other generating systems in the central part of the continent. The largest is a little more than 18% of the Lower Churchill's combined generating capacity.

Call this one a long shot.

3. Tshiaskueshish Group. This is a consortium comprising Macquarie North America, Ltd., Innu Development Limited Partnership, Peter Kiewit Sons Co. and Innu Kiewit Constructors.

Again, nothing is known about this proposal. The companies have considerable experience in large construction projects. Beyond that, there is nothing available publicly.

Given the the Innu component of this proposal and the stated need in the original call for proposals for aboriginal involvement, this might be a proposal that had a leg-up as a result. The Innu Kiewit website is a little out of date since it notes that Voisey's Bay construction has been delayed.

Then there is the stealth option, one that Premier Danny Williams included on his own.

That's the one which would see the provincial government and Newfoundland and Labrador Hydro build the whole Lower Churchill project by themselves. For want of a better name call it the PWG Caribou Company proposal.

There are several reasons the Premier is likely to give when this option is selected.

1. The PWG Caribou Company meets all the proposal call requirements:

- It cuts out the middle man thereby maximizing the cash return to the provincial government and Hydro.
- It allows the government to deal with the Innu land claim directly, as it would have to do anyway.
- It gives the provincial government total control over the local benefits.

2. The province can afford it. The proposal call listed the estimated cost of the project as being CDN$3.3 billion. With the $2.0 billion from the federal government, the province can almost pay off the whole thing by itself. Borrowing would be limited and with the right power purchase agreement, the remaining capital can be raised at reasonable costs. The various financing options allow the provincial government to find novel ways of finding money for the project.

3. We would develop our resources for ourselves. The Pink, White and Green Caribou Company is the ultimate expression of the "local power" wave the Premier created with his offshore revenue deal. The strongest argument he will offer for doing it ourselves is that we will have total control over everything and that every aspect of the project possible will be done locally.

Just remember that the whole thing hinges on the power purchase agreement or having steady markets in which to sell the power.

As for the rest of it, expect the province will do exactly as the Premier said today: Give first priority to the PWG Caribou option.

I'd expect he has already decided what to do with the offshore cash. He keeps telling us but no one wants to accept it. The rest of the process is all for show, or at least serves only to give the Premier the chance to pick over the very best ideas from a whole bunch of other proposals so he can then do the whole thing himself.

It's Danny Legacy Option.

I can hear the speech now:

"It is our water. It is our falls. It will be developed for our benefit. By our engineers and our architects and run by our Hydro company and our government with our oil revenue."

There's an old black-and-white film from the Upper Churchill the Premier can use to help get the speaking notes together.

It's the one we will see announced very shortly, with construction well underway by the time the Premier seeks re-election.

15, 000 tonnes of cod for local fishers: Baker column lost in sea of facts

Refuting claims by local lawyer and newspaper columnist Averrill (A.J.) Baker, Newfoundland and Labrador fishing interests landed almost 15, 000 metric tonnes of cod in the waters around the province in 2004, according to information obtained by The Sir Robert Bond Papers from the Department of Fisheries and Oceans [DFO].

This included a directed cod fishery and by-catch of cod incidental to fishing for other species.

According to Baker, "[a]ll those foreign countries will legally be allowed to catch 5,900 tons of cod this summer -– that'’s 12 million pounds of cod. Meanwhile, Newfoundlanders are not allowed to catch a single cod -– even to eat -– in those same fishing zones from that same cod stock."

In 2004, by-catch of cod by foreign vessels in Zones 3M and 3NO, all fishing outside Canada's 200 mile exclusive economic zone [EEZ] , amounted to 477 tonnes, far less than the 5, 900 tonnes estimated by Baker in her recent column. Additionally, Canadian vessels landed 430 tonnes of cod by-catch in those zones, but within the 200 mile EEZ.

Estimated by-catch of cod by foreign vessels in 2J3KL in 2003 was a mere 23 metric tonnes.

Baker's column contained numerous factual errors, according to information from DFO. The column claimed that "225t of cod will be caught by Russia as a bycatch for their hake quota". According to DFO, no Russian vessels are fishing hake in the NAFO regulatory area in 2005, despite having a quota. The Russians have no contracted any other fishing for that quota so there will be no by-catch of cod.

According to DFO, "Norway does not have a redfish or turbot quota. Iceland does not have a redfish or turbot quota. Cuba and Korea do not have vessels fishing redfish or turbot in the NAFO regulatory area [NRA]; nor do they charter their allocations. Therefore, there is no allowable by-catch for these countries on these fisheries."

As well, "European countries do not have a redfish quota in 3N as the 3LN redfish stock is under moratoria, so there is no directed fishery for this stock, " according to DFO. As a result, there is no allowable by-catch of cod.

The claim by Baker that American fishing interests will land 100 tonnes of cod by-catch is also suspect. The Americans prosecute a swordfish and tuna fishery outside the 200 mile EEZ and do not fish for groundfish. As such, there should be virtually no cod-by-catch.

NAFO quota tables and maps of the regulatory area may be found at the organization's website.

Government newser on Monday?

Some rumours swirling that government is planning a news conference on Monday to talk about the Lower Churchill.

Good way to get the heat of Ed Byrne when the paper machine breaks-down on Monday with Abitibi.

Friday? Must be Abitibi day [Update]

Here's a simple question natural resources minister Ed Byrne might answer:

Given:

Government is claiming Abitibi Consolidated wants to build a new 60 megawatt hydroelectric project to power the company's Stephenville operation. After construction of the project, Abitibi would own 75% of the project and the province (through Newfoundland and Labrador Hydro) would own 25%, even though Hydro had funded the whole thing.

Here's the way the government news release put it:

" * Abitibi and Newfoundland and Labrador Hydro would enter into a partnership to develop two projects on the Exploits River -– Red Indian Falls and Badger Chute, adding in excess of 60 MW of new power into the system;

* Newfoundland and Labrador Hydro, with the province'’s backing, would raise all the capital -– upwards of $300 million -– and finance the projects;

* The Abitibi-Hydro partnership would enter into a 30-year power purchase agreement to sell all the electricity output to Newfoundland and Labrador Hydro, and hence Hydro'’s customers;

* This “partnership” would have to provide upwards of $14 million annually to Abitibi, with no return to Hydro;

* Additionally, Abitibi requested $7 million a year for the five-year period leading up to the in-service of the two hydro developments;

* In total, a level of support of approximately $455 million;

* Furthermore, at the end of the 30-year agreement, Hydro would only own 25 per cent of the projects, while Abitibi would own 75 per cent, despite the fact that Hydro and its customers have covered the full cost of the development of the projects and the subsidies -– in other words, Hydro and its customers paid for the projects and assumed all the risks;

* And, just as important, Abitibi would not give government any commitment on the impact a power purchase agreement would have on its future operations in Stephenville and Grand Falls-Windsor.

Question:

Is that what Abitibi Consolidated actually proposed?

[Update: Chris O'Neill-Yates put the question to Ed Byrne on The Morning Show this morning. She asked if Abitibi ever offered to reimburse the province for the Hydro project.

Ed said no, they didn't.

Now, everyone remember that. Remember his simple reply: "No."

Just for the record, here is the exchange between Kel Parsons and Ed Byrne in the House of Assembly's resource committee May 20, 2004.

Note the parts I have highlighted.

"MR. PARSONS: Minister, on the Lower Churchill issue, have there been any discussions ongoing in recent months concerning the Lower Churchill or possibilities of doing something with the Lower Churchill?

MR. E. BYRNE: No, there have not been any in recent months. What we have essentially done is, as you are aware being part of the former government, out of the Newfoundland and Labrador Hydro there were x number of dollars set aside to deal with the negotiations that were ongoing that date back to 1998, and then the most recent developments or discussions. Since that time we have basically just continued to assess the viability of the project and options associated with it. There have been no discussions on the development of that project, only inside government."

This was the day BEFORE Minister Byrne signed a then-secret memorandum of understanding with Sino-Energy, a group with which he had apparently been discussing the Lower Churchill with since January 2004.

Mr. Byrne has been known to have memory lapses before. Pretty big ones, apparently. Big enough to slide a hydro project through.

My next step is to go back and double check with my sources on what they understood had been the Abitibi proposal.

This might get much more interesting.]

Damn-fool fishery - some facts [Second Revision]

In the relentless nonsense about the Damn-Fool Fishery, there is a story Jim Morgan has been pushing that there was suddenly a by-catch quota for cod introduced on the northeast coast.

Well, having learned through long experience that Morgan is seldom right about anything, I called the Department of Fisheries and Oceans [DFO] in St. John's and gathered the following factual information for your reference.

1. Cod By-catch: In fisheries management zones 2J3KL, fishermen with groundfish licenses are permitted a total by-catch of cod equaling 2, 000 pounds for the year. That's it. This policy has been in place for some time. It wasn't suddenly introduced in the past week or two.

When the blackback fishery was recently announced, fishermen were reminded that they could only catch cod to a maximum of 2, 000 pounds for all groundfish species fished for the year.

Jim Morgan was completely, utterly, totally and unmistakably WRONG when he claimed this was a new policy.

For fixed gear fishermen in 2J3KL last year (calendar 2004), the average total by-catch was a mere 500 pounds. That's only 25% of the maximum.

[Update: DFO corrected my figures in an e-mail received yesterday. The 500 figure should have been 500 tonnes total, not 500 pounds per fisherman. Apparently there were about 700 fixed-gear fishermen in the 2J3KL fishery which works out to an average of about 1428 pounds cod by-catch per fisherman. That's 71% of the total allowable by-catch, not the 25% previously reported.]

And there are supposedly lots of fish out there, bearing in mind that in Newfoundland, fish is a synonym for cod. Every other species of swimming thing is known by its name.

Only cod are fish.

[Update comment: The revised figure of 71% by-catch is significant, but it is still a long way from demonstrating that there is a large amount of cod out there or, in the case of Mr. Morgan's claims, it still doesn't make the by-catch a cod-fishery by another name.]


2. Total Recreational Fishery Licenses Sold (2001-2004)

These figures will tell you something.

In 2001, DFO introduced the license and tags system for the recreational cod fishery. The fishery covered all zones and was open from July until September. They sold 91, 000 licenses, each with 30 tags.

The next year, the fishery was in all zones and lasted for six weeks. They sold about 50, 000 licenses with 15 tags.

In the past two years, the recreational fishery took place in 3Ps only. About 9, 100 licenses were sold each year each with 15 tags.

For all the claims that there is a huge demand for a "cod for the table", and with the ease of travel in the province these days, only 10% of the crowd who took part in the recreational fishery in 2001 participated in 2004.

3. Recreational Fishery Landings

2J3KL

2001 - 1896 tonnes
2002 - 670 tonnes
2003 - No fishery
2004 - No fishery

3Ps

2001 - 456 tonnes
2002 - No figures
2003 - 152 tonnes
2004 - 156 tonnes.

Before anyone starts taking these numbers an arguing there could easily be a recreational fishery on the northeast coast, go back and look at the actual by-catch landings last year. It was only 500 pounds per license. If there were that many fish out there, that number should be pretty close to the maximum, wouldn't you think?

[Update: If I work the math correctly, here's what the cod landings look like in 3Ps in the recreational fishery last year.

There are about 150 tonnes of fish, give or take which works out to roughly 300, 000 pounds of cod. There were 136, 500 tags. If we allow that all those tags were used, then the average fish size was a little over two pounds. My math could be faulty, but that seems to be an awfully small fish. Even if only half the available tags were used, it still gives us a four pound cod. I have caught salmon bigger than that.

Most of the cod I saw in television coverage of the rec fishery this past weekend were small to the eye, so those calculations seem to be about right on. If proponents of the recreational fishery are catching small fish, I'd venture that we are not actually seeing healthy cod stocks by any measure.

Bear in mind that the best estimates by scientists are that the total biomass of northern cod is only about 170, 000 tonnes, including the stocks of so-called bay fish. Those who think those numbers are small haven't offered any estimates, let alone serious estimates, of how much fish they think might be out there. There shouldn't be a commercial fishery until the stocks are much healthier, like maybe 10 times the current estimated biomass. I don't think the best scientific estimates are that far off.

Perhaps if Jim Morgan and A.J. Baker offered some facts to back up their arguments, it would be easier to take them seriously. Until then, I'd just as soon we accepted that jigging a meal of cod that many of us used to enjoy as a privilege is something we cannot enjoy today.

I never want my grandchildren to be able to see a cod stuffed and mounted in a museum, the only way my children can see a Great Auk. I'd sooner give up my chance to have a feed I jigged myself so my children and grandchildren might one day see cod as I knew them not so long ago and as my grandfathers and great-grandfathers knew them.

If He gave me anything at all in this world, God gave me a responsibility to shepherd the resources of the Earth.

If only proponents of the damn-fool fishery talked more of their God-given responsibilities, rather than their supposedly God-given rights.

If only.]

[Update II: Express columnist and St. John's lawyer A.J. Baker's column this week comments on the offshore, foreign cod catch allocations within the 200 mile exclusive economic zone. Here's a link to the column as printed in The Southern Gazette, one of The Express' sister publications.

Ms. Baker lists all the cod by-catches available to countries with historic fishing rights offshore Newfoundland and Labrador and currently assigned through the Northwest Atlantic Fisheries Organization (NAFO).

She notes: "All those foreign countries will legally be allowed to catch 5,900 tons of cod this summer -– that'’s 12 million pounds of cod.

Meanwhile, Newfoundlanders are not allowed to catch a single cod -– even to eat -– in those same fishing zones from that same cod stock."

First, Ms. Baker is flat-out WRONG when she claims that Newfoundland and Labrador fishing interests cannot catch a single cod.

As reported previously on The Sir Robert Bond Papers, Newfoundland and Labrador fishing interests can catch cod incidental to the licensed fishery, exactly as foreign interests are allowed to do. Newfoundlanders and Labradorians can legally get a feed of cod for the table, even in 2J3KL, even if they can't jig the rounders themselves.

Second, since I do not have figures right now we don't know for sure how many Newfoundland and Labrador-based fishing interests can catch cod legally in the 2J3KL zone. My bet is the figures are quite a bit higher than the 700 tonnes those fixed-gear guys are allowed to take.

My next step is to contact DFO again and get some additional factual information to counteract the distortions and misrepresentations by Ms. Baker and others.

The point to this entire enterprise is simple: the proponents of the Damn-Fool Fishery and those, like Ms. Baker, who continually slag the federal government and foreigners are doing so on the basis of something other than facts.

If we don't base our resource management decisions on facts, we stand a much higher chance of making a grave error when it comes to fisheries management than if we just thought about things for a minute and didn't get carried away with whatever we heard from someone who heard it from someone who told us something we wanted to believe.

Given our sad history of fisheries mismanagement, I'd sooner err on the side of caution than take the word of people who seem to be plucking stuff out of thin air, or worse still, only giving selected bits of information.]

Up the Pond!

With any luck and a good weather forecast, Wednesday marks the annual St. John's Regatta.

The boat races held on Quidi Vidi [pronounced kiddy viddy] Lake are the oldest continuous sporting event in North America. The earliest record of organized, regulated boat races dates from 1826, but there is evidence of boat races being organized on an ad hoc basis as early as 1818.

Your humble e-scribe will be off to the races for an enjoyable summer day.

In the meantime, for those of you not from these parts, here is the link to the official website of the Royal St. John's Regatta.

Here's another site with an extensive collection of photographs. That one is maintained by Industry Canada.

The title of this post is a popular local name for the tune "Banks of Newfoundland", which is traditionally played at the start and finish of each race. In 1914, soldiers of the first contingent of what became the Royal Newfoundland Regiment camped near Quidi Vidi before sailing to England. They chose "The Banks" as their regimental march.

Given the possibility a google search will turn up a bunch of other tunes with the same name, here's a link to a RAM file of the march being played by the band of the First Battalion, The Royal Newfoundland Regiment. Here's the link to the page where that tune is located. Anyone wanting a copy of the compact disc can send me an e-mail. I'll make arrangements to get one.

Local lobster miracle

Out of New Brunswick comes a story about some lobster re-stocking program that worked very well.

That's all fine, but there is always the little known lobster management project at Eastport.

For a minimal effort, wild stocks are being well-managed and infractions have dropped to next to nothing.

It's worth checking out for a model that should be spreading to other areas of the province and other species.

What the heck is public relations?

In 1999, I headed up the public affairs section of the Department of National Defence task force in Newfoundland and Labrador that would co-ordinate any military assistance to the provincial government in the event of problems caused by the supposed Y2K flaw in some computer programs.

We planned and trained nationally, regionally and finally at the provincial level. The provincial exercise took place on a weekend in the fall of 1999. All key staff members spent the weekend running an operations centre exactly as we would if needed.

The daily routine began with the commander's daily briefing, usually at seven o'clock in the morning. All department heads gave a summary of the previous day's activities, forecast what was coming and highlighted any issues that might need the commander's personal attention.

After each such briefing, known informally as morning prayers, the department heads grabbed usually grabbed a quick breakfast before beginning their shift. That first morning, a couple of my colleagues separately took me to one side to ask a simple question: "Is that what you do?"

"Yes", I replied, at first not quite sure what was coming next. I had given the commander an overview of attitudes in the key audiences we would be dealing with: the federal and provincial governments, views of key politicians at both levels of government, the news media and specific reports, the public in affected areas, and internally among soldiers. Only after ensuring The Boss was thoroughly familiar with the situation did I give him what literally amounted to a 30 second discussion of my section's planned activities.

He didn't need more. In all the years I had worked for this individual, he had only wanted to focus on issues that might require his attention; he trusted the staff he had picked to run the show. The Boss wanted the lay of the land and any key ideas he'd need to put across. He wanted to have a good feel for specific people he would be dealing with. Everything else was ours to handle as department heads in co-operation with each other and with decision makers inside and outside our organization.

My whole briefing had taken only about 10 minutes.

As I looked at my colleagues, I slowly started to understand their question and their expressions of discovery. One of them, a professional with considerable experience throughout the Canadian Forces and the department including tours overseas on major operations, said he had never seen a briefing like it before from a public affairs officer.

He was used to public affairs (public relations) being all about dealing with news media. There were a certain number of media calls. We handled this many interviews. There is a news conference at such and such a time. The other stuff - the analysis - was a revelation to him.

His revelation was less a revelation to me as a reminder.

Most people don't understand what public relations is all about. They think it is just about dealing with news media. They think of it as publicity. They think it is linked to marketing.

It is all of that and more.

Public relations is the management function that plans, co-ordinates and executes communications efforts with people who are interested in what an organization is doing, in order to gain and maintain their support.

That'’s a definition I work with but there are others.

The Canadian Public Relations Society defines public relations as "the management function which evaluates public attitudes, identifies the policies and procedures of an individual or organization with the public interest, and plans and executes a program of action to earn public understanding and acceptance."

A lengthier definition holds that public relations "is the distinctive management function which:

- helps establish and maintain mutual lines of communication understanding, acceptance and co-operation between an organization and its publics;
- involves the management of problems and issues;
- defines and emphasizes the responsibility of management to serve the public interest;
- helps management to keep abreast of and to serve the public interest effectively, serving as an early warning system to help anticipate trends; and,
- uses research and sound, ethical communications as its practical tools."

Take either definition and you have a good idea of what a public relations professional does.

One could say that a public relations practitioner helps decide who says what to whom, where, when, why and how.

If you take a close look at those definitions a few simple ideas leap out.

First, communication is a two-way street. It involves sending a message and receiving one.

Second, public relations often involves change in some way. Sometimes an organization has to communicate about change, like closing a business. Sometimes, the change comes as feedback from disgruntled employees or voters.

Third, public relations connects an organization with the public interest. That isn't just the interest of the public as a politician or public servant might look at it. Sometimes it is public interest in the sense of the greater good, but public interest may mean the benefit of a particular group.

Interests may clash if there is more than one group, but the effective management of communication is supposed to help resolve those sorts of conflicts. Public relations involves establishing and maintaining "mutual lines of communication, understanding, acceptance and co-operation."

Look at these definitions of public relations and it seems like a late-night infomercial. That might not be as odd as it seems: public relations is about relationship management.

Next time, we'll look at some simple ideas that underpin effective public relations:

Reputation and credibility.

Goose Bay base saved by Liberals!

Bill Graham to start hot war with Denmark.

Facetious? Maybe. I've always said the easiest way to save Goose Bay in a way that would satisfy the local citizens/ committee (i.e. we won't lift a finger to do anything; Ottawa save us.) is to start a war or get us into one.

Well, the only thing out there on the northeast frontier is the Arctic part of a little country called Denmark.

So stop your bitching, Graham Letto.

Abitibi: forest and trees

International wood products company Abitibi Consolidated has given notice it intends to close its Stephenville operation and shut down one of its two paper making machines at the company's Grand Falls mill.

The provincial government reacted angrily to the announcement.

In a news release the provincial government discussed details of a proposal to supply electricity to the plants, a proposal that both Premier Danny Williams and natural resources minister Ed Byrne dismissed as being unjustifiable to the people of Newfoundland and Labrador.

The nub of the problem for Abitibi appears to be power costs and power supply. Newsprint manufacturing globally goes through ups and downs. North American operations are increasingly challenged by competition from plants in the developing world and China where operating costs are considerably lower.

The $300 million hydroelectrical proposal called for two new generators producing 60 megawatts. In addition to that development being paid for entirely by the Crown corporation Newfoundland and Labrador Hydro, Abitibi reportedly asked for a discount on power costs amounting to upwards of $14 million per year for a total of 30 years.

The provincial government's tally of the cost is $455 million representing the costs of the subsidy, plus the increased costs to electricity users to pay for the $300 million capital construction program.

While Premier Williams is threatening to revoke Abitibi's timber rights in the event the company carries out the plan to shut down a machine at Grand Falls, this is the hollowest of hollow threats. First, revoking the timber rights as laid out in Bill 27 would effectively close the Grand Falls mill. It is difficult to imagine a government deliberating shutting down a major economic engine in the province's economy under any circumstances. The threat contained in Bill 27, passed under the Grimes administration was nonsense when it was first uttered and it remains a nonsense.

Second, taking that action would leave the province liable to being sued by Abitibi for unfairly and arbitrarily penalizing the company for taking what are essentially normal operating decisions.

The government's goal here is clearly to keep the two mills operating. The company, meanwhile, is concerned to keep them operating as well, but at reduced costs.

A closer examination of the electricity scheme and public comments by government ministers suggests that the only major issue separating the two parties is the issue of who will own the hydro plants at the end of the 30 year agreement.

This is interesting on two counts. First, the issue is relatively small. Abitibi need have no interest in owning generating capacity if it does not own the mills the plants would service. If it does not have the capital to build its own generators, then its share of the new projects could be as simple.

Second, despite the protests to the contrary, it is only logical to conclude from comments by Minister Byrne and his colleagues that government would be willing to finance a new generation scheme and subsidize Abitibi's power. The costs, described as exorbitant, would therefore not be so burdensome after all.

Perhaps this becomes more clear if one looks closely at the cash involved and the options available.

The government's estimated cost of the project is $300 million. This represents the highest of three estimates of the cost for building two new hydroelectric projects. In the ordinary course, the hydro corporation would borrow the money and then pay for it through increased electricity rates. This is what Minister Byrne noted when he talked of a four percent rate increase for consumers and a two percent increase in rates for business.

Yet, the provincial government just received $2.0 billion in cash from Ottawa. Amortized over 30 years, the capital cost of the construction project is a mere $10 million. That works out to be far less than one year's interest on the offshore cash in one instance or, a paltry sum even if taken out of the offshore cash.

Bear in mind that the provincial government and its supporters maintain that the offshore deal is worth in excess of $10 billion.

Consider, as well, that the $300 million represents the high-end estimate. Were Hydro to contract the work to the private sector, then it might actually be brought in at a lower cost.

Government could easily gift the money to Hydro and not be out of pocket for much, if anything. In exchange for this one-time capital construction, the government secures the jobs in two communities, guarantees that the mills have secure power in the event Abitibi wishes to sell off its operations, and in the worst case has low cost power to supply businesses and consumers in the province if the paper mills shut. If no money is borrowed, there is no interest to be paid on the loans and hence no real need to raise electricity costs to end users. Cheap power attracts business.

Beyond that, the provincial government can also simply sell the power to Abitibi at a nominal rate. This amounts to an indirect subsidy to Abitibi - no cash actually changes hands - and reflects a variation on the sort of financial incentives companies often receive in order to set up a business here.

For those concerned about the long-term, it is simply a matter of inserting a clause that obliges both parties to renegotiate the price of electricity on a regular basis. This allows the province to increase electricity rates should the world-wide newsprint markets rebound. And it precludes Abitibi from subsidizing its global operations with savings in Newfoundland and Labrador.

As much as we may all decry such subsidies, the actual amount here is relatively modest on an annual basis. Even the government's own worst case estimate is that the subsidy amounts to $14 million per year. The total of $455 million is based on the deal operating for 30 years. If Abitibi closes it mill or mills before that the deal could cost much less.

Put that up against the 772 jobs at Abitibi in Stephenville and Grand Falls and the others in the two communities that depend on the mills. Put the annual cost of $14 million in subsidy against the 408, 000 metric tonnes of newsprint the mills produced in 2004 at a market value of about $225 million. Then think about the corporate and other taxes the company pays to the province.

All things considered, it is possible the provincial government is not as angry at Abitibi as it might seem. Abitibi may be pushing back at a government which was already playing hard ball at the negotiating table. Read between the lines of government's news release, add in a few other considerations and you get the sense the provincial government will be putting some new cash into Abitibi through reduced power rates.

The offshore cash can produce a lasting benefit if it is used properly. Is there a better use than securing over 700 jobs in the best case and in the worst case having low-cost power readily available for a new enterprise?

Westcott's take on the Damn-Fool Fishery

Our respective reasons may be different, but Express columnist Craig Westcott and I are in complete agreement that the food fishery is a damn-fool idea.

Westcott has covered fish issues for years. He knows what he is talking about.

He rightly points out that guys like Jigger Jim Morgan, the former provincial fisheries minister known for his acquaintance with illegal fishing, can rant and rave all they like. Their arrest for illegally taking a codfish is much less than the poor inshore fisherman who gets to lose his entire livelihood from jigging.

Here's the link to Craig's column, which hopefully will stay around for a while.

Here's my backlink to a post on fisheries matters in which I first used the phrase damn-fool fishery.

The Rooms' Renouf: resistance is futile

From the vacuous space known as The Rooms comes this suitable news release issued on Wednesday by board chairperson Dr. Priscilla Renouf. In its title, the release purports to have the chairperson respond " to statements made by former director [of the art gallery] and clarifies information regarding governance structure of The Rooms".

The former art gallery director made a number of accusations in a news conference he held on Tuesday. He was suddenly fired a few weeks ago, apparently because he objected to the plans to move some of his staff previously involved in efforts like outreach and shift them to other parts of the corporation, like marketing.

He also criticized Renouf and the board of directors who approved demolishing the well-established brand Art Gallery of Newfoundland and Labrador (AGNL) in favour of the pasty-sounding Provincial Art Gallery Division.

Incidentally, the name was changed since the gallery is headed by a director and in government a director can only head a division. Of course, the pedants of government could not merely consider the ranks and titles as being for administrative purposes. The word "division" must be in the title and the separate identity of the gallery assimilated within the parent cube.

In public relations, a response release normally makes some effort to rebut accusations if any have been made. After all, public relations is about communicating with people to gain and maintain support. It's about managing relationships and focuses on things like reputation and credibility instead of the highly transitory notion of image. One actually tries to say something meaningful, to explain what has occurred and give the reasons for it.

In this case, Renouf actually proves the accusations are right: The Rooms is in danger of becoming a gigantic black hole into which our history, culture and heritage is being sucked. There is the pointless repetition by Renouf of the corporation's mandate and the assurance that the board will work to achieve it. There is the matter-of-fact reference to the PAG without even a suggestion that giving a reason for the name change might be in order.

Apparently, we on the outside are not worthy of her efforts. She simply assumes that since the name is changed, we must all accept it. So it is written. So let it be done.

Other than that, the rest of the release is a collection of comments so devoid of any meaning that neither Orwell nor Kafka could have written a better parody of the soul-chilling banality of government.

The release concludes with this arrogant assessment: "The divisions of The Rooms - the provincial archives, art gallery and museum – will continue to enjoy unprecedented support from a broad public as we continue to reach out with a variety of dynamic public and educational programs."

I'd suggest Renouf get some public relations advice but I know I'd be wasting my breath.

Another offshore board opening for Wells

Sometimes when you go looking for information, you actually find something really curious.

As part of an interview your humble e-scribe did on Tuesday with CBC television, I made the point that if the Premier wanted Andy Wells on the Canada-Newfoundland and Labrador Offshore Petroleum Board, the easiest way to do it was to put Andy on one of the provincial seats.

Under the Atlantic Accord (1985), the board is made up of seven appointments, three from each of the federal and provincial governments and the chair who is appointed jointly by Ottawa and St. John's.

Here are the current Board members with their appointment noted in round brackets.

Chair: Vacant (Joint)

Member: Herb Clarke (Government of Canada)
Member: Lorne Spracklin (Government of Canada)
Member: Hal Stanley [former chair and chief executive officer] (Government of Canada)
Member: Joan Whelan (Government of Newfoundland and Labrador)
Member: Fred Way (Government of Newfoundland and Labrador)
Member: Vacant (Government of Newfoundland and Labrador)

Notice that last vacancy.

It's been open for a while and certainly since the Premier decided to call Paul Martin and float the idea of putting Andy Wells on the offshore board as chair and chief executive officer.

The question remains: why Andy as chair?

The premier says it part of fighting for greater benefits and that the existing candidates were too close to the oil industry.

Ok.

Well even if we allow for a minute that all of that was true, why does Andy have to sit in the chair and CEO job?

Andy Wells served very effectively as an excrement agitator when the Peckford administration appointed him as consumer representative to the public utilities board.

It seems logical to just put Andy into the empty provincial slot - which the feds can't veto - and let Andy be Andy. The Prem still gets to negotiate greater benefits, if he can, and the offshore board just carries on as the regulatory body it should be, headed by the excellent person selected by the eminently fair and open process that was already in place.

The answer to this question may never be known.

But since it is highly unlikely that Andy Wells could ever beat out the slate of highly qualified candidates already in the selection stream for the Big Job at the offshore board, Andy might just go off to sit in the empty provincial slot anyway, if the Premier feels like it.

It's a part-time job, so Andy could continue as Mayor. The Premier gets to have his boy stirring up the offshore board in a way only Andy could do.

Of course, if Wells does get the top job at the offshore board, will his view of The Narrows be blocked by the new eight story condo block being built on the site diagonally opposite from the board's offices?

The offshore board and benefits plans

Follow this link and you'll wind up at the federal implementation act for the Atlantic Accord. The provincial one is largely the same, but the federal one is actually easier to read and doesn't have a bunch of annoying shorthand in the official text, like using "1st" for first.

The Implementation Act

Scroll down to Section 45 and you'll find the bit that the powers held by the Canada-Newfoundland and Labrador Offshore Petroleum Board related to benefits plans. The language is pretty simple and plain.

Notice that under Section 45 (5), the board has to consult with both energy ministers to ensure the benefits plan submitted by a proponent meets the requirements of the federal and provincial implementation acts. What that means, in simple terms, is that there is no way for a development to proceed if one or both of the governments doesn't like the benefits plan.

Notice as well, though, that the act doesn't say that a fixed percentage of work has to come here, a set number of jobs have to be here or that any particular amount of work need actually be carried out in the province.

If you look closely at Section 45 (3)(d), local companies need only be given first consideration and then only if their goods and services and competitive in terms of fair market price, quality and delivery.

In Practice

In practice, benefits plans have been reviewed by the province and the federal government, even if in general terms, well before the entire development applications ever hits the offshore board. A smart operator would want to make sure that the development plan is a smooth as possible so they will invest energy before submitting the plan to make sure it meets the governments' requirements.

That's why it was the Premier and his energy minister of the time who were involved in the discussions with the Terra Nova about the possible transfer of engineering and procurement jobs to Newfoundland and Labrador. It wasn't the offshore board.

That's why it was Premier Williams who stated the province's terms for local benefits on the Hebron project.

Peter and Loyola missed the real security threats

Any visitor to St. John's knows that what Peter Mackay, DDS, is hopping over in this story from the CTV website is just a low barrier to keep vehicles from parking on the wharf, not a major barrier for threats.

There are several open gaps that allow vehicles to be driven right up to ships so they can unload cargo, people, food and fuel.

If Peter had anything serious observations to offer on port security, he'd have tried getting access to a major wharf complex, like Vancouver, Montreal or his own fave city, Halifax. The reason he didn't try anything like that is because:

a. his tight buns would be sitting in a local lock-up; and,
b. as a result, the photo-op wouldn't have been as...how do you say... appropriate for the point Peter was trying to make.

Of course, what Mackay is doing is called a stunt and it's what you do when you don't have anything of substance to say.

The thing is, Peter, your hopping over that little barrier (you could have walked around) doesn't reflect lax security; it reflects the low threat in St. John's as well as the obvious point that it is virtually impossible to "secure" the harbour apron without effectively closing down the harbour itself and half the downtown.

Heck, I'd go a step farther: pretty much anything on the south side of Water Street would have to be demolished including historic sites, major office complexes, and the building housing Provincial Court among others.

The buildings that remain would be facing a 10 foot-high concrete wall topped with razor wire and patrolled regularly by armed security guards and Alsatians. Kiss the downtown restaurants goodbye. As well, you'd have to figure out some way of blocking anyone with a view of the harbour since it would be easy to lob a rocket-propelled grenade from the upper floors of the TD Building or even the government's own office complex down onto the dockside.

You'd also have to expropriate the homes of people living at the Battery, and people living farther up Signal Hill. Forget ever seeing most of the Southside Hills or Fort Amherst again. All of that would have to be fenced and monitored so that terrorists could get in or out easily.

In another part of the TV report that sadly didn't make it to the web story was the bit where Peter and Loyola Hearn, the pretend member of St. John's South Mount Pearl, talk about the danger posed by the containers from around the world sitting at the Oceanex terminal.

Hey!

Guys!

Over here!

Reality Check: those containers had to pass through Montreal and/or Halifax before they go to the local terminal. That's where the big security issue is for containerized traffic. Go check out their security. Containers don't come to St. John's directly from unsecure foreign ports.

There are other security issues at St. John's Harbour Peter and Loyola could have talked about. But since Peter was too busy issuing nonsense releases like this one (Picture that Culkin kid from Home Alone when you see that Pete was "shocked") and Loyola knows squat about the riding he supposedly represents, neither of these guys bothered to address some real local public security issues.

Oh, and if you want to know about some real strategic targets in St. John's, some places that might just be likely security issues, I can point them out to any reporter who wants to take the tour with me.

The only condition is that you cannot broadcast where they are. After all, the Internet is a major source of intelligence for the bad guys.

The harbour isn't one of the sites.

And Peter Mackay, the supposed Connie security guru should know better than to identify St. John's as a weak spot in Canada's security system on the news media and the Internet.

If CSIS granted you a clearance, they should take it back.

Bonehead.

Public relations people take note

CBC journalist and blogger John Gushue recently offered a link to Contentious, a blog by Amy Gahran.

This post challenged people to think of a world without what Amy calls press releases.

With any luck and a modest level of effort, I can apply some of Amy's other advice about blogging and make my stuff sharper and more effective.

Old dogs can learn new tricks.

His Excellency Paul Soles

Ok.

To be honest I got this idea from one of the Liblogs but it was just such a flash of inspiration, I thought I'd make it your morning chuckle.

The serious stuff, like lampooning Loyola Hearn and Peter Mackay, DDS, will have to wait a bit.

Her Excellency the Governor General will soon be departing Rideau Hall.

The hunt is on for a replacement.

My pick is Paul Soles. Here's a link with a picture so you can see Paul has that Einstein thing going on.

Like Clarkson, Soles used to host Take 30, an afternoon chat show on the CEEB. At one point, Paul and Adrienne were co-hosts but she got the flick in favour of someone else.

Unlike Clarkson who became a bit of a social gadfly and pseudo-diplomat, Soles actually worked for a living.

He is an actor and since the 1950s has earned his living in everything from the old Wayne and Shuster Show (maybe it was funny in 1954 on the second go 'round) to Rocket Robin Hood and Spider-Man to This is the law. He also appeared in some other stuff, like moudly plays by some long-dead English guy. I think his name was Shakespeare.

Paul Soles.

Canadian Icon.

My nominee for Governor General.

Say hello to 40 bucks a turnip

Taking a leaf from the ongoing trend for promoting the most abysmal ideas in public policy proven ludicrous in other places, Federation of Agriculture head Merv Wiseman is calling on government to legislate a guaranteed minimum floor price for agricultural products.

Merv wants to implement Soviet agricultural policies in the 21st century. Way to go there buddy.

Where do I begin to explain to Comrade Commissar Wiseman the folly of his idea?

First of all, the Uruguay round of the General Agreement on tariffs and Trade is busily working to get rid of this sort of protectionism/marketing combines that do nothing but stick it to consumers.

Ask John Crosbie about protectionism like this. All it does is cause local consumers to pay through the nose, much like we do with gasoline prices thanks to people like Tovarische Doktor O'Keefe.

Since Wiseman admits that local agriculture covers only 10% of local demand, local farmers would actually be pumping more cash out of the province to mainland suppliers, if their floor price policy was applied fairly across the sector.

Second of all, Wiseman is making the call because of changes in the retail grocery business that have wiped out some of the local farmers' retail outlets - but farmers have done squat to help themselves.

Merv and his buddies need to explore what other small business have explored in the face of competition. Try going directly to the consumer at the farmers' market or through an outlet like the Lester's Market on Brookfield Road.

Wiseman acknowledges that his members are getting squeezed on prices by having these middlemen, yet at no point in the CBC story linked above does Comrade Merv think that maybe, just maybe the farmers should help themselves before asking me and the government to bail them out.

Wiseman in following in what is becoming a depressing local tradition. Everyone from Brian Dobbin to bits of the local oil industry (as in the Wells nomination) to the fisheries crowd (especially the Hunter/Gatherers Union) to the gas-price-fixers all seem to think that turning this place into a museum of stupid ideas that never worked anywhere else is somehow a good idea.

Oooh. Ooooh.

I've got a great idea. Why don't we run the entire province according to one giant central plan. We will have everything owned by the state and each month you can get your rations of everything. Ok, so the Soviet Union was a giant misery pit, but maybe things will be different here.

After all we are unique in Newfoundland.

Put another, less sarcastic way, some business operators and other people seem to think that it is the duty of government to prop them up at whatever cost to people like me and you.

Get a grip, Merv. I have much better things to do with public money, like helping people keep heat in their houses next winter, than coming up with some plan to fix the price of turnips.

Heck, Merv I can grow carrots, potatoes, turnip, parsnip, cabbage, beets and strawberries in my backyard for little more than the cost of my labour, as my parents do now and as my grandparents did for almost seventy years before that.

What will Merv want to do next, toss granny in the clink for breaking his strangle hold on local rhubarb production?

The political death of Andy Wells?

Federal natural resources minister John Efford is invoking the Atlantic Accord (1985) to send the job of picking a new chair for the Canada-Newfoundland and Labrador Offshore Petroleum Board [CNLOPB; the offshore board] to a panel of three persons.

Under Clause 5, the federal and provincial governments each appoint one panel member and these two in turn appoint the third person. If they fail to agree on a panel chair, the job of picking the third member goes to the Chief Justice of Newfoundland and Labrador, Clyde Wells.

No matter how the panel is constituted, the new process will look much like the one Danny Williams trashed a week ago when he proposed Andy Wells to head CNLOPB. The competitive process included representatives from both governments, chaired by Robertson-Surette's local senior consultant, Lloyd Powell.

The most logical panel would be one of the current federal and provincial representatives with Mr. Powell as the the chair. Mr. Powell is an experienced former public servant. There is nothing to disqualify him from chairing the Clause 5 panel, except specious political posturing. If the Chief Justice gets to pick the arbiter, one can be assured that the panel chair will be both eminently qualified and scrupulously fair.

It would logical to assume, as well, that the new panel will have to weigh Andy Wells against a group of other nominees, likely the ones already selected as a short-list as well as one or two additions.

It is highly doubtful that Mr. Wells will be the nominee. He just doesn't meet the qualifications, especially compared to respected professional geologist and former natural resources minister Rex Gibbons. Mr. Wells likely wouldn't even match some of the other likely nominees from the recently failed process.

For the Premier, this is his second failure on the offshore. His January offshore revenue deal fell far short of his stated goal in January 2004 both from the standpoint of the cash received and the policy objective he sought, namely ending Equalization clawbacks.

Now he has failed in his attempt to have Andy Wells, or anyone else, appointed to head CNLOPB by anything but a competitive process.

As for Mr. Wells, he has already given any credible challenger for the mayoralty strong ammunition with which to batter the otherwise unstoppable political force in municipal politics. Mr. Wells made it clear he would be happy to be rid of some of his fellow councillors as they would likely be happy to see the back of the mayor.

St. John's voters may now legitimately question Mr. Wells commitment to the city for another full term. If the Premier is suddenly so enamoured of the man he once worked desparately to oust, Mr. Williams may have another nice little job waiting for Andy.

In the matter of a week, Andy Wells has gone from being Mr. Invincible Incumbent to being a carbon copy of Brian Tobin in 1999. Any assurances from the incumbent mayor that he wants to keep his job and will serve a full term should be met with the skepticism born of the Tobin experience.

His opponents in the fall mayor's race, if Mr. Wells still runs, will have the mayor's own words to use as bludgeon. Expect to have the clips played over and over and over.

We may yet be seeing the political death of Andy Wells, the man Danny Williams couldn't defeat before.

Perhaps that was the real goal of Mr. William's offshore board play.

The gasoline regulation charade [revised]

One of the greatest public policy failures of the Grimes administration was the imposition on Newfoundlanders and Labradorians of the Petroleum Products Pricing Commission (PPPC).

The progeny of the old PPPC, now under the Board of Commissioners of Public Utilities (PUB) carries on the useless practice of appearing to interfere in the marketplace on behalf of consumers.

The PUB is now conducting a public consultation on the whole business of price regulation for petroleum products, i.e. gasoline and home heating oil. Here's the link to the discussion document.

Don't get too excited.

The PUB merely wants to hear about how the regulation should be conducted. So much for thinking outside the box by at least offering the chance for consumers to challenge the very idea of government regulation of petroleum prices.

Well, here is such a challenge.

The PPPC is a fraud.

In a normal world, gasoline prices are set by the marketplace. The consumer price is determined by costs (price of oil, processing costs, shipping costs, etc.) and demand. Prices in Newfoundland and Labrador vary across the province and differ from the price in other places in Canada based on all those factors.

It should come as no surprise that gasoline was cheaper in St. John's, for example, than it was elsewhere. The population is larger which means, among other things, that a retailer can make enough cash to sustain his or her business based on volume of sales. There are a bunch of different retailers and in the old days, before Roger Grimes created a sinecure for an old buddy, they used to watch each other like hawks to see where the price was going.

The price per litre went up and it went down, and not surprisingly because the cost of the raw material never dropped dramatically the price never dropped dramatically either. During the Gulf War in 1991, the prices skyrocketed based on international tensions. After the war was over the prices dropped significantly, as one would expect.

There were calls for price regulation but successive provincial governments came to the conclusion that in the modern economy, regulation was a charade. They rejected it.

Then along came Roger Grimes and his cabinet.

In 2001, they created the PPPC and set up George Saunders in an office in Grand Falls.

They studied oil and gas prices using the New York as a baseline. They set a benchmark year and price and then announced the maximum prices to be charged to consumers across 14 zones. That's system that continues today, with irregular changes based on nothing more than international changes in the price of oil.

In other words, Saunders and the PPPC spent a chunk of money (from the oil retail companies) to recreate a bureaucracy to do what the market was already doing. The PUB discussion document basically asks people to help them refine a set of formulae and rules and models that recreate what in just about every other part of North America is handled by competition in the marketplace.

Consumers in other places grouse about prices, and rightly so. That's a consumer's fundamental right.

But they also have the right to change their consumption, as prices rise. Drive less. Buy a smaller, more fuel-efficient vehicle. In the case of businesses, they can just pass on the added costs to consumers, as they used to do.

And what is the upshot of four years of gas regulation?

Today, I am paying $1.04 per litre for regular unleaded gasoline in St. John's. In Eastern Ontario, I can buy gasoline for almost 20 cents per litre less. On Saturday it was about $0.87 per litre in most places around Kingston.

My sharp-eyed father-in-law keeps close track of the prices and takes advantage of whatever savings he can. He drives less. He bought a more fuel-efficient car.

But, by my informal calculation, that's one of the largest gaps in pricing I have ever seen in the 15 to 20 years I have been commuting from St. John's to Kingston ever so often. Gas prices are actually going down around Kingston whereas in this province there have been only modest drops in price.

The reason is simple: in a world where retailers are told what to do they will always charge the maximum.

Always.

There is no incentive to drop prices and pass along any benefit to consumers.

And don't believe the malarky of the commissars who tell you that if it wasn't for the PPPC prices would be higher or that if the PPPC ran "better" it would prevent the prices from going up.

It's a crock.

Gas prices across Newfoundland and Labrador vary from place to place, based on a bunch of factors. Essentially as costs of production increase, so too do consumer prices.

Just like they used to in 2000 B.G./B.S. (Before Grimes/Before Saunders).

But they don't go down as much as they might in 2005 without the PPPC.

Rather than continue the PPC charade, I have a simple suggestion:

Scrap gas price regulation.

It serves no useful purpose. The situation that obtains today across the province is exactly the same one that would exist without the PPPC, except that we never see a reasonable break on price reductions that the market would deliver and has delivered elsewhere.

And so what if gas prices go up? I'd rather that people thought harder about the energy use and the only truly effective way to do that is to smack them in the wallet.

Some people, notably the self-appointed gasoline watchdogs have talked about freezing provincial taxes on gasoline. In his one note-worthy foray in the public since the House of Assembly closed, Liberal leader Gerry Reid suggested that the province's gas tax haul be frozen at around the $1.00 per litre mark.

As someone else noted, that doesn't do a damned thing to help people on low and fixed incomes. It just makes it easier on the guy with the gas-sucking truck so he can keep sucking gas.

It sure as hell doesn't change the provincial tax haul.

As the PUB document notes, the provincial government hauls in a flat 16.4 cents per litre regardless of the base price of the fuel. In addition, the province collects 15% harmonized sales tax (HST).

In other words, if Reid's idea were implemented, the provincial fuel tax would remain at 16 cents per litre so as long as gas is being sold, the provincial government doesn't give a damn what the retail price is.

As for the HST, the province could only change its application in agreement with the Government of Canada. It could happen. If it did, the province would still rake in over 20 cents [math correction] for every litre of gasoline it is selling...just like it is doing today.

Oh yes, and since the PPPC system keeps gasoline prices artificially high, the odds are against the price dropping below a buck a litre anytime soon.

Dumping the PPPC would at least get rid of a needless bureaucracy and open up the prospect consumers could see some understandable changes in gas prices both up and down. In the meantime, as prices increase, consumers who can actually make changes in their lifestyle could do so.

For those on low and fixed incomes, the provincial government has the option of putting in place a program aimed specifically at the people who can actually use some relief from high home heating costs. They can easily figure out who those people are and the province can afford it. After all, Loyola Sullivan is profiting from both the high price per barrel of our own offshore oil and the marvelous HST on a litre of refined gasoline and home heating fuel.

Would that a political party in the province had the courage to suggest just such a policy.

It would indeed be a New Approach.

Good riddance to bad ideas

Premier Danny Williams suggests that St. John'’s mayor Andy Wells should be the chairman of the board and chief executive officer of the Canada-Newfoundland and Labrador Offshore Petroleum Board [CNLOPB; the offshore board].

The Premier said that Mr. Wells nomination was part of an overall campaign to pressure the oil companies into providing Newfoundland and Labrador with a full and fair share of the benefits from offshore oil production.

Federal Conservative member of parliament Norm Doyle offered additional arguments for Mr. Wells'’ candidacy, more by way of implication than anything else.

The federal government has flatly rejected Mr. Wells, pointing out that another selection process is already underway to fill the job at CNLOPB and Mr. Wells is not on the list of applicants.

Theirs is a process argument: since the process is not completed, it would be unfair or unreasonable to inject another candidate for the job by another process. It is simple, neat and bureaucratic.

While process is as good a reason as any for rejecting both the candidate and proposition he came in on in this instance, the Premier'’s idea should be rejected for other reasons.

First, the Atlantic Accord (1985) [Accord] gives the provincial government responsibility for setting its own revenues and benefits. The Premier's proposal transfers that responsibility to an appointed board. This is unacceptable.

The Atlantic Accord establishes the overall responsibilities of the federal and provincial governments on the one hand and the Canada-Newfoundland and Labrador Offshore Petroleum Board on the other for the overall management of offshore oil and gas resources.

The offshore board administers "relevant provisions of the Atlantic Accord implementation acts and other legislation". [Accord, Clause 3]

The Accord reserves to the federal and provincial government the responsibility for setting overall policies through legislation, including the revenue and other benefits that should flow to the two governments from exploration and production in the offshore. [Accord, Clauses 21, 22, 24 and 25]

The Accord specifically provides that a development proposal may be approved by the offshore board but, if the proposal contains insufficient local benefits, then the provincial minister may overrule the offshore board and prevent an unsatisfactory development proposal from proceeding. [Clause 25]

The only significant reason the Premier has offered for proposing Andy Wells as chair and chief executive officer does not stand up to even the most simple reading of the Accord.

Second, the Wells nomination violates the basis on board members serve. The Atlantic Accord (1985) provides that the members may provide advice to both governments on changes to the Accord implementation legislation [Accord, Clause 10] and directs the board members will not as as nominees of the government which appointed them. In other words, the board members are to function as board members, not as proxies for either the provincial or federal governments. [Accord, Clause 12]

A more detailed reading of the 1985 agreement makes it clear that the board should not act as proxies for either government, thus making the Premier's own rationale for the Wells appointment a violation of the Accord. What else would Andy Wells be, except a proxy of a provincial government seeking increased local benefit from the offshore, when that is both Mr. Wells' stated goal and the Premier's objective in proposing Mr. Wells for the job?

Third, the Wells nomination, like so much of the Williams' administration policy manual is rooted in old ideas. As Mr. Wells noted in the most recent issue of The Independent, his understanding of offshore oil development issues is shaped by Cabot Martin. Some will recall that Mr. Martin was instrumental in developing provincial government oil policy in the 1970s and 1980s which led, ultimately to the twin disaster of the 1983 and 1984 Supreme Court decisions.

Beyond that, however, Mr. Martin's general approach to the offshore was the philosophy behind the Hibernia agreement. While Hibernia it served to start the local offshore oil production industry, the Hibernia agreement placed a higher premium on short-term job creation by forcing construction of a gravity-based structure than on the long-term financial benefit from the only way in which provincial government makes cash from non-renewable resources: its royalty regime.

The lasting local benefit from oil and gas will only come in the growth of a local industry which can compete globally, as occurred in Scotland. The Martin/Wells approach is focused exclusively on the short-term; experience demonstrates this clearly. Forcing a gravity-based structure would only have made sense at Hibernia if there was a competitive reason for using the same production mode not only in the four other oil fields offshore Newfoundland and Labrador but from other fields elsewhere in the world.

There was none and as a result the owners of the offshore resource - ordinary Newfoundlanders and Labradorians - continue to pay a hefty price for seven years of gravity-based makework.

By taking a different approach in the Terra Nova and White Rose fields, the provincial government ensured that it received maximum provincial revenues, while at the same time giving local industry the opportunity to develop much-needed experience in oil production projects.

That local business involvement might not be as great as if the provincial government had forced the companies to use local labour and suppliers in the short-term, but in the medium- and long-term, the cost of such an approach would have meant a reduction in provincial government revenues.

As it stands, Terra Nova will pay out this year and by September, the provincial government will reap even greater revenues than it currently does. The same will likely occur at White Rose in due course and with no demonstrable or irreparable costs to the provincial treasury or to the environment.

Imagine if another approach had been taken at Hibernia, by far the largest of the offshore fields. A project which currently will likely never achieve payout of start-up costs, could be producing ever greater revenues as the field's full potential is exploited. The attitude of the 1980s, exemplified by the Peckford administration of which Mr. Martin was a key part, was surely penny-wise and pound foolish.

For a place like Newfoundland and Labrador, without large local markets, the only way to sustainable prosperity lies in being competitive internationally. The strongest supporters of free-trade should be local businesses since we have proven time and again that we can compete against the very best in the world.

Yet, the very approach favoured by the Premier, apparently, and Mr. Wells is to demand local benefits rather than earning them. All we grow with such a policy is the kind of business that will wilt without the protection of Government the Mother Hen. We have already seen this corrosive approach from our pre-Confederation history.

Our own local preference policies in the modern day actually prevent local companies from gaining the long-term work since we support other places to be just as jealousy opposed to foreigners as we ourselves would be.

Less than a decade ago when Nova Scotia was flourishing and our offshore was stagnant, local companies were blocked from winning contracts in Nova Scotia. Worse still, even when they won the contracts in the Nova Scotia offshore, their costs were raised to the point where it made such work almost untenable.

Local protectionism may have looked good in the 1970s and 1980s when we had no practical experience of the oil business. All we had were the romantic promises of Brian Peckford and his lieutenant Cabot Martin. Now that we have experience, these outdated ideas should not be allowed come back. They should be banished when we know from experience that they actually keep us in the shackles of economic dependence rather than developing a strong, prosperous local industry.

If Mr Wells is truly the offspring of old ideas, then to put him at the helm of CNLOPB would be to take our fledgling oil industry back to an ideological past that we cannot afford. To be fair, it is not Mr. Wells per se that is the issue here. Rather, it is the very idea embodied in the Progressive Conservative Blue Book and, as best as we may guess, with current provincial policy.

I say as best we may guess since we do not actually know what provincial policy is. A royalty regime exists but apparently the Premier is intent on negotiating something else with companies looking to develop the last proven offshore oil field. We hear talk of a new oil refinery or petrochemical plant, presumably to process Hebron oil. A new refinery or processing plant isn't really linked to Hebron, except by implication but through all the recent public chatter, no one can say for certain what the Premier is up to. He has not told us.

When we think the Premier is about to negotiate, he pushes Andy Wells to head the offshore board, as if the offshore board is actually going to conduct the negotiations with Chevron. This may stir the political pot and push the Premier's opinion poll numbers, but, in truth, it does little to impress those familiar with the oil industry.

Through it all, we see a familiar pattern, not for Danny Williams but for other Premiers. Brian Peckford spun tales of future riches from oil as a diversion from other issues he could not or would not address. Peckford claimed the nationalist mantle. Brian Tobin blamed the offshore board for supposed short-comings in offshore benefits, in as good an effort as tossing the monkey onto someone else's back as local politics ever saw.

None of these tales, as popular as they are with editorialists and others, are based on fact.

Worse, they divert the public from things that ought to be talked about.

Today, those things would be a reform of the fishery, of building a genuinely competitive offshore industry, of spreading economic development around the province and deciding what to do with the economic prosperity from our resources that is no longer a promise.

What we are facing in the Wells nomination appears to be a return to bad ideas.

If Mr. Wells is seeking a new job, then let him compete for it.

As in Iceland and in every other genuinely successful and prosperous place, Newfoundlanders and Labradorians should hand public work to those who prove themselves in an open and competitive process.

Anything else hobbles us all.

The damn-fool fishery

This post was originally intended as a simple comment on one posted by Liam O'Brien about Iceland. At the time, I was intending it to be a much long thing, but in hindsight, I don't think it needs to be longer. [I hear people shouting "Shorter. Shorter."]

In light of the nonsense about a start-up to commercial fishing of cod and the ever-present bitching about the so-called food fishery, it actually makes for a timely piece now.

The simple answer on fish is that we are our own worst enemies. People like Jim Morgan, spouting utter tripe, get media coverage and manage to organize enough political pressure to get people to do things that make no sense. Like fishing at all a fish population that by any measure sits at far less in total than the amount of fish we were allowed to harvest in 1991.

The formula is simple for sensible people: There are no fish; therefore stop fishing. We call it conservation.

For the crowd calling for a food fishery - or as I like to call it the damn-fool fishery - the formula is: there are only a few fish; therefore for the sake of conserving the stock let us fish all but the last one, and make sure that if any are caught they are caught by someone from Newfoundland.

Let's hope that the federal fisheries department will keep making its policy choices rather than listen to the damn fools in this province who continually attack it.

Anyway, here's the piece for Liam -

Liam O'Brien's rejoinder to my post about Iceland went up a couple of days ago. It is worth having a look at if only for the intensity of Liam's presentation.

Liam claims toward the end of his piece: "I think I know why Ed's decided to go so hard against the Iceland comparison."

Actually I don't go hard against the Iceland comparison. I endorse the Iceland model and wish its substance would be employed here.

Iceland is a very useful object lesson, as I attempted to point out, if only people would look hard at the two places in the 1940s and again today and see with their eyes fully open what it is that has made the difference between the two places. The difference is not independence.

In his lengthy reposte to me, though, Liam actually proves my point. Each of the fisheries quotes he tosses up were not about anything other than preserving antiquated and outmoded fishing methods well after Confederation. Numerous inquiries and commissions in the years after Confederation had recommended changes; the changes were resisted tooth and nail.

The quotes Liam tosses up about trawlers in the late 1960s were arguments against a technology which we had ignored and which was proving to be infinitely more successful than the small boat operations which persisted in the province until relatively recently. This is a point I noted in "All trout live in trees" and it is worth restating. The industry in the province at the time of Confederation and for decades afterward steadfastly resisted attempts to turn the fishery into a modern, thriving business. By the 1980s, the government in power deliberately stuffed ever more people into the fishery such that no fish plant work or small boat fisherman could earn a decent living from labour alone. The fishery could only survive by massive social welfare programs and became itself a massive welfare system. Even today, fully 89% of fishplant workers make a meagre $16, 000 or less from their labour.

This dole was not foisted on the people of this province by some evil design of the minions in Ottawa. The inability to earn a living wage from the fishery was not a plot by central Canada to have someone else catch our fish.

People could not earn a living from the fishery simply because there were too many people attempting to suck a wage from a resource which even at its peak could never have delivered a living wage to the tens of thousands working in it. When the federal government realized in the early 1950s there was little chance of making significant changes for the good in the fishery in this province, it resorted instead to improving living standards by income supports. As decades passed, dependence on social programs grew and the willingness to change the character of the fishery dwindled. The fishery has become less business and livelihood and ever increasing amounts of myth.

The fishery as it stands today is a testament to choices made by Newfoundlanders and Labradorians directly and through their provincial and federal governments. The federal government's fisheries policy is the result of many factors but it is too convenient to ignore the role which fishing and other interests from this province have played in setting Canada's fisheries policy in Newfoundland and Labrador.

If we need any proof that these damn-fool ideas persist and have influence, one need only listen to the radio call-in shows, examine the provincial government's 1980s-style makework projects or listen to our federal cabinet representative.

Independence has nothing to do with it, Liam.

Mar 10 delayed - Labradorians still get more from Ottawa than St. John's

As I wad cleaning out the mouldy drafts bin, I can across this one which for some reason I didn't post back in March. Here it is now, for the record if nothing else.

[Note: originally drafted March 10, 2005]

There was some reason behind Danny Williams' hastily organized road trip to Labrador this week involving the whole cabinet and a gigantic news conference of cash announcements.

There was a reason...

but damned if I can figure out what it was.

Nor, as I have discovered can anyone else I know offer a theoretically possible explanation that doesn't involve a misalignment of celestial bodies and their influence on undiagnosed mental illness.

The best theory goes that it had something to do with the byelection. Problem for me on that one is that Danny Williams doesn't get any value of putting someone in the caucus of a party he doesn't support when he already holds sway over every MP save one and a good few of the senators from this province already.

Plus, Danny's man - which ever one gets the Tory nod - doesn't stand much of a chance of getting elected in Labrador anyway.

The story of the Labrador road trip gets ever stranger though, when you take into account Rob Antle's front page story in today's Telegram. I have linked to the Telly website but Miller didn't post Rob's story there today. Instead, I am reprinting it below.

It turns out that all but $3.0 million of the $56 million announced by Danny Williams comes courtesy of Ottawa.

And...

it seems most of the projects involved have been announced at least once before, some as recently as a couple of weeks ago.

D'0h!

Add this trip to your Homer Simpson file.

Before we get to the Antle piece, I'll toss out some observations:

1. John Efford needs to take a hard look around him and ask the great Dr. Phil question: "Is this working for you?" Every successful one of John's predecessors never let a nickel of federal money get spent anywhere in the province without the very coins themselves bearing a tag reading "Courtesy of Ottawa". It is unthinkable and unfathomable and a whole bunch of other "un-ables" that John Efford continues to let Danny Williams claim credit for cash from Ottawa.

If John wants to rebuild his image that he tarnished so badly during the recent Accord episode he need look no farther than these sort of announcements.

Get a grip, John.

2. Danny Williams evidently profitted from the advice from his golfing buddy Brian Tobin on being a successful politician. The current Premier's short-lived predecessor was fond of announcing an announcement that announced an announcement of something began to be announced originally a year beforehand. His record may be six news releases and news conferences on a single action, but I'll let someone else keep a closer track of Brian's exact score.

Incidentally, Tobin was once described as being able to smell a headline a mile away. See Greg Weston's account of the Turner tenure as Prime Minister and Leader Opp. (Reign of error, (Toronto: MacGraw-Hill Ryerson, 1988), pp. 142-143) for the full story.

This Labrador trip has Brian Tobin's fingerprints all over it. If Tobin wasn't involved directly, then Danny seems to been channeling Tobin's ghost from the greens.

3. While this gaff isn't as damaging as some of the stuff we saw a year ago, it seems that Tobin...err...Williams and his political staff still have some fundamental difficulties with getting the basics right.

Surely someone knew that this money was old and Federal. No one saw this coming? Maybe the fine are of writing a briefing note that actually says something has been lost.

If the whole thing was one of The Boss' Manic Monday Moments, surely to heavens there is somebody on the Hill who can talk him in off the ledge.

I just shake my head sometimes in utter disbelief. Don't even get me started on the announcement today of a paltry sum to handle school renovations and repairs that appears to have been timed purely in reaction to the last flooding of a St. John's area school.

Anyway, here's the story by Rob Antle.

It may be a one party state, but at least it is entertaining.

Is there a matinee on Sunday? What's the entree this evening?

Text begins...

"Old cash in Williams' speech"
by Rob Antle
The Telegram

Page A1

The Williams administration previously announced plans to spend most of the $56 million it portrayed as new money for Labrador this week.

And the vast majority of the money comes from federal, not provincial, sources.

"Today I am announcing a 2005-06 investment of $56 million to improve access to health services, strengthen aboriginal communities, build and repair infrastructure and expand economic opportunities," Premier Danny Williams said in a news release Tuesday.

"This is the strongest signal yet that government intends to see Labrador thrive and prosper, and to see Labradorians enjoy the same standard of living enjoyed by residents living on the island."

What Williams didn't say is that government previously announced $31 million of that $56-million total six months earlier.

In September 2004, the province said it would spend $35 million to kick-start Phase 3 of the Trans-Labrador Highway.

In Happy Valley-Goose Bay Tuesday, Williams announced $40 million in spending on Phase 3 of the highway - with, he acknowledged, some "carry-overs" from the previous year.

But those "carry-overs" amounted to $31 million, or 78 per cent of the $40-million total.

Department of Transportation officials confirmed Wednesday that new, unannounced, work will account for only $9 million of the money spent in 2005-06.

Elizabeth Matthews, a spokeswoman for Williams, downplayed the discrepancy.

"As the premier stated yesterday, some of these funds are carried from last year," she said in a statement late Wednesday.

Matthews instead highlighted the positive aspects of other funding announced by Williams, such as money for social programs and other infrastructure.

Some of those infrastructure projects have already seen the light of the government news wire as well.

On Feb. 22, the province announced millions in multi-year capital works funding for Wabush and Labrador City - totals that appeared to be included in the $56-million tally unveiled Tuesday.

And most of the money involved is actually federal cash.

Every dime of the $40 million announced for Labrador highway work is from Ottawa.

It is the remaining cash in the Labrador Transportation Initiative Fund - the $340-million, one-time buyout from Ottawa accepted in 1997 by the Tobin administration for taking over responsibility of the Labrador ferry system.

Some $13.3 million of the remaining $16 million comes from various infrastructure funds.

The province offered no specific breakdowns on what money will come from which fund. But most of the programs are cost-shared, with the province picking up anywhere from about 30 per cent to 70 per cent of the overall tab.

The remaining total of about $3 million is broken down into a number of smaller initiatives.

Those include $167,000 for Labrador West residents traveling to Goose Bay for medical care, $200,000 for a hospital infrastructure assessment, $500,000 for the 2006 Labrador Winter Games and $70,000 to reopen a group home.

The Opposition critic for Labrador affairs dismissed many of the funding announcements as recycled news.

"After reviewing the number of announcements yesterday, it appears many of these initiatives were already announced or are being supplemented by federal money," Cartwright-L'Anse au Clair MHA Yvonne Jones said in a statement.

"There seems to be very little in the way of new announcements and many of the pressing needs and priorities of Labradorians were completely ignored."

Jones pointed specifically at the roads funding as an example.

"Premier Williams is trying to convince people that he announced $40 million for the Trans Labrador Highway," Jones said. "In actual fact, this money was announced years ago and is coming directly from the Labrador transportation fund.

"This is nothing more than an attempt by the premier to be seen investing new money in Labrador, when in actual fact, he is bribing the people of Labrador with their own money."

Labrador could be the site of at least one provincial byelection within months.

Two MHAs - Jones and Wally Andersen of Torngat Mountains - are contesting the federal Liberal nomination for Labrador.

If either wins the nomination, they would have to resign their provincial seat.

Andersen has also been linked to a potential role in the new Inuit government of Nunatsiavut.

The potential for another Labrador byelection was averted this week when Labrador West MHA Randy Collins said he would not run federally for the New Democrats.

Collins said in an interview that many people in his district have a positive reaction to this week's funding announcements.

He pointed to health-care money targeted at Labrador West. "I'm pleased to see that (the premier) kept that commitment."

He added, "Always, you'd like to see more."

Text ends.

Megapost for Monday/Get Smart Trivia instead

Since I am still trying to enjoy my vacation, I am putting off the Andy Wells megapost until Monday.

In the meantime, here's the answer to an old Get Smart trivia question I posed a while back, including a reference to the SAGE from back in April:

The question was about the link between Max, 99 and Newfoundland.

Here's the answer as posted to wouldyoubelieve.com:

Airdate: Saturday, March 1, 1969, 8:00 PM
Writers: Arne Sultan and Chris Hayward
Director: Jay Sandrich
Carl's Rating: ***

KAOS has been hijacking trucks filled with electronic equipment, so Max goes undercover as a truck driver. He promptly has his truck hijacked. Max can identify the hijacker, but the man he identifies was killed months before. That leads the Chief to suspect top scientist Dr. Eric Zharko of having perfected a machine to bring the dead back to life.

Max and 99 journey to a small island off the coast of Newfoundland to search for Dr. Zharko's lab in the island's caves. Unfortunately, Zharko finds them first and he attempts to place Max and 99 in suspended animation for five years.

Tom Poston, who was the original choice to play Max, appears in a great over-the-top performance as Dr. Zharko. "

Meanwhile, in current day Maine, a small ship disguised as a missile tracking vessel slips quietly out to sea. On board are agents of KAOS, the international organization of evil heading to re-activate Zharko's base.

Ludwig von Siegfried, KAOS vice president of public relations und terrorism (I swear that was his title) could not be reached for comment.

Ubique - James Montgomery Doohan, 1920-2005

Pause a moment today and remember James Doohan, who passed away yesterday morning at his home in Washington state at the age of 85.

Best known and eulogised already as engineer Montgomery Scott on the original Star Trek series, Doohan was an established character actor and veteran of the Second World War.

As a young artillery officer with the Royal Canadian Horse Artillery, Doohan landed on Juno Beach, 6 June 1944. Doohan was wounded subsequently, losing a finger and reputedly being saved from a mortal chest wound by the swift action of a cigarette case.

Doohan became the embodiment of the artillery motto ubique, literally translated as everywhere, since his popularity as engineer Scott led him to appear just about everywhere. Try and find a news website without a mention of Doohan today.

Quo fas et gloria ducunt, Jimmy Doohan.

In your case, right and glory have hopefully led to a restful eternity.

Shamless fan-ism

It's been a real treat with Lynda Calvert hosting the CBC supperhour news this week.

Does this sound like Andy Wells to you, Norm?

For those who may not be familiar with the issues involved in Danny Williams' attempt to foist Andy Wells on the offshore board, just take a look at the qualifications description Danny Williams approved for the ad Robertson Surette placed for the offshore board job.

It's really important to notice too that what Danny Williams called a mainland company is actually the local office of an internationally respected head-hunting firm.

It's the firm he approved.

Here's the list of qualifications:

"Candidates will have an in-depth knowledge of Newfoundland and LabradorÂ’s offshore oil and gas activities, along with a demonstrated ability to manage an organization with diverse technical and regulatory responsibilities, and to work effectively with senior industry and government officials. Qualified individuals will also have a good understanding of the structure and operation of the Canadian and international petroleum industry. Applicants will have extensive experience in the operational aspects of offshore petroleum activities, including full knowledge of related business, financial, safety and environmental matters, and of federal and provincial government legislation and operations. In addition, candidates will have experience in dealing with industry associations and a wide range of non-government organizations. This position requires exceptional communication skills."


Ok. Leave Andy Wells out of this for a second.

nowheree does the description say the person should have extensive experience in negotiating benefits for the province. It doesn't even hint at that. That's because the chairman and chief executive officer doesn't do that job. Danny Williams does.

As for Williams' comments about the existing list being "too close to the industry", I'd like to know how anyone would acquire the skills to run a regulatory body as described above and not actually know some people in the oil business. Again, the Prem's claim about "too close" is bogus: it isn't the real issue.

Now think of Andy Wells and see if you can see which of the above qualities Mr. Wells possesses.

Personally, I can think of a few other jobs related to the offshore where he might be better suited than asCEOo of the offshore board.

If Danny is so amazed by Andy Wells abilities, maybe Danny would appoint him minister of energy and let Andy actually handle the negotiations on Hebron.

What this all comes down to is credibility and while local media have been avoiding asking the Premier any tough questions on the Wells issue, I think this is another matter where a little caution is merited before we climb back on any bandwagons.

Go back and see what the Prem wanted from the offshore in January 2004 and see what he accepted in 2005 while proclaiming it "100%". The Prem will be quite happy to retell the war story again and again, but here's the kicker:

Compare the claim against the facts.

Notice the huge gap.

Now ponder the Premier's most recent offshore foray.

Ponder that until tomorrow's megapost which will wrap the whole thing up in a neat package.

Norm Doyle: oily untruth-meister spins more falsehoods

In an interview with CBC Radio's Geoff Gilhooley on 19 July, Norm Doyle told a story of being called by someone Norm identified as a lobbyist for the oil industry to make the claim that Andy Wells wasn't wanted by the industry as chair of the offshore board.

There are a couple of obvious pieces of nonsense in this entire Doyle interview:

1. Why the hell would anyone call Norm Doyle about anything to do with the offshore? He has NO influence over anything, let alone who sits on the offshore board.

I think Norm is telling a giant fib. A nose-puller. A falsehood.

A Gurmant Grewal.

Gee, likes that's the first time he's done that in recent months.

2. Doyle talks about having a strong chair as the solution for getting more from the offshore from the industry.

Norm has NO idea what he is talking about.

The Board doesn't do that job - Danny does.

3. The industry isn't the enemy here.

What Danny, Norm and da byes are up to is yet another example of misdirection.

They are picking a fight with the oil industry even though the oil industry has nothing to do with who runs the regulatory Board.

Nothing.

Not a sausage.

They want you to ignore Danny's efforts at political interference by getting angry at someone else.

4. Norm accuses the PM of having patronage on his mind.

Again, let's distract from an obvious case of political interference by accusing the feds of the very misdeed the province is doing.

The point is, Norm, - if you actually had a clue about anything - you know full well the process Danny is busily scuttling is designed to keep patronage out of appointments as well as keeping unqualified people out of key jobs.

Let the Accord work as it is supposed to work.

5. It will be Hibernia the Sequel: make-work and no royalties.

Underneath this all, with the way Danny and Norm talk, all I can hear is Brian Peckford talking about forcing the oil companies into building a gravity based structure for Hibernia.

Refineries. More benefits from oil.

We have heard the same sad song before.

The only people who pay for it are people like you and me.

We actually get less from the offshore than if we had not let political games trump the best interests of the province.

Now I want to know why Norm is joining Danny Williams in playing political games with the offshore.

Why is Norm Doyle telling yet more oily untruths?