On January 17, Consolidated Thompson chief executive Brian Tobin - yes, that Brian Tobin - said that his company would no longer be pursuing plans to purchase Wabush Mines.
No surprise there, since Bond Papers covered the issue when it happened. Never content to accept things at face value, your humble e-scribbler went so far as to speculate that maybe Premier Danny Williams' attitude to power costs for the two mines in Labrador West may have been a factor in the decision by CT to abandon the Wabush deal. Incidentally, CT cited unspecified liabilities as the reason for dropping the project.
On top of that, about 10 days after the original story, reference to the Bond Papers column turned up in The Aurora, Transcons' weekly in Labrador West.
How very strange then, that this news release flew out of Confederation Building at mid-day on Friday stating that the provincial government was encouraging CT to take another look at Wabush.
Two weeks after the company abandons the project and makes an announcement to investors to that effect, Danny Williams apparently decided to give his old pal Brian a call and "encourage" him to take another look.
The cynic would point out that the Premier is just trying to do some damage control in Labrador West in advance of what will be the fifth by-election in 2007.
Then again, regular readers of Bond Papers would recognize the pattern here. Long after an issue has been decided, Danny Williams issues a news release all for naught.
Think about the long series of releases and delays over the Voisey's Bay smelter location. INCO decided against the Argentia site since it carried way too many liabilities. Williams asked the federal government to accept unlimited liability for the site. He kept it up for months, until the feds politely declined the opportunity. Heck, Danny Williams was still talking about Argentia as INCO filed applications to approve the Long Harbour site.
Completely pointless, mind you, but Danny is persistent.
Then there was the release last summer taking issue with someone's remarks about the province's offshore policy. The only problem was the Premier's comments were about something that had happened three weeks previously. By the time he got around to clenching his jaw again for the cameras, most reporters - let alone most people on the planet - had long since forgotten what had been said at the NOIA conference on the local oil and gas industry. Nonetheless, Williams fired out the release, called reporters together and had at the windmill.
In this latest instance, there are one of three possible outcomes:
1. Since the company has skedaddled away from the purchase based on certain liabilities and maybe because of Danny Williams' position on power rates, Danny will find himself talking to himself...yet again. Consolidated Thompson will move on to other things. In the meantime, western Labrador will see some benefits from the Bloom Lake development, once it is up and operating.
2. Consolidated Thompson will gladly come back to the table expecting that Danny Williams will now be willing to talk some sense on power rates. They might even expect - since he is chasing after them - that he will pony up cash and take care of those pesky environmental liabilities.
Yes, the Great Negotiator will meet the Great Communicator.
But since the Great Negotiator is entering the talks from a position of some weakness, I'd put my money on the guy who parted ways from Frank Stronach after a handful of months and pocketed more cash than you could shake an unread financial report at.
3. While Danny is busily talking to shadows, or figuring out how to get his watch on the right date, Brian Tobin will make a pitch to Iron Ore Company of Canada, buy up their facility and extend the life of that operation.
That's only possible, of course, if Williams changes his tune on what rates IOC can buy power from its own company.
Either way you look at it though, this latest news release shows just exactly how heavily micromanaged and how badly out of touch this government is.
09 February 2007
The Equalization Phoney War
Before he was hired away from Atlantic Institute for Market Studies to work for the Harper Conservatives, Brian Lee Crowley wrote a brief commentary that might serve as a clue to the federal government's Equalization plans.
Crowley argues - among other things - that removing non-renewable natural resources is possible provided that provincial governments commit to use the revenue for debt reduction. The other features of Crowley's proposal are similar to the O'Brien expert panel recommendations and produce approximately the same cuts to outlays the federal government is seeking.
The federal budget will likely feature a revamped Equalization program that excludes 50% of resource revenues for all provinces. For provinces that wish to take up the option, the federal government will offer removal of the other 50% of non-renewable resource revenues provided the province agrees to commit the cash to debt reduction or infrastructure development.
Crowley's analysis shows that over a 10 year period, Newfoundland and Labrador could reduce its debt by $2.4 billion or 26.7% of Crowley's total debt of $9.1 billion. That's based on including only 50% of revenues from non-renewable resources in the Equalization formula.
That figure is suspiciously close to Premier Danny Williams' recent comment that the provincial budget will include a $2.0 billion for a new capital works program.
The Crowley option may already have been discussed at the finance ministers' meeting before Christmas. Any possible arrangement along those lines would have been communicated to Premiers - including Danny Williams - before Williams ramped up his anti-Ottawa tirade. In other words, he may already know the likely outcome. Williams can run a political crusade largely designed to divert public attention from substantial problems in the province knowing that the "war" is - in effect - a sham.
According to Crowley's analysis, the Equalization entitlement for Newfoundland and Labrador under the O'Brien scenario, and under his version that completely excludes non-renewables, would come out to the same figure: slightly more than $900 per capita.
If asked about it by news media on Friday, Williams' response is predictable:
1. Williams will insist on the original Harper promise that is "in writing six times."
2. Williams will criticize AIMS as a right-wing thinktank and dismiss Crowley out of hand. He can do this reliably since most people won't take the time to read Crowley's report and there is little likelihood news media will report it.
Once the federal government announces the Crowley option, the Williams reaction is also predictable:
1. Williams will claim complete victory since the federal government has lived up to its commitment to remove 100% of non-renewable resources from the Equalization formula and trashed the O'Brien mess that would have resulted if the "Goodale-inspired" plan was put in place. [No media in Newfoundland and Labrador will report that Crowley's plan is a modified version of the O'Brien one.]
2. The Premier will not discuss the commitment on revenues, and the feds will likely keep that under wraps as well. Danny Williams will emphasise the removal of 100% of resource revenues and declare yet another victory over the federal government with a "We got it!" as dramatic as the declaration of victory in January 2005.
All the public will see is cash flowing everywhere less than six months before a provincial election and in the same year as a federal election.
3. Danny Williams will openly campaign for Stephen Harper in the next federal election in an effort to repair the relationship with Ottawa.
Crowley argues - among other things - that removing non-renewable natural resources is possible provided that provincial governments commit to use the revenue for debt reduction. The other features of Crowley's proposal are similar to the O'Brien expert panel recommendations and produce approximately the same cuts to outlays the federal government is seeking.
The federal budget will likely feature a revamped Equalization program that excludes 50% of resource revenues for all provinces. For provinces that wish to take up the option, the federal government will offer removal of the other 50% of non-renewable resource revenues provided the province agrees to commit the cash to debt reduction or infrastructure development.
Crowley's analysis shows that over a 10 year period, Newfoundland and Labrador could reduce its debt by $2.4 billion or 26.7% of Crowley's total debt of $9.1 billion. That's based on including only 50% of revenues from non-renewable resources in the Equalization formula.
That figure is suspiciously close to Premier Danny Williams' recent comment that the provincial budget will include a $2.0 billion for a new capital works program.
The Crowley option may already have been discussed at the finance ministers' meeting before Christmas. Any possible arrangement along those lines would have been communicated to Premiers - including Danny Williams - before Williams ramped up his anti-Ottawa tirade. In other words, he may already know the likely outcome. Williams can run a political crusade largely designed to divert public attention from substantial problems in the province knowing that the "war" is - in effect - a sham.
According to Crowley's analysis, the Equalization entitlement for Newfoundland and Labrador under the O'Brien scenario, and under his version that completely excludes non-renewables, would come out to the same figure: slightly more than $900 per capita.
If asked about it by news media on Friday, Williams' response is predictable:
1. Williams will insist on the original Harper promise that is "in writing six times."
2. Williams will criticize AIMS as a right-wing thinktank and dismiss Crowley out of hand. He can do this reliably since most people won't take the time to read Crowley's report and there is little likelihood news media will report it.
Once the federal government announces the Crowley option, the Williams reaction is also predictable:
1. Williams will claim complete victory since the federal government has lived up to its commitment to remove 100% of non-renewable resources from the Equalization formula and trashed the O'Brien mess that would have resulted if the "Goodale-inspired" plan was put in place. [No media in Newfoundland and Labrador will report that Crowley's plan is a modified version of the O'Brien one.]
2. The Premier will not discuss the commitment on revenues, and the feds will likely keep that under wraps as well. Danny Williams will emphasise the removal of 100% of resource revenues and declare yet another victory over the federal government with a "We got it!" as dramatic as the declaration of victory in January 2005.
All the public will see is cash flowing everywhere less than six months before a provincial election and in the same year as a federal election.
3. Danny Williams will openly campaign for Stephen Harper in the next federal election in an effort to repair the relationship with Ottawa.
Pay heed to the silent majority
Political science professors often get quoted in media stories.
They are considered experts on politics.
Fair enough assumption.
Too often though, what comes out is nothing more than garden-variety opinion without much analysis.
Like this comment featured in a Canadian Press story on Thursday's by-election sweep by the ruling Progressive Conservatives under Danny Williams:
What Temelini didn't apparently notice was that the turn-out in these by-elections was strikingly low. Canadian Press did and included references to fall-out from the legislature spending scandal.
None of the turn-outs are anything to crow about. The high was Port au Port where 51% of eligible voters showed up at the polls. In Kilbride, a traditional Conservative stronghold, only 33% of voters turned out to cast ballots. That continues a low turn-out trend set in Signal Hill-Quidi Vidi where, as in Port au Port, Danny Williams personally campaigned extensively on behalf of his candidate.
Look closer at the winning side and you see something as well. In Port au Port, Progressive Conservative candidate Tony Cornect took 31% of the eligible vote. That's in a district where the Premier and his entire caucus campaigned hard to convince voters they had to deliver a message to Ottawa and Big Oil with their votes.
In Ferryland and Kilbride, where voters didn't see the same Danny campaign machine in action and didn't get the same messages, the winners got respectively 34% and 26% of the eligible vote.
That hardly sounds like "Go Danny Go!"
The simple fact is that most voters sat on their hands.
In Port au Port where the Danny message was clearly a call to send an unmistakable sign to the foreign demons, more opted to sit quietly on the sidelines than voted for the Danny-boy candidate.
The question to answer is why they did that. Temelini clearly didn't know. Odds are good most of the commentary in the next few days will miss it too.
Perhaps the non-voters just supported Danny so much they didn't feel the need to vote. Highly unlikely. If there had been an election in January 2005, Danny Williams would have found more members on his side than there are seats in the legislature.
Perhaps some felt there was no point in voting since the outcomes was pre-ordained in a race where the Premier is apparently overwhelmingly popular. That's a possibility.
Perhaps some sat on their hands because they are simply disaffected from the political process as a direct result of the ongoing scandal. That's much more likely.
Other factors were also at work as well and taken together with that last likelihood, one can come up with a plausible explanation of the by-election result.
In the two Avalon peninsula ridings, the Liberal campaigns were vigorous on a local level but little was done to launch major attacks on the government as a way of hamstringing cabinet ministers and capitalizing on public discontent.
Neither party took the chance to attack cabinet ministers - like Kathy Dunderdale, for example - whose performance overall has been abysmal and who, shortly before Christmas, was caught in an embarrassing case of misleading the province on a public tendering scandal.
Ditto for transportation minister John Hickey, who sits in cabinet despite being the subject of a criminal investigation over alleged double-billing on his legislature allowances.
In each riding, the candidates fought very local battles. True, sitting members of the House campaigned door-to-door, but the province-wide political messages simply didn't exist.
For voters, especially voters intent on sending Danny Williams a rocket, there wasn't a clear alternative to Williams that they could stand behind. Neither the Liberals nor New Democrats look like a renewed and credible alternative devil to the one they already know. That reaction is all too common in Newfoundland and Labrador, the 1.5 party state.
In past cases where the Opposition has picked up seats, voters wanted to send a message to government. But that's usually been when the incumbents are in trouble and the major opposition party - Liberal or Conservative - looks like a pretty solid alternative. Otherwise, voters stay home and wash their hair or make sure all the spaghetti is lined up straight in the cupboard rather than vote. It's the equivalent of telling a public opinion pollster that they are "undecided"; there's no way to miss the meaning if you pay attention.
What's left on Thursday, then, is a situation where the highly organized, well-funded and aggressive political party - bolstered by incumbency - could identify its hard core supporters and get them to the polls. It isn't rocket science.
The only bright spot for the Liberals now remains Humber Valley where the capable and popular candidate will face mounting pressure over the weekend. As he goes door-to-door, Dwight Ball can simply tell people that Danny doesn't need one more seat to send a message. That job was done. They can instead make their choice based on something else.
Danny Williams did a curious thing in putting a label on the by-election results before they were known. He is already claiming a massive endorsement, of course, but in truth, both Stephen Harper and Big Oil are looking at Williams' victories with a more sophisticated eye than any of the commentary from news media and at least one poli sci prof would bring to bear.
For Harper, Williams' victories are largely irrelevant. Harper likely knows that there is a simple solution to the Equalization battle at hand. That makes Williams' Equalization battle a distraction intended primarily for domestic audiences. The reaction in the Langevin Block will likely be the common one to news from Dannystan: big freakin' deal.
Of course, Williams doesn't matter politically to Stephen Harper anyway since Williams' political influence west of Corner Brook is all but non-existant.
For the oil companies, knowing that Williams couldn't generate a massive groundswell of support is telling. If the by-elections mattered to them at all - and there is no reason to believe any of them pay any serious attention to that sort of thing - the public affairs analysts would tell them that Williams faces difficult times ahead and there is a mood of discontent that affects all current politicians.
Their conclusion would be the same one they already reached: Hebron is dead for at least five years. Hibernia South is on life-support. An emboldened Danny Williams is highly unlikely to come to any deal at all, no matter how sweet the pot gets. They will continue to wait on the energy plan - if it ever comes - or the gas royalty regime. Their interest in these documents has been largely academic since last April. Medium- to long-term spending commitments are already made. By the time they might have an interest in Hebron or Hibernia again, or if there is a significant discovery somewhere else offshore, Danny will be gone and the economic and political environment will be changed.
Danny Williams can claim there are discussions and negotiations with Big Oil.
People who know what's really going on understand that the fibreoptic phone lines from the Confederation Building to the oil companies are blacker than crude.
They are considered experts on politics.
Fair enough assumption.
Too often though, what comes out is nothing more than garden-variety opinion without much analysis.
Like this comment featured in a Canadian Press story on Thursday's by-election sweep by the ruling Progressive Conservatives under Danny Williams:
"Byelections are typically opportunities to send a message to government," [MUN political science prof Michael Temelini] he said in an interview. "There's no message here, other than, 'Keep on going, Danny!' "By-elections are about a lot of things. It all depends on context, so a comment like the one above doesn't offer any insight.
What Temelini didn't apparently notice was that the turn-out in these by-elections was strikingly low. Canadian Press did and included references to fall-out from the legislature spending scandal.
None of the turn-outs are anything to crow about. The high was Port au Port where 51% of eligible voters showed up at the polls. In Kilbride, a traditional Conservative stronghold, only 33% of voters turned out to cast ballots. That continues a low turn-out trend set in Signal Hill-Quidi Vidi where, as in Port au Port, Danny Williams personally campaigned extensively on behalf of his candidate.
Look closer at the winning side and you see something as well. In Port au Port, Progressive Conservative candidate Tony Cornect took 31% of the eligible vote. That's in a district where the Premier and his entire caucus campaigned hard to convince voters they had to deliver a message to Ottawa and Big Oil with their votes.
In Ferryland and Kilbride, where voters didn't see the same Danny campaign machine in action and didn't get the same messages, the winners got respectively 34% and 26% of the eligible vote.
That hardly sounds like "Go Danny Go!"
The simple fact is that most voters sat on their hands.
In Port au Port where the Danny message was clearly a call to send an unmistakable sign to the foreign demons, more opted to sit quietly on the sidelines than voted for the Danny-boy candidate.
The question to answer is why they did that. Temelini clearly didn't know. Odds are good most of the commentary in the next few days will miss it too.
Perhaps the non-voters just supported Danny so much they didn't feel the need to vote. Highly unlikely. If there had been an election in January 2005, Danny Williams would have found more members on his side than there are seats in the legislature.
Perhaps some felt there was no point in voting since the outcomes was pre-ordained in a race where the Premier is apparently overwhelmingly popular. That's a possibility.
Perhaps some sat on their hands because they are simply disaffected from the political process as a direct result of the ongoing scandal. That's much more likely.
Other factors were also at work as well and taken together with that last likelihood, one can come up with a plausible explanation of the by-election result.
In the two Avalon peninsula ridings, the Liberal campaigns were vigorous on a local level but little was done to launch major attacks on the government as a way of hamstringing cabinet ministers and capitalizing on public discontent.
Neither party took the chance to attack cabinet ministers - like Kathy Dunderdale, for example - whose performance overall has been abysmal and who, shortly before Christmas, was caught in an embarrassing case of misleading the province on a public tendering scandal.
Ditto for transportation minister John Hickey, who sits in cabinet despite being the subject of a criminal investigation over alleged double-billing on his legislature allowances.
In each riding, the candidates fought very local battles. True, sitting members of the House campaigned door-to-door, but the province-wide political messages simply didn't exist.
For voters, especially voters intent on sending Danny Williams a rocket, there wasn't a clear alternative to Williams that they could stand behind. Neither the Liberals nor New Democrats look like a renewed and credible alternative devil to the one they already know. That reaction is all too common in Newfoundland and Labrador, the 1.5 party state.
In past cases where the Opposition has picked up seats, voters wanted to send a message to government. But that's usually been when the incumbents are in trouble and the major opposition party - Liberal or Conservative - looks like a pretty solid alternative. Otherwise, voters stay home and wash their hair or make sure all the spaghetti is lined up straight in the cupboard rather than vote. It's the equivalent of telling a public opinion pollster that they are "undecided"; there's no way to miss the meaning if you pay attention.
What's left on Thursday, then, is a situation where the highly organized, well-funded and aggressive political party - bolstered by incumbency - could identify its hard core supporters and get them to the polls. It isn't rocket science.
The only bright spot for the Liberals now remains Humber Valley where the capable and popular candidate will face mounting pressure over the weekend. As he goes door-to-door, Dwight Ball can simply tell people that Danny doesn't need one more seat to send a message. That job was done. They can instead make their choice based on something else.
Danny Williams did a curious thing in putting a label on the by-election results before they were known. He is already claiming a massive endorsement, of course, but in truth, both Stephen Harper and Big Oil are looking at Williams' victories with a more sophisticated eye than any of the commentary from news media and at least one poli sci prof would bring to bear.
For Harper, Williams' victories are largely irrelevant. Harper likely knows that there is a simple solution to the Equalization battle at hand. That makes Williams' Equalization battle a distraction intended primarily for domestic audiences. The reaction in the Langevin Block will likely be the common one to news from Dannystan: big freakin' deal.
Of course, Williams doesn't matter politically to Stephen Harper anyway since Williams' political influence west of Corner Brook is all but non-existant.
For the oil companies, knowing that Williams couldn't generate a massive groundswell of support is telling. If the by-elections mattered to them at all - and there is no reason to believe any of them pay any serious attention to that sort of thing - the public affairs analysts would tell them that Williams faces difficult times ahead and there is a mood of discontent that affects all current politicians.
Their conclusion would be the same one they already reached: Hebron is dead for at least five years. Hibernia South is on life-support. An emboldened Danny Williams is highly unlikely to come to any deal at all, no matter how sweet the pot gets. They will continue to wait on the energy plan - if it ever comes - or the gas royalty regime. Their interest in these documents has been largely academic since last April. Medium- to long-term spending commitments are already made. By the time they might have an interest in Hebron or Hibernia again, or if there is a significant discovery somewhere else offshore, Danny will be gone and the economic and political environment will be changed.
Danny Williams can claim there are discussions and negotiations with Big Oil.
People who know what's really going on understand that the fibreoptic phone lines from the Confederation Building to the oil companies are blacker than crude.
08 February 2007
Danny sweeps three
The Tories took all three by-elections.
No surprise in Kilbride which is a staunchly Tory seat, for for that matter in Ferryland which was last represented by a Liberal in the 1950s.
In Port au Port, the race was reportedly close, however a heavy press put on by the Tories seems to have pulled more Tories to the polls.
Overall though, the voter turnout is down dramatically. It follows a trend that has been running since the race to replace Fabian Manning where the turnout exceeded the general turnout by a small margin.
No surprise in Kilbride which is a staunchly Tory seat, for for that matter in Ferryland which was last represented by a Liberal in the 1950s.
In Port au Port, the race was reportedly close, however a heavy press put on by the Tories seems to have pulled more Tories to the polls.
Overall though, the voter turnout is down dramatically. It follows a trend that has been running since the race to replace Fabian Manning where the turnout exceeded the general turnout by a small margin.
Stelmach and Williams at odds on fed hand-outs?
During his trip to Alberta with the three Maritime premiers, Premier Danny Williams claimed he had support from Alberta Premier Ed Stelmach in Williams' battle with Ottawa on Equalization.
Seems that might not be exactly the case.
Stelmach told reporters in Alberta that he and his provincial colleagues have adopted a "wait-and-see" approach. That is, they'll wait and see what Ottawa does before discussing Equalization any further.
CHED Edmonton is reporting that Stelmach "says if more revenue is put into the pool, it puts additional pressures on so-called 'have provinces' to maintain those levels in the future."
Williams wants to make changes to Equalization that would see more money flow to his province and keep Newfoundland and Labrador in a "have-not" position for the foreseeable future.
Stelmach apparently prefers lower Equalization demands while seeing additional federal cash flowing to all provinces through transfers on health and education.
Seems that might not be exactly the case.
Stelmach told reporters in Alberta that he and his provincial colleagues have adopted a "wait-and-see" approach. That is, they'll wait and see what Ottawa does before discussing Equalization any further.
CHED Edmonton is reporting that Stelmach "says if more revenue is put into the pool, it puts additional pressures on so-called 'have provinces' to maintain those levels in the future."
Williams wants to make changes to Equalization that would see more money flow to his province and keep Newfoundland and Labrador in a "have-not" position for the foreseeable future.
Stelmach apparently prefers lower Equalization demands while seeing additional federal cash flowing to all provinces through transfers on health and education.
Premiers disagree on Equalization
Demonstrating once again that the Council of the Federation is a vital tool of inter-provincial co-operation, premiers agreed yesterday to abandon any efforts to achieve a consensus on Equalization and instead move on to other topics, like energy and internal trade.
Danny Williams told reporters: "There wasn't any arguing, there was enough of that in other meetings. There was a real appetite to work together."
So much for any posturing by Danny Williams that more Premiers than Lorne Calvert were staunchly behind Williams' got-it-alone approach to inter-provincial relations. After all, one of the things Bond Papers has maintained consistently is that Williams' unilateral blustering goes over like the proverbial flatulent emission in a house of worship.
That would be the plenty of arguing thing.
So now Premiers will go on to other issues, having successfully achieved a consensus on Equalization: "No matter what happens we must be able to beat up on Ottawa."
Yep, like you haven't heard that before.
Danny Williams told reporters: "There wasn't any arguing, there was enough of that in other meetings. There was a real appetite to work together."
So much for any posturing by Danny Williams that more Premiers than Lorne Calvert were staunchly behind Williams' got-it-alone approach to inter-provincial relations. After all, one of the things Bond Papers has maintained consistently is that Williams' unilateral blustering goes over like the proverbial flatulent emission in a house of worship.
That would be the plenty of arguing thing.
So now Premiers will go on to other issues, having successfully achieved a consensus on Equalization: "No matter what happens we must be able to beat up on Ottawa."
Yep, like you haven't heard that before.
07 February 2007
Natural gas terminal on track: Turner
Mark Turner, president and chief executive of Newfoundland LNG Ltd, is optimistic construction will start this spring on the company's proposed liquid natural gas terminal near Arnold's Cove.
Newfoundland LNG's environmental application to the provincial government received conditional approval around the same time the provincial government denied conditional approval to Hibernia South.
Newfoundland LNG's environmental application to the provincial government received conditional approval around the same time the provincial government denied conditional approval to Hibernia South.
Hibernia production slowed down
Operators of the Hibernia production platform are doing a scheduled maintenance now, instead of seven months from now when it was originally the planned.
Industry insiders have known for some time that the operators moved up the planned maintenance in the wake of a generator malfunction in January. The decision pre-dates the province's rejection of an application to develop Hibernia South.
Production is expected to be 110,000 barrels per day, down from the 220,000 barrels per day at peak.
Industry insiders have known for some time that the operators moved up the planned maintenance in the wake of a generator malfunction in January. The decision pre-dates the province's rejection of an application to develop Hibernia South.
Production is expected to be 110,000 barrels per day, down from the 220,000 barrels per day at peak.
A family of talent
Mike Herriott's back in town to play a gig.
He truly is a talented trumpet player who has made a name for himself internationally. Your humble e-scribbler played in a band with Mike more than a few years ago. Mike was one of several talented trumpet guys - talented to the point of being intimidating; talented to the point of generating a bunch of ongoing "mine is bigger" kinda healthy competition - so it's no surprise that each them has gone on to acclaim in the musical realm.
Mike comes from a talented family, too. His brother Richard is an accomplished pianist.
Another brother - Chuck - is an exceptionally creative local actor.
He truly is a talented trumpet player who has made a name for himself internationally. Your humble e-scribbler played in a band with Mike more than a few years ago. Mike was one of several talented trumpet guys - talented to the point of being intimidating; talented to the point of generating a bunch of ongoing "mine is bigger" kinda healthy competition - so it's no surprise that each them has gone on to acclaim in the musical realm.
Mike comes from a talented family, too. His brother Richard is an accomplished pianist.
Another brother - Chuck - is an exceptionally creative local actor.
Lower Churchill timelines slide back
Newfoundland and Labrador Premier Danny Williams announced on Tuesday that the province's hydro corporation had filed applications to transmit electricity through New Brunswick to unspecified markets.
In a media scrum, Williams said there were currently no talks under way on power purchase agreements since negotiations couldn't occur until costs were known. Tuesday's announcement was part of the process of gathering information on costs.
Williams also told reporters the provincial government would consider deferring revenue on the so-called Maritime route (Labrador via Newfoundland to Prince Edward Island). Deferring revenue is code for selling power at a loss.
The feisty Premier claimed the New Brunswick application is part of a plan to deal with a situation in which Quebec would supposedly try to keep Lower Churchill power from markets by loading its grid with energy generated by Hydro Quebec.
Williams knows this argument is a complete fiction since the joint Quebec/Ontario proposal on the Lower Churchill - flatly rejected by Williams - included upgrades to the Quebec grid and to the Quebec-Ontario interconnection. The limitations of Quebec's existing grid are well known and Hydro Quebec is already working on upgrades to the system's capacity.
The go-it-alone option now being pursued by Williams means that Newfoundland and Labrador Hydro may now have to eat the costs of grid upgrades in Quebec and will certainly bear the cost of the underwater cabling to use the Maritime route. The cheapest estimate for the Maritime route would add an additional $1.5 to $2.0 billion to the project cost.
Taken altogether, Williams announcement on Tuesday would likely slide the project time lines back by upwards of two years. Project sanction - which some assumed meant construction startup - might be achieved in 2009 but that would simply mean approval to start negotiating power purchase agreements. Construction would start - if it started at all - only after those deals were closed and financing arranged.
Plans to sell Upper Churchill power to New York fell apart in the 1960s since the costs of transmission from Labrador could never be brought in line with market prices.
The Lower Churchill project is currently estimated to cost upwards of $9.0 billion, or 75% of the total provincial debt load. An additional $9.0 billion of public debt - especially if power is sold at a loss - would bring the provincial debt to almost $20 billion.
That figure may be tough for financial markets to bear given the current gross domestic product is running at less than $25 billion. Newfoundland and Labrador's debt to GDP ratio at that point would be one of the worst in the developed world. Cancellation of major oil projects, like Hebron and Hibernia South, will prevent anticipated growth in the provincial economy that might have otherwise offset the financial problems or given cash that would have covered some of the Lower Churchill's costs.
In a media scrum, Williams said there were currently no talks under way on power purchase agreements since negotiations couldn't occur until costs were known. Tuesday's announcement was part of the process of gathering information on costs.
Williams also told reporters the provincial government would consider deferring revenue on the so-called Maritime route (Labrador via Newfoundland to Prince Edward Island). Deferring revenue is code for selling power at a loss.
The feisty Premier claimed the New Brunswick application is part of a plan to deal with a situation in which Quebec would supposedly try to keep Lower Churchill power from markets by loading its grid with energy generated by Hydro Quebec.
Williams knows this argument is a complete fiction since the joint Quebec/Ontario proposal on the Lower Churchill - flatly rejected by Williams - included upgrades to the Quebec grid and to the Quebec-Ontario interconnection. The limitations of Quebec's existing grid are well known and Hydro Quebec is already working on upgrades to the system's capacity.
The go-it-alone option now being pursued by Williams means that Newfoundland and Labrador Hydro may now have to eat the costs of grid upgrades in Quebec and will certainly bear the cost of the underwater cabling to use the Maritime route. The cheapest estimate for the Maritime route would add an additional $1.5 to $2.0 billion to the project cost.
Taken altogether, Williams announcement on Tuesday would likely slide the project time lines back by upwards of two years. Project sanction - which some assumed meant construction startup - might be achieved in 2009 but that would simply mean approval to start negotiating power purchase agreements. Construction would start - if it started at all - only after those deals were closed and financing arranged.
Plans to sell Upper Churchill power to New York fell apart in the 1960s since the costs of transmission from Labrador could never be brought in line with market prices.
The Lower Churchill project is currently estimated to cost upwards of $9.0 billion, or 75% of the total provincial debt load. An additional $9.0 billion of public debt - especially if power is sold at a loss - would bring the provincial debt to almost $20 billion.
That figure may be tough for financial markets to bear given the current gross domestic product is running at less than $25 billion. Newfoundland and Labrador's debt to GDP ratio at that point would be one of the worst in the developed world. Cancellation of major oil projects, like Hebron and Hibernia South, will prevent anticipated growth in the provincial economy that might have otherwise offset the financial problems or given cash that would have covered some of the Lower Churchill's costs.
06 February 2007
Energy plan delayed...again
Premier Danny Williams told a VOCM audience this evening the energy plan - 10 years in the making - will be delayed until spring, at the earliest.
He said the gas royalty regime will likely be split off from the plan and announced separately.
In the wake of the Hebron failure, Premier Danny Williams said the gas royalty regime - which at that time had to be included in the energy plan would be released, along with the energy plan, in late 2006.
Times change.
The energy plan - dating from the late 1990s when Brian Tobin was Premier - has languished inside the energy department ever since.
He said the gas royalty regime will likely be split off from the plan and announced separately.
In the wake of the Hebron failure, Premier Danny Williams said the gas royalty regime - which at that time had to be included in the energy plan would be released, along with the energy plan, in late 2006.
Times change.
The energy plan - dating from the late 1990s when Brian Tobin was Premier - has languished inside the energy department ever since.
Plunkin' it at City Hall
Danny Williams says he doesn't take a salary.
He does, of course.
Williams donates the whole thing to his family charity.
Since the mid-1990s, members of the House of Assembly [right: Not exactly as illustrated] have quietly adopted the same practice. They take a portion of the allowances established to cover the costs of operating a constituency office and of representing their districts and hand them out to a variety of groups and individuals.
There is something fundamentally - ethically - wrong with elected officials using public money, directly or indirectly, in this way.
It doesn't take a rule book or a judge to let you know it is...wrong.
Should we be surprised in the current political climate that at least one councilor at St. John's Tammany City Hall [left] does the same thing with his annual salary of about $35,000?
As cbc.ca notes in a story on a recent racket about budget cuts,
The ward.
Money goes back to the ward.
Looks like Bond Papers had it right in 2005.
He does, of course.
Williams donates the whole thing to his family charity.
Since the mid-1990s, members of the House of Assembly [right: Not exactly as illustrated] have quietly adopted the same practice. They take a portion of the allowances established to cover the costs of operating a constituency office and of representing their districts and hand them out to a variety of groups and individuals.There is something fundamentally - ethically - wrong with elected officials using public money, directly or indirectly, in this way.
It doesn't take a rule book or a judge to let you know it is...wrong.
Should we be surprised in the current political climate that at least one councilor at St. John's As cbc.ca notes in a story on a recent racket about budget cuts,
[Ron]Ellsworth, a successful businessman, said most of his salary winds up in community groups.Ah yes.
"My salary goes back into my ward," Ellsworth said.
The ward.
Money goes back to the ward.
Looks like Bond Papers had it right in 2005.
DW missile hits target!
Danny Williams said Friday he wanted to send a missile to the oil industry.
It hit.
bloomberg.com - one of the most widely read business news services included this paragraph in its coverage of Husky Energy's financial reports:
It hit.
bloomberg.com - one of the most widely read business news services included this paragraph in its coverage of Husky Energy's financial reports:
Husky's plan to boost output at White Rose may be slowed after a provincial government ruling rejected the proposed expansion of Hibernia, a nearby field, the Canada-Newfoundland and Labrador Offshore Petroleum Board said Feb. 1.The missile message got through: Newfoundland and Labrador might not be a good place to invest.
Lower Churchill costs increase; must be polling season
This announcement on filing an application to build transmission lines in New Brunswick for Lower Churchill electrical power means three things:
1. The costs of the project will escalate;
2. Corporate Research Associates is in the field again; and,
3. There are by-elections on the go.
1. The costs of the project will escalate;
2. Corporate Research Associates is in the field again; and,
3. There are by-elections on the go.
Service interruption
A minor technical glitch kept the updates down for a couple of days.
Bond is back!
We now return you to regularly scheduled programming.
Bond is back!
We now return you to regularly scheduled programming.
04 February 2007
McLellan joins LabMag
Former deputy prime minister Anne McLellan has joined New Millenium Corp as a strategic advisor.
New Millennium holds an 80% interest in the LabMag Iron Ore Project, the world's largest known undeveloped magnetite reserve that is currently at an advanced stage of exploration. The project is located in the province of Newfoundland and Labrador ("NL") about 220 km north of Labrador City and 30 km northwest of Schefferville, Quebec. The development envisions the construction and operation of a mine, crusher, concentrator, slurry pipeline, pellet plant, shiploading facilities and related infrastructure. Subject to positive feasibility studies and project financing, it is expected that pellet production from LabMag would constitute a significant new source of global pellet supply and would be shipped by ocean vessels to markets in Canada, the United States, Western Europe and Asia.
03 February 2007
Williams acts...long after the fact (Updated)(Updated 2)
[Originally posted 02 February 2007]
Danny Williams wants members of the legislature repay a $2800 bonus granted in May 2004 for the previous fiscal year.
Yesterday - after the story broke - Williams was defending the legislators as supposed victims of incompetent administration or an Internal Economy Commission that ran its own private, unquestioned fiefdom.
With such heavy public criticism, the Premier has apparently changed his mind.
Well, sort of.
First there's this little admission : "I became aware of the decision some time after the fact, and I don’t think there is any disagreement that it was a poor decision that did not reflect the values and guiding principles of our government at that time."
How long is "some time"? A day? A few hours? A few years?
If it was so obviously wrong - as the Premier now acknowledges - why did it take the public furor to have the Premier act?
________________________
Update: 02 February 2007 Premier Danny Williams scrummed with reporters today on his news release. Under questioning from David Cochrane (if the voice on the CBC Radio broadcast was right), the Premier equivocated on when he first learned of the added allowance for members of the House of Assembly.
Cochrane persisted to his credit.
Williams persisted in his evasion, to his detriment.
Then he switched to excuses: he was a new Premier with huge responsibilities and lots of stuff going on; when he heard about it he never put it in the wage freeze context; he didn't pay attention because it was about compensation and allowances and since he doesn't take a salary, then he didn't feel it right to have input on these things.
A bad story for the Premier just got immensely worse.
The Premier's evasion is done for the same reason as the vague wording in the original minutes of the Internal Economy Commission approving the allowance increase.
The Premier seeks to evade responsibility for his own actions, or in this case his inaction.
His excuses are more revealing of his mindset in seeking to escape responsibility.
The Premier's job is a tough one. It carries weighty responsibilities, not the least of which is to watch over the spending of public money. He has helpers in his task, if he lets them help. But those helpers must receive clear and unmistakable direction. Having worked in the office, your humble e-scribbler can attest to the demands of the office. Having spoken over the years with several premiers, your scribbler is also witness to the weight that sits on the shoulders of each Premier.
None would have offered excuses. The exercise of offering excuses is bad enough; it is the antithesis of leadership and fundamentally, the Premier must be a leader in good times and bad.
Not putting the allowance hike in the context of the freeze is a excuse which - by the Premier's own implication - suggests his judgment is exceedingly poor. How could he not see what everyone else apparently saw at the time and the public knows now? The allowance increase was unnecessary. It was wrong. He should have stopped it when he learned of it. He is the Premier after all.
The third is excuse is perhaps even more serious by implication than the others since it contains a serious misstatement of fact.
Danny Williams, member of the House of Assembly and Premier, collects a salary and draws down on his constituency entitlements and other allowances just like every other member of the House of Assembly and member of cabinet.
It's a matter of fact.
Nothing wrong with it.
He lives entirely within his means and there is no sign of any impropriety on his part.
Danny Williams donates his salary to his own family charity.
That too is a matter of fact.
Nothing wrong with it.
Who better - as Premier, and given his example - than to put a stop to an inappropriate public hand-out done in a sneaky way?
For the Premier to say he turned a blind eye to this allowance since he doesn't collect a salary is to mislead the public on a key aspect of an important issue. One can only believe the Premier does so deliberately since he repeats the same false comment each time he mentions his salary.
The House of Assembly story today took on a much more ominous cast for Danny Williams and it did so as a consequence of the Premier's own comments.
Danny Williams enjoys almost unprecedented public confidence in his forthrightness and integrity. People believe that above all else, Danny Williams will be accountable. That is his reputation.
The essence of accountability is responsibility.
In evading responsibility for not putting a halt to the allowance when it occurred or as soon as he learned of it, in equivocating so miserably on even when he knew, Danny Williams attacked the heart of his credibility and hence his reputation.
Danny Williams forgot the most important lesson of scandal: it is not the action or the inaction - not matter how minor - that causes a downfall.
It is the evasion that kills you in the long run.
__________________________________
Update 2: When did Danny know about the extra cash? Likely May 2004, when it was approved, according to the Telegram front page story in its 03 February edition.
That little morsel wasn't reported by other media.
So the guy who had enough power to order the Internal Economy Commission to let the Auditor General back into the House of Assembly in April 2004 couldn't or wouldn't deal with a bonus stipend right after he froze public sector wages for two years.
Hmmm.
The secretive bonus was effectively hidden from view by a vaguely worded set of minutes from the meeting that approved the retroactive payment.
As for the total overspending by members of the House of Assembly allowances and assistance budget during the two years of the freeze - 2004 and 2005 - well that was hidden by misreporting - deliberately (?) - the spending in the annual budget estimates.
For FY 2004, the government estimates showed spending as dead-on budget even though the entire cabinet knew at the time the account was overspent by $479,000. The next year they misreported the spending, knowing full-well the account was overspent by $557,000
The Auditor General's reports to date have only identified 20% of the overspending for those two years. AG John Noseworthy says his work on overspending is done.
Danny Williams wants members of the legislature repay a $2800 bonus granted in May 2004 for the previous fiscal year.
Yesterday - after the story broke - Williams was defending the legislators as supposed victims of incompetent administration or an Internal Economy Commission that ran its own private, unquestioned fiefdom.
With such heavy public criticism, the Premier has apparently changed his mind.
Well, sort of.
First there's this little admission : "I became aware of the decision some time after the fact, and I don’t think there is any disagreement that it was a poor decision that did not reflect the values and guiding principles of our government at that time."
How long is "some time"? A day? A few hours? A few years?
If it was so obviously wrong - as the Premier now acknowledges - why did it take the public furor to have the Premier act?
________________________
Update: 02 February 2007 Premier Danny Williams scrummed with reporters today on his news release. Under questioning from David Cochrane (if the voice on the CBC Radio broadcast was right), the Premier equivocated on when he first learned of the added allowance for members of the House of Assembly.
Cochrane persisted to his credit.
Williams persisted in his evasion, to his detriment.
Then he switched to excuses: he was a new Premier with huge responsibilities and lots of stuff going on; when he heard about it he never put it in the wage freeze context; he didn't pay attention because it was about compensation and allowances and since he doesn't take a salary, then he didn't feel it right to have input on these things.
A bad story for the Premier just got immensely worse.
The Premier's evasion is done for the same reason as the vague wording in the original minutes of the Internal Economy Commission approving the allowance increase.
The Premier seeks to evade responsibility for his own actions, or in this case his inaction.
His excuses are more revealing of his mindset in seeking to escape responsibility.
The Premier's job is a tough one. It carries weighty responsibilities, not the least of which is to watch over the spending of public money. He has helpers in his task, if he lets them help. But those helpers must receive clear and unmistakable direction. Having worked in the office, your humble e-scribbler can attest to the demands of the office. Having spoken over the years with several premiers, your scribbler is also witness to the weight that sits on the shoulders of each Premier.
None would have offered excuses. The exercise of offering excuses is bad enough; it is the antithesis of leadership and fundamentally, the Premier must be a leader in good times and bad.
Not putting the allowance hike in the context of the freeze is a excuse which - by the Premier's own implication - suggests his judgment is exceedingly poor. How could he not see what everyone else apparently saw at the time and the public knows now? The allowance increase was unnecessary. It was wrong. He should have stopped it when he learned of it. He is the Premier after all.
The third is excuse is perhaps even more serious by implication than the others since it contains a serious misstatement of fact.
Danny Williams, member of the House of Assembly and Premier, collects a salary and draws down on his constituency entitlements and other allowances just like every other member of the House of Assembly and member of cabinet.
It's a matter of fact.
Nothing wrong with it.
He lives entirely within his means and there is no sign of any impropriety on his part.
Danny Williams donates his salary to his own family charity.
That too is a matter of fact.
Nothing wrong with it.
Who better - as Premier, and given his example - than to put a stop to an inappropriate public hand-out done in a sneaky way?
For the Premier to say he turned a blind eye to this allowance since he doesn't collect a salary is to mislead the public on a key aspect of an important issue. One can only believe the Premier does so deliberately since he repeats the same false comment each time he mentions his salary.
The House of Assembly story today took on a much more ominous cast for Danny Williams and it did so as a consequence of the Premier's own comments.
Danny Williams enjoys almost unprecedented public confidence in his forthrightness and integrity. People believe that above all else, Danny Williams will be accountable. That is his reputation.
The essence of accountability is responsibility.
In evading responsibility for not putting a halt to the allowance when it occurred or as soon as he learned of it, in equivocating so miserably on even when he knew, Danny Williams attacked the heart of his credibility and hence his reputation.
Danny Williams forgot the most important lesson of scandal: it is not the action or the inaction - not matter how minor - that causes a downfall.
It is the evasion that kills you in the long run.
__________________________________
Update 2: When did Danny know about the extra cash? Likely May 2004, when it was approved, according to the Telegram front page story in its 03 February edition.
That little morsel wasn't reported by other media.
So the guy who had enough power to order the Internal Economy Commission to let the Auditor General back into the House of Assembly in April 2004 couldn't or wouldn't deal with a bonus stipend right after he froze public sector wages for two years.
Hmmm.
The secretive bonus was effectively hidden from view by a vaguely worded set of minutes from the meeting that approved the retroactive payment.
As for the total overspending by members of the House of Assembly allowances and assistance budget during the two years of the freeze - 2004 and 2005 - well that was hidden by misreporting - deliberately (?) - the spending in the annual budget estimates.
For FY 2004, the government estimates showed spending as dead-on budget even though the entire cabinet knew at the time the account was overspent by $479,000. The next year they misreported the spending, knowing full-well the account was overspent by $557,000
The Auditor General's reports to date have only identified 20% of the overspending for those two years. AG John Noseworthy says his work on overspending is done.
NL subsidiary posts higher profits in Alberta
FortisAlberta, subsidiary of Newfoundland and Labrador-based Fortis Inc announced Friday its profit for 2006 was Cdn$41.1 million, up from $31 million the year before.
The serial government slows further
Since Danny Williams took office in 2003 he's tried to manage the provincial government with everything - literally every little thing - flowing across his desk.
He's a micro-manager for micro-managers.
It shows in everything government does.
Or, to be more accurate what it doesn't do.
Micro-managing something as large as government means it doesn't take too long before your list of unaccomplishments - as Alice might say - is considerably long than your list of accomplishments.
There's plenty of meetings and busy-work and people generating "strategies", like the 20 or so Williams claims to have sitting on his desk right at the moment.
Some of the meetings go for hours, like one on the fishery last week that supposed went on for two or three hours. Smart leaders tell you any meeting longer than 30 minutes is useless.
But hey, it's hard to know for sure because Williams is also a definitebullshitter hyperbole addict. He tells fibs through the colourful use of exaggeration.
And he's a micro-manager.
That's why Bond Papers said that Danny Williams runs a serial government.
He takes everything - and we mean everything - one at a time.
He only has so much time available.
And so things pile up.
No surprise then, that Williams admits the latest bit of the House of Assembly money scandal is clogging the wheels of progress in Danny-land.
it's bound to do that.
God knows what else in his life is taking his mind off the business of micro-managing the living daylights out of a giant organization like government.
That's a government that in the next eight weeks has to:
- wage four by-elections;
- deliver a Throne Speech setting out the policy agenda for the next year;
- figure out what the policy agenda will be for the next year;
- write the Throne Speech, or at least edit it into yet another ear-numbing, soul-eating POS like the others so far;
- finish a budget that will call for more than $5.0 billion in spending and include a capital works program the size of the recent federal infrastructure project;
- wage an ongoing war with Big Oil;
- get ready for a war with Ottawa over hand-outs that are only necessary because of the failure of the war with Big Oil; and,
- cope with money scandals, bimbo eruptions or any other typical political crisis that might emerge - unforeseen - from the darkness.
It's enough to tighten even the tightest sphincter.
And as we know, that just makes the crap back up even more.
He's a micro-manager for micro-managers.
It shows in everything government does.
Or, to be more accurate what it doesn't do.
Micro-managing something as large as government means it doesn't take too long before your list of unaccomplishments - as Alice might say - is considerably long than your list of accomplishments.
There's plenty of meetings and busy-work and people generating "strategies", like the 20 or so Williams claims to have sitting on his desk right at the moment.
Some of the meetings go for hours, like one on the fishery last week that supposed went on for two or three hours. Smart leaders tell you any meeting longer than 30 minutes is useless.
But hey, it's hard to know for sure because Williams is also a definite
And he's a micro-manager.
That's why Bond Papers said that Danny Williams runs a serial government.
He takes everything - and we mean everything - one at a time.
He only has so much time available.
And so things pile up.
No surprise then, that Williams admits the latest bit of the House of Assembly money scandal is clogging the wheels of progress in Danny-land.
it's bound to do that.
God knows what else in his life is taking his mind off the business of micro-managing the living daylights out of a giant organization like government.
That's a government that in the next eight weeks has to:
- wage four by-elections;
- deliver a Throne Speech setting out the policy agenda for the next year;
- figure out what the policy agenda will be for the next year;
- write the Throne Speech, or at least edit it into yet another ear-numbing, soul-eating POS like the others so far;
- finish a budget that will call for more than $5.0 billion in spending and include a capital works program the size of the recent federal infrastructure project;
- wage an ongoing war with Big Oil;
- get ready for a war with Ottawa over hand-outs that are only necessary because of the failure of the war with Big Oil; and,
- cope with money scandals, bimbo eruptions or any other typical political crisis that might emerge - unforeseen - from the darkness.
It's enough to tighten even the tightest sphincter.
And as we know, that just makes the crap back up even more.
Williams to oilpatch: closed until further notice
Danny Williams is confused.
Or maybe Telegram political reporter Craig Jackson is confused.
In the Saturday paper, Danny Williams rants about Hebron, a multi-billion dollar deal that died last year and won't be revived anytime soon.
Danny should know he's not fighting on Hebron because...well...he killed it. Danny just got back from a very expensive hug-fest with the Alberta oil patch. Williams - you may recall - was trying to drum up work for local supply service companies who Williams shafted big time with his shut-down of the local oil industry last year. They had planned on doing work in this province on not one but oil developments.
Now people like Jerry Byrne are stuck with tagging along while Daddy Danny introduces them to Alberta, which is, as Danny put it, the place we want to be when we grow up.
To cap off the rant, Williams apparently then scolded Petro-Canada chief executive Ron Brenneman for pointing out that oil companies have other places to invest their money.
They are about as accurate as the Premier's comments on the secret bonus cash he called the scrum to discuss in the first place. Or for that matter they are about as accurate as a great many things he's been saying these last three years.
But I digress.
If Danny Williams wasn't so busy trying to cover up, paper over and otherwise dodge the mess in the House of Assembly - a mess he is responsible for just like the other forty-odd members of the legislature - Williams would have noticed Petro-Canada investing in places like Norway.
Why?
Let's compare the two places and their offshore:
A. Political Climate
1. Norway: Politically stable, mature democracy.
2. Newfoundland and Labrador: Politically unstable, immature democracy currently embroiled in a spending scandal. While the leader is not implicated directly, he admitted on Friday to condoning secretive bonus payments to legislators. Same leader may have taken cash - which came as a tax-free entitlement - and donated to his family charity.
leader prone to rants. Since shortly after taking office, frequently talks of leaving office due to pressures of work and ingratitude of public.
Admires Hugo Chavez.
B. Regulatory environment
1. Norway: Regulatory authority arms length from government with no conflicts of interest with government policy and taxation arm or state-owned energy companies. A model system often used as an example for the world.
2. Newfoundland and Labrador: Regulatory authority arms length from government with no conflicts of interest with government policy and taxation arm or state-owned oil companies.
Warning: Since taking office, current Premier has been engaged in a series of efforts to bring all regulatory, policy and state-owned energy businesses under his direct control. Actively creates serious conflicts of interest. Attempted to subvert the independence of the regulatory authority by appointing political and ideological ally to senior position. Recently overturned regulatory decision on major project citing "lack of information."
C. Financial
1. Norway: A mature, stable financial environment in which government royalty and taxation is designed to balance government revenue with the need to stimulate exploration and development
2. Newfoundland and Labrador. Total unknown. In Hebron negotiations, Leader suddenly jacked up demands at last minute, after a working agreement was achieved. Gas royalty regime in development for 10 years, currently on hold while leader copes with widening political scandal. State-owned energy company officials recently spoke admiringly of oil and gas regime in developing world dictatorships.
Not surprising that the companies are quickly leaving the local oil patch for somewhere else.
Given the political mess that has been seizing more and more government attention and which on Friday started lapping at the door of the Premier's Office, it will be surprising if the local oilpatch rights itself or is righted any time soon.
Danny Williams is out of touch, overwhelmed and largely incapable of progress on many issues. From his scrum, all he can offer is bluster which sends a clear message to everyone, including Big Oil:
Newfoundland and Labrador's oilpatch is closed until further notice.
Or maybe Telegram political reporter Craig Jackson is confused.
In the Saturday paper, Danny Williams rants about Hebron, a multi-billion dollar deal that died last year and won't be revived anytime soon.
"I'm into a battle with them to make sure that they are not jamming us on the Hebron field," Williams said.If Danny Williams is still in a battle on that one, then he is fighting alone. The oil companies left last year. They won't be coming back, at least as long as the pugnacious, dyspeptic, East Coast satrap is hanging around.
Danny should know he's not fighting on Hebron because...well...he killed it. Danny just got back from a very expensive hug-fest with the Alberta oil patch. Williams - you may recall - was trying to drum up work for local supply service companies who Williams shafted big time with his shut-down of the local oil industry last year. They had planned on doing work in this province on not one but oil developments.
Now people like Jerry Byrne are stuck with tagging along while Daddy Danny introduces them to Alberta, which is, as Danny put it, the place we want to be when we grow up.
To cap off the rant, Williams apparently then scolded Petro-Canada chief executive Ron Brenneman for pointing out that oil companies have other places to invest their money.
"Well, I ask Ron to tell me where he can get a return which gives him, basically, $60 on a $3 cost. That’s a pretty good return," said Williams,...Well for one thing, those figures are not accurate for Hibernia, Hebron or anywhere else in the local offshore.
They are about as accurate as the Premier's comments on the secret bonus cash he called the scrum to discuss in the first place. Or for that matter they are about as accurate as a great many things he's been saying these last three years.
But I digress.
If Danny Williams wasn't so busy trying to cover up, paper over and otherwise dodge the mess in the House of Assembly - a mess he is responsible for just like the other forty-odd members of the legislature - Williams would have noticed Petro-Canada investing in places like Norway.
Why?
Let's compare the two places and their offshore:
A. Political Climate
1. Norway: Politically stable, mature democracy.
2. Newfoundland and Labrador: Politically unstable, immature democracy currently embroiled in a spending scandal. While the leader is not implicated directly, he admitted on Friday to condoning secretive bonus payments to legislators. Same leader may have taken cash - which came as a tax-free entitlement - and donated to his family charity.
leader prone to rants. Since shortly after taking office, frequently talks of leaving office due to pressures of work and ingratitude of public.
Admires Hugo Chavez.
B. Regulatory environment
1. Norway: Regulatory authority arms length from government with no conflicts of interest with government policy and taxation arm or state-owned energy companies. A model system often used as an example for the world.
2. Newfoundland and Labrador: Regulatory authority arms length from government with no conflicts of interest with government policy and taxation arm or state-owned oil companies.
Warning: Since taking office, current Premier has been engaged in a series of efforts to bring all regulatory, policy and state-owned energy businesses under his direct control. Actively creates serious conflicts of interest. Attempted to subvert the independence of the regulatory authority by appointing political and ideological ally to senior position. Recently overturned regulatory decision on major project citing "lack of information."
C. Financial
1. Norway: A mature, stable financial environment in which government royalty and taxation is designed to balance government revenue with the need to stimulate exploration and development
2. Newfoundland and Labrador. Total unknown. In Hebron negotiations, Leader suddenly jacked up demands at last minute, after a working agreement was achieved. Gas royalty regime in development for 10 years, currently on hold while leader copes with widening political scandal. State-owned energy company officials recently spoke admiringly of oil and gas regime in developing world dictatorships.
Not surprising that the companies are quickly leaving the local oil patch for somewhere else.
Given the political mess that has been seizing more and more government attention and which on Friday started lapping at the door of the Premier's Office, it will be surprising if the local oilpatch rights itself or is righted any time soon.
Danny Williams is out of touch, overwhelmed and largely incapable of progress on many issues. From his scrum, all he can offer is bluster which sends a clear message to everyone, including Big Oil:
Newfoundland and Labrador's oilpatch is closed until further notice.
Williams money recall: Lipstick on a pig
Give the Telegram editorialist credit for stating it plainly and correctly.
In Saturday's editorial, the province's largest circulation daily tells its largest daily audience that it just isn't good enough for Danny Williams to ask his fellow politicians to return money now that they were caught getting it.
The payment itself is called "sleazy, dishonest and downright underhanded."
Absolutely.
In Saturday's editorial, the province's largest circulation daily tells its largest daily audience that it just isn't good enough for Danny Williams to ask his fellow politicians to return money now that they were caught getting it.
The payment itself is called "sleazy, dishonest and downright underhanded."
Absolutely.
The current crop of MHAs, rightly or wrongly, are now marked by their behaviour, maybe for the rest of their political careers. And because of that, they should be fully and publicly policed — they may not realize it, but if they had done the same as a civil servant, they would now be fired.Let's see what happens.
02 February 2007
Energy minister displays incompetence...again
Newfoundlanders and Labradorians are growing sadly too familiar with incompetent legislators who sign documents without reading them.
In the case of natural resources minister Kathy Dunderdale, they also know she has some difficulty with information. Google is a concept she never mastered in another portfolio as she insisted her officials would "do the due diligence piece".
Now in what may turn out to be another pissing match between this administration and someone else, Dunderdale has issued a news release and taken exception to the publication on Thursday of documents by the offshore regulatory board related to Hibernia South.
Dunderdale has a right to be embarrassed. Documents released show the inherent falsehood in many of Dunderdale's claims when she vetoed the Hibernia South project conditional approval. It's never nice to have your incompetence displayed in such an open and unequivocal fashion.
For example, Dunderdale claimed the Board's decision removed the province's ability to look after its financial interests. Not true, as the official Decision demonstrates in remarkably plain English. The project could proceed - if and only if - the provincial government was satisfied on matters related to royalties. Similar safeguards existed on benefits and two other issues affecting the long-term exploitation of the Hibernia field.
Dunderdale's veto letter, by contrast was poorly written and highly repetitive. Dunderdale's letter-writer(s) appeared to be grasping for any available excuse to justify a decision taken many months before by her boss.
It is highly unusual for a regulatory board to release information in this way.
However, both Dunderdale and her boss have consistently attacked the competence of the 60 Newfoundlanders and Labradorians protecting the interests of the province at the offshore Board. Their morale has suffered solely as a result of the ignorant comments directed at them either directly or indirectly by the Premier.
In her rejection letter, Dunderdale impugned the Board itself. The Board had little choice but to demonstrate that Dunderdale's attacks on its competence and actions were utterly without merit. The Board released information that might otherwise have been withheld to avoid a repetition of the sorry display of political games played by a former Premier and his energy minister over the Terra Nova project. At that time, Brian Tobin and Chuck Furey blamed the offshore board for decisions they sanctioned.
Bond Papers will have a lengthier post on this issue over the weekend. The only thing Dunderdale made clear in her letter released today, is that she needs to read her own documents rather than affixing her signature to letters dictated for her by others.
In the case of natural resources minister Kathy Dunderdale, they also know she has some difficulty with information. Google is a concept she never mastered in another portfolio as she insisted her officials would "do the due diligence piece".
Now in what may turn out to be another pissing match between this administration and someone else, Dunderdale has issued a news release and taken exception to the publication on Thursday of documents by the offshore regulatory board related to Hibernia South.
Dunderdale has a right to be embarrassed. Documents released show the inherent falsehood in many of Dunderdale's claims when she vetoed the Hibernia South project conditional approval. It's never nice to have your incompetence displayed in such an open and unequivocal fashion.
For example, Dunderdale claimed the Board's decision removed the province's ability to look after its financial interests. Not true, as the official Decision demonstrates in remarkably plain English. The project could proceed - if and only if - the provincial government was satisfied on matters related to royalties. Similar safeguards existed on benefits and two other issues affecting the long-term exploitation of the Hibernia field.
Dunderdale's veto letter, by contrast was poorly written and highly repetitive. Dunderdale's letter-writer(s) appeared to be grasping for any available excuse to justify a decision taken many months before by her boss.
It is highly unusual for a regulatory board to release information in this way.
However, both Dunderdale and her boss have consistently attacked the competence of the 60 Newfoundlanders and Labradorians protecting the interests of the province at the offshore Board. Their morale has suffered solely as a result of the ignorant comments directed at them either directly or indirectly by the Premier.
In her rejection letter, Dunderdale impugned the Board itself. The Board had little choice but to demonstrate that Dunderdale's attacks on its competence and actions were utterly without merit. The Board released information that might otherwise have been withheld to avoid a repetition of the sorry display of political games played by a former Premier and his energy minister over the Terra Nova project. At that time, Brian Tobin and Chuck Furey blamed the offshore board for decisions they sanctioned.
Bond Papers will have a lengthier post on this issue over the weekend. The only thing Dunderdale made clear in her letter released today, is that she needs to read her own documents rather than affixing her signature to letters dictated for her by others.
Did Williams fatten charity with allowance?
Since first confronted with the Auditor General's revelation that members of the legislature took a retro-active bonus in 2004, Premier Danny Williams has contended that it didn't apply to him as he does not take a salary.
His language has grown carefully precise but potentially misleading. Williams states that he did not take or receive the money personally.
Many people, including most reporters, have interpreted this to mean that Williams did not take the money full stop. Williams' publicist told the Telegram the Premier did not use the money - not because he takes no salary - but because, as the Telly attributes the remark, Williams "had sufficient constituency funds available.
The latter comment was made before the rest of us realized or were made aware that the House of Assembly actually had already overspent its budget by $350,000. Rather than provide reimbursement on a case by case basis, the House of Assembly's executive committee - controlled by three of Williams' senior ministers - opted to give everyone a retroactive bonus. The additional $2800 applied to the previous fiscal year and was not issued on the basis of receipted expenses.
On Friday, Danny Williams admitted he learned of the payment sometime after it was approved, but did nothing to stop it until public outrage reached its current peak. Williams' parliamentary assistant and one of his ministers tried to justify the retro-cash with no success on Thursday.
The key point to recall is that Williams in fact does collect a salary and routinely avails of allowances and other stipends from the House of Assembly.
The question to be answered is this: Did Danny Williams not receive the bonus at all or did he take and turn it over to the Williams Family Foundation?
The former is what people have assumed. But we have all made grave errors in doing along with what we assume Danny and others have meant when what they said was actually very different.
The latter would be entirely consistent with the Premier's language and with established practice of donating his salary and stipends to his family charity. It would also explain - more than anything else - why he simply kept his mouth shut about the thing. And too, since he had actually taken the money, it would explain the Premier's reluctance to admit when he knew about the bonus and why it took him three years and the ire of voters across the province to realize the allowance was a bad thing.
The Auditor General knows who got the money and who didn't.
Maybe he'd tell us, if someone asked.
His language has grown carefully precise but potentially misleading. Williams states that he did not take or receive the money personally.
Many people, including most reporters, have interpreted this to mean that Williams did not take the money full stop. Williams' publicist told the Telegram the Premier did not use the money - not because he takes no salary - but because, as the Telly attributes the remark, Williams "had sufficient constituency funds available.
The latter comment was made before the rest of us realized or were made aware that the House of Assembly actually had already overspent its budget by $350,000. Rather than provide reimbursement on a case by case basis, the House of Assembly's executive committee - controlled by three of Williams' senior ministers - opted to give everyone a retroactive bonus. The additional $2800 applied to the previous fiscal year and was not issued on the basis of receipted expenses.
On Friday, Danny Williams admitted he learned of the payment sometime after it was approved, but did nothing to stop it until public outrage reached its current peak. Williams' parliamentary assistant and one of his ministers tried to justify the retro-cash with no success on Thursday.
The key point to recall is that Williams in fact does collect a salary and routinely avails of allowances and other stipends from the House of Assembly.
The question to be answered is this: Did Danny Williams not receive the bonus at all or did he take and turn it over to the Williams Family Foundation?
The former is what people have assumed. But we have all made grave errors in doing along with what we assume Danny and others have meant when what they said was actually very different.
The latter would be entirely consistent with the Premier's language and with established practice of donating his salary and stipends to his family charity. It would also explain - more than anything else - why he simply kept his mouth shut about the thing. And too, since he had actually taken the money, it would explain the Premier's reluctance to admit when he knew about the bonus and why it took him three years and the ire of voters across the province to realize the allowance was a bad thing.
The Auditor General knows who got the money and who didn't.
Maybe he'd tell us, if someone asked.
Friday Follies
This wasn't there last night when Bond posted last night on advertising.
But overnight, this turned up on youtube.com.
It's funny.
But overnight, this turned up on youtube.com.
It's funny.
Hibernia South veto has consequences
Bond Papers linked to the offshore board documents on Thursday, but the Telegram's Moira Baird does a much better job of covering the Hibernia South story here.
The offshore board noted the implication inherent in government's decision - namely that the approvals process would take longer on future projects.
Industry representative Paul Barnes concurs:
The offshore board noted the implication inherent in government's decision - namely that the approvals process would take longer on future projects.
Industry representative Paul Barnes concurs:
"From the industry’s perspective, this will mean it will take longer to get projects approved," said Paul Barnes, Atlantic Canada manager for CAPP in St. John’s.
"This flies in the face of what we’ve been working towards with governments over the last few years in trying to shorten timelines for regulatory approval."
Barnes says the Hibernia South decision erodes efforts to create a "single regulatory window" and increases uncertainty about the rules for Newfoundland offshore developments.
"It’s causing a lot of confusion,” he said. “You’ve got to have certainty around the regulatory regime because it has an impact on who invests here, why they invest and when they invest."
Advertising highs and well...ummm...
For SuperBowl Sunday (now that I know when it is!), here's a spot that remains one of the best SuperBowl spots ever run. This one comes from Pirate Radio and Television, which regular readers of Bond Papers will know is home to Terry O'Reilly's creatively warped cranium. Here's the link to O'Reilly's blog supporting his CBC radio show, Age of Persuasion.
On another level entirely are these spots coming from some pseudonyposter on youtube.com and aimed squarely at the local political market.
These showed up at the Bond e-mail just as they seem to have shown up in a bunch of other inboxes. Despite the fact the first one has had almost 8,000 hits and managed to make both vocm.com and NTV evening news, your humble e-scribbler isn't sure if they are hitting anything other than a novelty.
Nonetheless, here is the latest one: a karaoke version of an old Frank Sinatra song, rewritten to reflect local content.
This kind of guerrilla advertising is likely to spread as the technology to produce video of a reasonable quality grows more accessible.
On another level entirely are these spots coming from some pseudonyposter on youtube.com and aimed squarely at the local political market.
These showed up at the Bond e-mail just as they seem to have shown up in a bunch of other inboxes. Despite the fact the first one has had almost 8,000 hits and managed to make both vocm.com and NTV evening news, your humble e-scribbler isn't sure if they are hitting anything other than a novelty.
Nonetheless, here is the latest one: a karaoke version of an old Frank Sinatra song, rewritten to reflect local content.
This kind of guerrilla advertising is likely to spread as the technology to produce video of a reasonable quality grows more accessible.
Boston "guerrilla marketing" stunt: a dumb idea
The publicity stunt that set Boston police bomb squads hopping on Thursday was not a guerrilla stunt so much as a case of some monkey tossing his own...well, you know.
If convicted, the twotwits misunderstood creative geniuses will fit right in; jails are full of stupid people victims of society.
Successful crooks never get caught.
And smart marketers don't screw up in the first place or compound their error with a totally lame news gaggle in which they talk about "hair" questions.
If convicted, the two
Successful crooks never get caught.
And smart marketers don't screw up in the first place or compound their error with a totally lame news gaggle in which they talk about "hair" questions.
01 February 2007
Alberta oilpatch keen on Norwegian offshore
From CanWest:
Maybe this has something to do with it:
Around here, Danny Williams keeps pointing to the Norwegian example.
Well, apparently he doesn't understand how Norway really works.
Canadian-based companies went to town Tuesday in Norway's offshore oil and gas licensing round, snapping up 13 of 49 parcels offered in the world's third-largest petroleum exporter.Petro-Canada led the way by gaining interests in seven blocks; Nexen Inc. had four and Talisman Energy Inc. came away with two.Half a world away, local analysts said the Norwegian North Sea offers potentially big discoveries for homegrown players operating in a mature oil and gas region....So why aren't they looking at Newfoundland and Labrador?
Maybe this has something to do with it:
Though the state oil company Statoil controls about 60 per cent of the country's production, Norway has been liberalizing its fiscal regime to offset declines and attract new exploration.
Knowles compared it to competition between the governments of Alberta and Saskatchewan to attract drilling dollars in their respective jurisdictions. "The same kind of thing happens between the U.K. and Norway."'
Fuelled by a royalty holiday on new discoveries, the European North Sea has become a hot spot for Canadian companies operating abroad.... [Emphasis added]
Around here, Danny Williams keeps pointing to the Norwegian example.
Well, apparently he doesn't understand how Norway really works.
Army reserve stretched by Afghan mission
Reserve army commanders told the Senate committee on national security that continuing the Afghan mission beyond 2009 will put increased pressure on reserve army units for training and recruiting.
Military family support centres opens in Corner Brook
With the deployment of nine reservists from second battalion of the Royal Newfoundland Regiment, the Gander Military Family Resource Centre is opening an office in the west coast city.
Dunderdale wrong on offshore board and Hibernia South
The Canada-Newfoundland and Labrador Offshore Board today released (click "what's new", once at the CNLOPB site) correspondence between the board and the provincial government on Hibernia South.
In total, the correspondence, including the formal reply to natural resources minister Kathy Dunderdale's letter of January 17, 2007, demolishes every contention by the provincial government on the proposal and on the board's actions.
Among the choice comments: "The Board's Decision [sic] actually goes a step further by requiring that the agreement [commercial agreement among the proponents] be approved by the royalty owner, i.e. the Province, before it will be acceptable to the Board."
That's right: there would have been no production unless and until the provincial government was satisfied on its financial issues.
So much for Dunderdale's spin that she rejected the decision merely to seek "more information".
In total, the correspondence, including the formal reply to natural resources minister Kathy Dunderdale's letter of January 17, 2007, demolishes every contention by the provincial government on the proposal and on the board's actions.
Among the choice comments: "The Board's Decision [sic] actually goes a step further by requiring that the agreement [commercial agreement among the proponents] be approved by the royalty owner, i.e. the Province, before it will be acceptable to the Board."
That's right: there would have been no production unless and until the provincial government was satisfied on its financial issues.
So much for Dunderdale's spin that she rejected the decision merely to seek "more information".
31 January 2007
March Madness starts early
Danny meets with European journalists to talk up the seal hunt.
Q. What do the following have in common?
Anna Nicole Smith
Loretta Swit
Pam Ferdin
Elizabeth Berkley
Danny Williams
A. All use the seal hunt to boost their careers.
Q. What do the following have in common?
Anna Nicole Smith
Loretta Swit
Pam Ferdin
Elizabeth Berkley
Danny Williams
A. All use the seal hunt to boost their careers.
A New Approach to roads maintenance
From the AG's report on government spending and operations:
In 1996, we concluded that the Department was not adequately managing the Province's road system. A decade later in 2006, we have come to the same conclusion.
A make-work slush fund in an unaccountable government?
From the AG's report on a make work program in the municipal affairs department:
Openness, accountability and transparency in an administration that brings a genuinely New Approach to government.
Pull the other one.
Because the Job Creation Program was funded through special warrants and intra-departmental transfers from other programs, there was no opportunity for the House of Assembly to debate and consider funding requirements for the Program. Furthermore, although officials indicated that funding allocation was made by electoral district, there was no documentation available to show how much was allocated to each district or the basis for the allocation.and then this:
There was no documentation in the files outlining the rationale for funding approvals.
Openness, accountability and transparency in an administration that brings a genuinely New Approach to government.
Pull the other one.
AG reports deficit and surplus at same time for same agency
Auditor General John Noseworthy released his comprehensive review of of provincial government spending and management today.
There is some new information about the House of Assembly scandal, including admission for the first time that Noseworthy's review started in January 2006. That's six months before the first public acknowledgement a review was underway. Bond Papers will have more on this in the days ahead, including some comment on Noseworthy's misunderstanding of the provincial constitution.
One curiosity in Noseworthy's summary booklet: in a section on educational spending, Noseworthy suddenly reports on deficits for health care boards:
This is no small discrepancy nor is it an easy cock-up to make. The names of the respective health care and educational authorities are different for one thing. Of course, the report is exceedingly lengthy at some 475 pages but there is a huge staff at the Auditor General's office including a new "information" manager.
There is some new information about the House of Assembly scandal, including admission for the first time that Noseworthy's review started in January 2006. That's six months before the first public acknowledgement a review was underway. Bond Papers will have more on this in the days ahead, including some comment on Noseworthy's misunderstanding of the provincial constitution.
One curiosity in Noseworthy's summary booklet: in a section on educational spending, Noseworthy suddenly reports on deficits for health care boards:
(c) Operating resultsThis produces an odd set of conclusions, since in the section on health authorities, the Labrador-Grenfell board goes from an operating surplus in the section quoted above to an unspecified deficit:
All 5 boards reported operating surpluses for the year ended 30 June 2006 totalling $5.1 million. Operating surpluses ranged from $349,000 for the Labrador-Grenfell Regional Integrated Health Authority to $2.3 million for the Eastern Regional Integrated Health Authority. Because of inconsistent reporting periods resulting from the restructuring of school boards in 2004, comparisons with prior years' financial results would not currently be meaningful. It will be next year before effective and meaningful comparisons can be performed.
During the year, all 4 boards reported operating deficits totalling $11.0 million. Operating deficits ranged from $400,000 for the Western Regional Integrated Health Authority to $5.6 million for the Eastern Regional Integrated Health Authority. One board, the Labrador-Grenfell Regional Integrated Health Authority, reported an annual operating deficit higher than that reported for the fiscal year 2005.Hmmmm.
This is no small discrepancy nor is it an easy cock-up to make. The names of the respective health care and educational authorities are different for one thing. Of course, the report is exceedingly lengthy at some 475 pages but there is a huge staff at the Auditor General's office including a new "information" manager.
Prems cancel meet fearing Equalization "bunfight"
The Council of the Federation meeting on February 7 will now take place via conference call instead of the face-to-face session originally planned.
The official reason is that there were scheduling problems. That doesn't hold water since Premiers were well aware of the meeting well in advance. Scheduling problems wouldn't be eased by a conference call, especially if the agenda was as extensive as previously claimed.
Initial media reports suggest the meeting was cancelled out of concern it would turn into a "bunfight" over Equalization.
In October 2004, Premier Danny Williams - the current chair of the Council of the Federation - stormed out of a meeting on Equalization, ostensibly to express his rejection of a federal proposal on offshore revenues. Other reports suggested the dramatic exit was to avoid - at least in part - criticism from other premiers of his approach.
The official reason is that there were scheduling problems. That doesn't hold water since Premiers were well aware of the meeting well in advance. Scheduling problems wouldn't be eased by a conference call, especially if the agenda was as extensive as previously claimed.
Initial media reports suggest the meeting was cancelled out of concern it would turn into a "bunfight" over Equalization.
In October 2004, Premier Danny Williams - the current chair of the Council of the Federation - stormed out of a meeting on Equalization, ostensibly to express his rejection of a federal proposal on offshore revenues. Other reports suggested the dramatic exit was to avoid - at least in part - criticism from other premiers of his approach.
30 January 2007
Hibernia spat led to better royalty regime
In 2000, the Government of Newfoundland and Labrador vetoed an increase in production rates at Hibernia but subsequently approved the hike based on a better royalty agreement with the operators.
Then-energy minister Paul Dicks delivered a statement on the decision to the House of Assembly on April 10, 2000. In the statement, Dicks said that "[i]f the production increase had been approved, more oil would have been taken from the field at a lower royalty rate. Over the life of the project, this would have negatively impacted royalties to the province."
The production rate increase had been approved by the Canada-Newfoundland and Labrador Offshore Petroleum Board based on an application by the Hibernia operators
One difference between the 2000 decision and recent rejection of the Hibernia South development application is the speed with which government acted. Dicks initiated discussions on the application as soon as the offshore board decision was forwarded to government in early March. No agreement was reached within the 30-day window for approval set under the Atlantic Accord (1985) implementation acts.
In the Hibernia South case, apparently, the provincial government did not initiate contact with the operators nor, apparently, did it raise concerns over incomplete information in the Hibernia application until after the project application was rejected.
The provincial government has still not indicated its goal for Hibernia South. Industry sources suggest the provincial government is seeking to treat the 300 million barrel development as a new project which would involve a new royalty and benefits agreement and a new production platform.
The operators reportedly wanted to bring Hibernia South onstream in 2008 and, as Petro-Canada chief executive Ron Brenneman put it, "step out into the more prolific and better return prospects" while boosting production rates back to 200,000 barrels a day, the rate established in 2004.
In the 2000 disagreement, talks continued beyond the 30 day mark and an agreement was reached that June. Under the new deal - a supplement to the original Hibernia agreement -
Another major difference between the 2000 and 2006 disputes involves project pay out or the point at which the provincial royalty rises to 30% per barrel. In 2000, the provincial government secured a revised royalty regime that allowed the project to pay out around 2011, according to some estimates. Dicks noted in his statements that under the original regime, pay out was unlikely.
In 2000, total reserves at Hibernia were estimated at 1.2 billion barrels, including oil already produced. By 2006, total reserves estimates had reached 1.9 billion, the bulk of which would remain to be produced after pay out.
Treating Hibernia South as a new project would likely restrict provincial royalties to a lesser amount for an indefinite period and might delay pay out on the entire project. A new production platform would not be needed to extract Hibernia South, except in response to a political demand.
____________________
NOTE 1: Bond Papers previously reported that the Hibernia South rejection was the first time a provincial government had overturned a fundamental decision by the offshore board. In fact, it appears to be the second, except for the differences noted above.
NOTE 2: In the ministerial statement, Paul Dicks said: "To date, government is not satisfied that the province is being kept whole." Aficionados will recognize "keep whole" or "kept whole" as a favourite phrase of the current Premier.
Then-energy minister Paul Dicks delivered a statement on the decision to the House of Assembly on April 10, 2000. In the statement, Dicks said that "[i]f the production increase had been approved, more oil would have been taken from the field at a lower royalty rate. Over the life of the project, this would have negatively impacted royalties to the province."
The production rate increase had been approved by the Canada-Newfoundland and Labrador Offshore Petroleum Board based on an application by the Hibernia operators
One difference between the 2000 decision and recent rejection of the Hibernia South development application is the speed with which government acted. Dicks initiated discussions on the application as soon as the offshore board decision was forwarded to government in early March. No agreement was reached within the 30-day window for approval set under the Atlantic Accord (1985) implementation acts.
In the Hibernia South case, apparently, the provincial government did not initiate contact with the operators nor, apparently, did it raise concerns over incomplete information in the Hibernia application until after the project application was rejected.
The provincial government has still not indicated its goal for Hibernia South. Industry sources suggest the provincial government is seeking to treat the 300 million barrel development as a new project which would involve a new royalty and benefits agreement and a new production platform.
The operators reportedly wanted to bring Hibernia South onstream in 2008 and, as Petro-Canada chief executive Ron Brenneman put it, "step out into the more prolific and better return prospects" while boosting production rates back to 200,000 barrels a day, the rate established in 2004.
In the 2000 disagreement, talks continued beyond the 30 day mark and an agreement was reached that June. Under the new deal - a supplement to the original Hibernia agreement -
"The royalty rate will increase above the current two per cent to three per cent earlier. It will then move to four per cent and five per cent after certain cumulative production levels have been reached. This will result in higher royalties than under the time based system,...This method of dealing with royalty rate increases is consistent with Terra Nova and the generic royalty regime in place for White Rose and future offshore projects."Dicks said the original Hibernia royalty agreement remained in place and would "act as a floor to ensure that if production declines, rate increases will occur in any event."
Another major difference between the 2000 and 2006 disputes involves project pay out or the point at which the provincial royalty rises to 30% per barrel. In 2000, the provincial government secured a revised royalty regime that allowed the project to pay out around 2011, according to some estimates. Dicks noted in his statements that under the original regime, pay out was unlikely.
In 2000, total reserves at Hibernia were estimated at 1.2 billion barrels, including oil already produced. By 2006, total reserves estimates had reached 1.9 billion, the bulk of which would remain to be produced after pay out.
Treating Hibernia South as a new project would likely restrict provincial royalties to a lesser amount for an indefinite period and might delay pay out on the entire project. A new production platform would not be needed to extract Hibernia South, except in response to a political demand.
____________________
NOTE 1: Bond Papers previously reported that the Hibernia South rejection was the first time a provincial government had overturned a fundamental decision by the offshore board. In fact, it appears to be the second, except for the differences noted above.
NOTE 2: In the ministerial statement, Paul Dicks said: "To date, government is not satisfied that the province is being kept whole." Aficionados will recognize "keep whole" or "kept whole" as a favourite phrase of the current Premier.
Cable companies expanding phone services nationally
In Newfoundland and Labrador, that means your tax dollars at work.
Fish processing worker background
Some quick references on the issue:
1. An analysis by the Atlantic Institute for Market Studies, 2002. An extract:
1. An analysis by the Atlantic Institute for Market Studies, 2002. An extract:
Newfoundland has almost 140 fish plants, and up to 20,000 fish plant workers. Although some of the plants are highly automated, highly efficient operations that produce year-round. (National Sea's Arnold's Cove plant and Beothuck Fisheries’ Valleyfield plant are examples of a modern year round fish processing industry.) Many of the rest were put there for political reasons, often paid for by tax dollars, an often barely able to give their workers the 420 hours needed to qualify for 34 weeks of employment insurance....2. From 2004, a short news release from then-fish minister Trevor Taylor. An extract:
The pulp and paper industry in Newfoundland has only 60% of its 1972workforce, while the fishplants employ twice as many as they did in 1972. Even the number of loggers is down by almost50%, while the number of fishermen continues to climb. In 1972 the Newfoundland unemployment rate was eight per cent. Since the advent of the "stamp fishery" and easier EI it has averaged between 15 and 20 per cent. A good quarter of that unemployment is directly attributable to the "stamp fishery."
Work at fish plants tends to be short-term in rural areas where employment opportunities are low and unemployment rates are high. The Fish Processing Policy Review Commission, under the direction of Commissioner Eric Dunne (Dunne Report), found that in real terms plant workers' average employment income in the province had declined to $9,660 in 2001. The outlook for plant workers is unclear given that technological innovations continue to reduce the labour demands of the fishing industry.3. A typical Williams administration response, to date. The federal government has followed the same approach.
The Government of Newfoundland and Labrador will provide an additional $2.4 million to assist fish plant workers who will likely not secure sufficient hours to qualify for Employment Insurance. The Honourable John Ottenheimer, Acting Municipal Affairs Minister, today announced the funding to meet employment support needs in the province’s fishery.4. Fishery reports. The problems have been studied - a lot; here are just two.
Williams: is he completely nuts?
It's not like people haven't called him nutty nutty nutbar before.It's not like his behaviour hasn't grown somewhat erratic lately, (think John Hickey in and out of cabinet).
Forget his glee at demolishing the largest fishing company in Atlantic Canada. Is it really a "golden opportunity"?
Now Danny Williams claims that the fish processing sector will collapse within five years if we don't start importing labourers from other countries at high speed.
This is one bizarre claim, given that Williams knows full well the processing industry needs to shed workers at high speed to restore profitability. There are way too many workers chasing too few fish. Wages are dropping. Hours of work are dropping and in some plants work is going begging because it simply isn't worth people's while to drive to another community for the measly few hours work involved.
Don't just believe it because you read it in Bond Papers.
Believe the head of the hunter-gatherers union, Earl McCurdy, who has been busily working to get both the federal and provincial governments to pony up for an early retirement package.
Believe Danny Williams who only last year - that's right - last year was writing to the federal party leaders trying to get their support for yes, an early retirement package for workers. In fact, an early retirement package was the very first thing Williams went looking for from whoever became Uncle Ottawa.
So is he nuts?
No.
By Danny Williams' own account he was caught in a conversation with other premiers and a reporter about immigration. Other provinces are farther ahead in handling the immigration issue.
Around Bond Papers, it looks like he got jammed up in a scrum, felt the need to offer input and in the classic four Yorkshireman way, basically said we'd have to get our immigration act in gear because if we didn't: Armageddon.
Well instead, Danny winds up looking like all his bags were packed and he's ready to go, leaving on a jetplane to Looneyville.
And for those who think we will wind up importing Bulgarian fishwomen like they've done in the Martimes - just because they've done it in the Maritimes - think again.
They don't have the humongous surplus of capacity we do. The numbers vary but Bond Papers can find people who will tell you that we can actually produce a thriving industry with merely 10-20% of the 100+ fish processing plants dotted around the island portion of the province.
Fewer than 20 plants.
If the early retirement thing works, there will be negligible demand for labour beyond what can be supplied by the local labour market.
Now comes the tricky part.
If the provincial government would get out of the way, the fish processing sector could sort itself out and find new markets and new production ideas that require fewer workers.
Unfortunately the current provincial fish minister [right] thinks he's still in the 1980s. He busily piles on regulations designed to frustrate the marketplace, drive up costs, and in the case of Fishery Products International keep the economic pressure on a company that would have righted itself long ago were it not for the provincial government's neglect or as one suspects, outright mischief.No, Danny is not nuts.
Well, not drooling on himself, need a straight-jacket, barking like a dog, hearing voices, up his meds kinda nuts.
Danny Williams just has this habit of pulling things out of any available orifice when he feels the need. When Danny gets caught
Sadly, in this farce, the Premier has enablers: like Paul Oram, his current parliamentary assistant, who seems to have no function other than laud the Premier's magnificence in hopes that the Premier will elevate Oram to a cabinet stipend.
Sometimes it works. Sometimes, as in this instance, it doesn't. We are now in Day Two of Immi-gate and already we have the provincial fisheries department saying it has no studies on labour demands in the processing sector, even though Williams claimed to have read said studies.
And the story of the serious questions about the Premier's
Ooops.
The story likely won't last past today, however. There is always something else around these parts and tomorrow it will be the Auditor General's latest overall review of government spending.
Meanwhile, the fishery problems will slip back into the gloom, taking with it the thousands of men and women who continue to languish.
29 January 2007
Home is where the money is
The Fort Mac take on the recent trek by four Atlantic premiers.
While one woman in the crowd complained she was forced to move to Fort McMurray 10 months after the Abitibi paper mill closed in Stephenville, N.L., another transplanted Newfoundlander said he has no desire to return home.
‘‘I think they should go to Newfoundland with empty buses and bring them up here,’’ said Lee Perkins, who’s now in charge of Fort McMurray’s water and sewer lines.
‘‘I’m easily doubling my pay here, and where my university-educated wife and I were working back home, someone had to die or retire for us to move up in our jobs,’’ Perkins said.
Lower Churchill: old news makes news
CBC Radio is quoting a mainland analyst that exporting Lower Churchill power will likely mean an upgrade (expansion) of the electrical power grid in Quebec.
Nothing new in that.
As Bond Papers noted in August 2006, the joint Ontario/Quebec proposal to work with Newfoundland and Labrador on the Lower Churchill included upgrading the transmission capacity across Quebec as well as upgrading the inter-provincial connection. The latter cost, in particular, was to be borne by Ontario and Quebec.
As noted by Bond at the time, all those costs - known and predictable at the time the Premier decided to "go-it-alone" - will now be borne by Newfoundland and Labrador Hydro.
The other option - the $2.0 billion plus underwater route - is apparently also under consideration, as CBC reports in a comment from provincial natural resources minister Kathy Dunderdale.
About the only way to deal with this issue and thereby allow the Lower Churchill power to get to market at competitive prices is to get the federal government to underwrite the costs somehow. In October 2006, Bond Papers pointed out that the federal government wasn't interested in loan guarantees for the Lower Churchill, despite what the Premier claims. Rather, the federal interest- if they have any at all - would be in taking an equity stake.
Nothing new in that.
As Bond Papers noted in August 2006, the joint Ontario/Quebec proposal to work with Newfoundland and Labrador on the Lower Churchill included upgrading the transmission capacity across Quebec as well as upgrading the inter-provincial connection. The latter cost, in particular, was to be borne by Ontario and Quebec.
As noted by Bond at the time, all those costs - known and predictable at the time the Premier decided to "go-it-alone" - will now be borne by Newfoundland and Labrador Hydro.
The other option - the $2.0 billion plus underwater route - is apparently also under consideration, as CBC reports in a comment from provincial natural resources minister Kathy Dunderdale.
About the only way to deal with this issue and thereby allow the Lower Churchill power to get to market at competitive prices is to get the federal government to underwrite the costs somehow. In October 2006, Bond Papers pointed out that the federal government wasn't interested in loan guarantees for the Lower Churchill, despite what the Premier claims. Rather, the federal interest- if they have any at all - would be in taking an equity stake.
A view from Labrador West
Well, so much for spelling your humble e-scribbler's name correctly.
But at least people are reading.
For the record, here's the original post. Note the update which gives a much less speculative version of things.
Also, here's a chunk of your humble e-scribbler's e-mail to the Aurora's editor in response to the editorial:
But at least people are reading.
For the record, here's the original post. Note the update which gives a much less speculative version of things.
Also, here's a chunk of your humble e-scribbler's e-mail to the Aurora's editor in response to the editorial:
Information from people expert in mines and the issues involved with mines like Scully leads me to believe that the liabilities associated with an aging mine relatively close to shutdown may have led CT to make its decision. Those liabilities are largely undefined but one can readily imagine what they might be.
They might include long-term power costs but they might also involve liabilities related to the shut down of existing operations.
Taken altogether, a company like CT would make an informed decision on whether or not to purchase an existing operation and bring onstream deposits from across the border in Quebec. While the company would not - understandably - discuss specifics, we can get a good idea if we use a little imagination and some informed speculation.
That said, I certainly wouldn't suggest anyone in Labrador west to to take a pessimistic outlook on the future. There is plenty of potential including Bloom Lake. We will all have to wait as the companies involved or potentially involved sort out their plans. CT's announcements shouldn't be seen as a setback, but merely as the companies working through options. In the announcement, CT indicated - and I take it at face value - that they are continuing to explore options. As long as that continues there is reason for hope, and for continued prosperity in one of the strongest economic regions of our province.
A sign of the economic decline
In the midst of Danny Williams' rhapsodizing to The Telegram today (not available online) about how good everything supposedly is in the province, comes this comment:
Now the Premier is talking about achieving that target in 2017 or 2018.
Maybe.
So what changed in the past 18 months?
"We could be contributors to (federal) equalization within a decade. And, we have also been using our wealth to make strategic investments in education, health care, infrastructure and poverty reduction."Only a year or so ago, economists like Wade Locke were talking about Newfoundland and Labrador getting off Equalization - that is, become a "have" province - around 2007 or 2008.
Now the Premier is talking about achieving that target in 2017 or 2018.
Maybe.
So what changed in the past 18 months?
Every bit helps, shurely
Danny Williams didn't waste any time issuing a "news" release proclaiming his trip to Alberta a great success.
Don't look for anything concrete mind you, like a contract.
Nope.
The oil industry in Alberta is looking forward to their buy-sell forum in March which, incidentally, is where NOIA will be focusing much its energy on behalf of its members. NOIA likely figured out that junkets usually don't produce much except the palaver seen thus far.
Danny didn't include NOIA in his entourage for some unfathomable reason.
But I digress.
Speaking of vacuous comment devoid of meaning, though, the official government release quotes a representative of Production Services Network:
Don't look for anything concrete mind you, like a contract.
Nope.
The oil industry in Alberta is looking forward to their buy-sell forum in March which, incidentally, is where NOIA will be focusing much its energy on behalf of its members. NOIA likely figured out that junkets usually don't produce much except the palaver seen thus far.
Danny didn't include NOIA in his entourage for some unfathomable reason.
But I digress.
Speaking of vacuous comment devoid of meaning, though, the official government release quotes a representative of Production Services Network:
"I was very pleased to meet with the business and community leaders of Edmonton and Fort McMurray to discuss ways we can help each other grow our businesses," said Roger Clarke of Production Services Network. "I believe that this mission will provide long term benefit to our company, the oil and gas industry of Newfoundland and Labrador and the economy in general. I thank the Government of Newfoundland and Labrador for this opportunity."Great company with tons of expertise both here and abroad, but it isn't like a former division of Halliburton needs Danny Williams to introduce the company to the oil business.
Turning the clock back on economic development
Q: What's the distance from Newfoundland and Labrador to Alberta?
A: 40 feet.
That's the length of a standard shipping container.
With the slowdown of the oil industry offshore Newfoundland and Labrador, grace a M. Williams, the local supply and service industry association organized a workshop. NOIA has continued to work steadily on promoting the business connections between this province and Alberta. There was a scouting mission in December and there is another workshop coming in March.
Interesting to see in the news coverage from the trek by four Atlantic provincial premiers to Alberta this past week, there were few mentions of the companies the four wise ones were supposedly there to promote.
Well, there is reference in stories about New Brunswick but not much about Newfoundland and Labrador. Stories about this province, like this one from the Edmonton Sun, talk about the potential that will come eventually from industrial development in the easternmost province.
And reading Danny Williams' comments, you'd think were were in 1977 or maybe 1982, listening to Brian Peckford painting pictures of future glory. But those were the days long before there actually was an oil industry in Newfoundland and Labrador.
The problem for Danny Williams is that the oil industry he inherited in 2003 was well-developed, not the green field he seems to imagine it was. Expertise abounds in the local oil patch in everything from the engineering and other supply and service industries to the geologists, engineers and other at the offshore regulatory board. They know the industry here and abroad. Many of the local companies have parleyed their local experience into solid working relationships with the oil majors - Big Oil - and into contracts in the Gulf of Mexico and in central Asia among other places. Even Danny's own company has been known to work overseas for ExxonMobil.
All thanks to the oil and gas industry in the province that was well developed by the time Williams got to the Premier's Office.
In 2003, the local oil industry could look forward to Hebron: $2.0 billion in construction work, the bulk of it coming to this province through the small gravity-base structure the proponents had already selected as the mode of production. They looked at about $10 billion in revenue for the provincial government with - inevitably - more to come from development of adjacent fields.
By 2005/2006, those same companies were looking forward to development of Hibernia South. Even with a limited additional construction work if the companies used tiebacks to produce the oil, there would be tons of other work and a longer life for Hibernia.
According to the most recent statistics from the Canada-Newfoundland and Labrador Offshore Petroleum Board, the addition of the possible and probable reserves at Hibernia would give the project another 20 years of life.
And for the provincial government the bulk of that production would come at a time when provincial royalties would leap from 5% to 30%. The cash for the provincial treasury? Probably as much as Hebron.
Not any more.
Overnight in April 2006, the oil industry in Newfoundland and Labrador went from looking forward to staggering growth to being staggered by the virtual shutdown of activity. Sure, oil will continue to flow and the provincial government coffers will be stuffed with oil money. But at Hibernia, work is already slowing down thanks to government's decision - apparently taken when the Hebron talks failed - to veto any further development.
In early 2006, a company involved in industrial development in Newfoundland and Labrador could look forward to an almost unprecedented series of major work projects. Hebron, then the Long Harbour smelter. Hibernia South tossed in for good measure. As the construction phase of each of those slowed, the Lower Churchill would be running up. A steady period of growth lasting from 2006 up to 2015.
In place of that, there is now nothing but promises of future glory. Strange promises too, since Danny Williams seems to think that all the projects in the slings are being actively pursued. Almost every news story coming from Alberta this past week talked about projects in this province that don't actually exist.
Strange promises, given the very first sentence of the famous Danny Williams plan for Newfoundland and Labrador said that "[o]ur goal is to grow our economy and provide new job opportunities for Newfoundlanders and Labradorians."
There was no mention of resetting the province's economic development clock to 1984.
A: 40 feet.
That's the length of a standard shipping container.
With the slowdown of the oil industry offshore Newfoundland and Labrador, grace a M. Williams, the local supply and service industry association organized a workshop. NOIA has continued to work steadily on promoting the business connections between this province and Alberta. There was a scouting mission in December and there is another workshop coming in March.
Interesting to see in the news coverage from the trek by four Atlantic provincial premiers to Alberta this past week, there were few mentions of the companies the four wise ones were supposedly there to promote.
Well, there is reference in stories about New Brunswick but not much about Newfoundland and Labrador. Stories about this province, like this one from the Edmonton Sun, talk about the potential that will come eventually from industrial development in the easternmost province.
And reading Danny Williams' comments, you'd think were were in 1977 or maybe 1982, listening to Brian Peckford painting pictures of future glory. But those were the days long before there actually was an oil industry in Newfoundland and Labrador.
The problem for Danny Williams is that the oil industry he inherited in 2003 was well-developed, not the green field he seems to imagine it was. Expertise abounds in the local oil patch in everything from the engineering and other supply and service industries to the geologists, engineers and other at the offshore regulatory board. They know the industry here and abroad. Many of the local companies have parleyed their local experience into solid working relationships with the oil majors - Big Oil - and into contracts in the Gulf of Mexico and in central Asia among other places. Even Danny's own company has been known to work overseas for ExxonMobil.
All thanks to the oil and gas industry in the province that was well developed by the time Williams got to the Premier's Office.
In 2003, the local oil industry could look forward to Hebron: $2.0 billion in construction work, the bulk of it coming to this province through the small gravity-base structure the proponents had already selected as the mode of production. They looked at about $10 billion in revenue for the provincial government with - inevitably - more to come from development of adjacent fields.
By 2005/2006, those same companies were looking forward to development of Hibernia South. Even with a limited additional construction work if the companies used tiebacks to produce the oil, there would be tons of other work and a longer life for Hibernia.
According to the most recent statistics from the Canada-Newfoundland and Labrador Offshore Petroleum Board, the addition of the possible and probable reserves at Hibernia would give the project another 20 years of life.
And for the provincial government the bulk of that production would come at a time when provincial royalties would leap from 5% to 30%. The cash for the provincial treasury? Probably as much as Hebron.
Not any more.
Overnight in April 2006, the oil industry in Newfoundland and Labrador went from looking forward to staggering growth to being staggered by the virtual shutdown of activity. Sure, oil will continue to flow and the provincial government coffers will be stuffed with oil money. But at Hibernia, work is already slowing down thanks to government's decision - apparently taken when the Hebron talks failed - to veto any further development.
"But the goal is to stagger the projects so people don't have a job for 18 months and then have to turn around and leave the province again," Williams added.That was the goal, or at least the expectation.
In early 2006, a company involved in industrial development in Newfoundland and Labrador could look forward to an almost unprecedented series of major work projects. Hebron, then the Long Harbour smelter. Hibernia South tossed in for good measure. As the construction phase of each of those slowed, the Lower Churchill would be running up. A steady period of growth lasting from 2006 up to 2015.
In place of that, there is now nothing but promises of future glory. Strange promises too, since Danny Williams seems to think that all the projects in the slings are being actively pursued. Almost every news story coming from Alberta this past week talked about projects in this province that don't actually exist.
Strange promises, given the very first sentence of the famous Danny Williams plan for Newfoundland and Labrador said that "[o]ur goal is to grow our economy and provide new job opportunities for Newfoundlanders and Labradorians."
There was no mention of resetting the province's economic development clock to 1984.
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