EOD.
Paul Wells has been waging a valiant, if seemingly futile campaign to diffuse the Gomery testimony story, criticize the media use of the word "explosive" when discussing it, and drag the whole discussion onto something less prurient. I use the term advisedly, given that some people seem to derive a strange fetishistic state of arousal these days when the word Gomery is used. Use your imaginations.
So today he just links to all the media outlets still describing testimony last week before Justice Gomery as being explosive.
Paul makes a valid point, and one apparently not lost on one Stephen Harper. His sound bite for today (left over from yesterday) has been about the need to find a new message for Quebeckers besides corruption or separation. He tosses this one on the table in discussing the prospect the Cons will vote to defeat the government on a Bloc non-confidence motion due next week.
Anyway, those with long memories will chuckle at the idea of Conservatives, progressive or otherwise, presuming to lecture on the need for a new message for Quebec.
Anyway, while Paul is tackling the intellectual road, let's wander over to the one I sometimes travel, namely the low road of sarcasm and ridicule.
What kind of explosive is this Gomery testimony, one might inquire of the scribblers busily recycling their Gomery phrases for outlets like the Sun chain, the Globe and even Reuters.
There a nuclear explosions that kill everything and leave the landscape uninhabitable for centuries. Personally, I'd suggest Paul's upcoming essay is going to lean to the idea that the whole Gomery tesitmony discussion is of the nookyoolur explosion kind. Self-frickin immolation. And without the black humour of Dr. Strangelove.
There are plain old high explosives which kill everything within a certain radius from the blast and injure dozens more. Possibility. I could buy that interpretation potentially.
There is a fuel-air explosion, in which gas fumes seep into every crack and then get ignited. Big bang. Lots of flame and much scorching.
This should not be confused with napalm, which is one of the genuinely nastiest kinds of explosions there is. Opposition types might like Gomery to be napalm dropped on the bastions of the Liberal Party. Tends to produce something called crispy critters.
But being a father of two children both of whom were breast-fed, the only word I viscerally associate with "explosive" is a bowel movement.
I still remember the look on my father's face as he held his first grandchild just as Number One Son of Number One Son did what nature intended. Big noise. Distressing motion inside the diaper and the house. Foul odor. Severe look of concern on Grandpa, who had little experience with these things and thought something truly hideous was about to occur. But it was quickly wiped up and life went on. The grown-ups went back to talking about something they needed to worry about while other processes worked as they should.
Far be it from me to drag this little metaphor all the way into the depths to which one could go. Heck it may be a totally unworkable metaphor. Suffice to say that political dialogue nationally has sunk to what amounts to little more than the results of my son's feasting. Big noise. Distressing motions in the House. Really bad smell. Look of concern.
But ultimately, this matter will wind up in a bin somewhere.
And while we are paying attention to the noise, some major issues we should be worried about - like the ones Paul will likely raise - are going unattended.
If the guys in Ottawa are dumb enough to blunder into an election over this load, I'd wager that the electorate will reward them appropriately.
For the love of heaven and the country, will some politician in Ottawa please start talking about major national issues?
Let the courts and police and the Gomery Inquisition do their jobs.
Maybe it's the fear of the diaper pail that has Mr. Harper changing his tune today.
Or maybe Paul's pleadings are finally penetrating someone's skull.
07 April 2005
Who'd waste the ammo?
Bullets are expensive these days.
That's why this little news story looks more like headline grabbing sensationalism than a serious decision taken based on a thorough threat assessment.
With the exception of Martin Sheen, who did a little ad for Paul Watson's crowd, pretty well every "celebrity" I have seen working the PETA/IFAW circuit lately has been a has-been more likely to turn up on some abysmal cable-tv reality show than in a movie anyone has paid money to see.
Like Elizabeth Berkley. Without exception, the movies listed on her IMDB entry are ones I have never seen and will never see because, to put it bluntly, they suck. Liz may be busier than the guy who played Screech, but I bet he has a steady paycheque that doesn't involve boring audiences to death.
As for Anna Nicole Smith from the link above, I would have pitched the story as an environmental one. Out of fear that a stray bullet at the ice flows would release industrial quantities of silicone, Anna is staying away so she doesn't harm the cuddly baby seals.
More plausible, for one thing.
I am starting to think that the people who book acts for Mile One use the same agency that finds celebs for Paul Watson.
Look guys, Frank Gorshin is still available.
As is Charles Napier.
ditto Expendible Crewman Number 3 from "Space Seed".
And Tiffani Thiessen.
Oh wait.
Maybe not: check out the picture gallery. Is that a real fur barely covering her ample and perchance artificially enhanced assets?
At least Tiff is a "Saved by the bell" alumna with her own website.
That's why this little news story looks more like headline grabbing sensationalism than a serious decision taken based on a thorough threat assessment.
With the exception of Martin Sheen, who did a little ad for Paul Watson's crowd, pretty well every "celebrity" I have seen working the PETA/IFAW circuit lately has been a has-been more likely to turn up on some abysmal cable-tv reality show than in a movie anyone has paid money to see.
Like Elizabeth Berkley. Without exception, the movies listed on her IMDB entry are ones I have never seen and will never see because, to put it bluntly, they suck. Liz may be busier than the guy who played Screech, but I bet he has a steady paycheque that doesn't involve boring audiences to death.
As for Anna Nicole Smith from the link above, I would have pitched the story as an environmental one. Out of fear that a stray bullet at the ice flows would release industrial quantities of silicone, Anna is staying away so she doesn't harm the cuddly baby seals.
More plausible, for one thing.
I am starting to think that the people who book acts for Mile One use the same agency that finds celebs for Paul Watson.
Look guys, Frank Gorshin is still available.
As is Charles Napier.
ditto Expendible Crewman Number 3 from "Space Seed".
And Tiffani Thiessen.
Oh wait.
Maybe not: check out the picture gallery. Is that a real fur barely covering her ample and perchance artificially enhanced assets?
At least Tiff is a "Saved by the bell" alumna with her own website.
Blarney and buds threaten province's future
Blarney the Dinosaur from Up the Shore is at it again, according to a VOCM story posted this morning. This little news outlet deserves an award for saying the most with the least number of words:
"St. John's South-Mount Pearl MP Loyola Hearn [known to many as Blarney] says the Liberal government is using the longest possible route to approve the Atlantic Accord. [Blarney] Hearn suggested it would take only minutes to rework the accord."
Ok.
Not to really Harp-er on this but the Atlantic Accord was signed and approved in the 1980s, Blarney. I know it was back in the Cretaceous period of your political career, Blarney, but surely you remembered bobbing up and down in your seat to vote for that piece of paper Brian Peckford (your boss at the time) was waving around?
What is currently in front of the Commons is a budget-related bill authorizing the federal government to hand over cash to this province under certain conditions. It is closely related to most of the other provisions of Bill C-43. Except for the ones upsetting Blarney and his friends.
And that's where Blarney's comments start to look like what they are: coprolites.
The federal government has already agreed to drop the Kyoto provisions of Bill C-43 that have Blarney and his carbon dioxide exhaling pals emitting higher than usual levels of both CO2 and fossilized fecal matter.
So what happened when the "crisis" looked like it was about to be solved?
Blarney and his buds decided that basking in the warmth of the media sun was worth more to Opposition than actually doing the job they get paid to do. Count the number of mentions of Conservative politicians this weekend versus say when they had their big policy convention.
Except for Peter Mackay's hysterically funny comments on betrayal, the whole weekend was like a policy Ice Age - no idea worth talking about could survive the "No Controversy" chill from Harper and his cohorts.
So people fell asleep.
Only to be re-awakened by one of the most contrived "crises" since the last "conspiracy" spotted by our Premier.
And every day Blarney and his buds shag around with this issue, they are threatening the province's financial future.
If they actually had anything of merit to talk about, they would be saying it.
That they spend all their time pointing fingers at other people should be a big clue as to what Blarney and his gang are really saying not about the Libs but about themselves.
"St. John's South-Mount Pearl MP Loyola Hearn [known to many as Blarney] says the Liberal government is using the longest possible route to approve the Atlantic Accord. [Blarney] Hearn suggested it would take only minutes to rework the accord."
Ok.
Not to really Harp-er on this but the Atlantic Accord was signed and approved in the 1980s, Blarney. I know it was back in the Cretaceous period of your political career, Blarney, but surely you remembered bobbing up and down in your seat to vote for that piece of paper Brian Peckford (your boss at the time) was waving around?
What is currently in front of the Commons is a budget-related bill authorizing the federal government to hand over cash to this province under certain conditions. It is closely related to most of the other provisions of Bill C-43. Except for the ones upsetting Blarney and his friends.
And that's where Blarney's comments start to look like what they are: coprolites.
The federal government has already agreed to drop the Kyoto provisions of Bill C-43 that have Blarney and his carbon dioxide exhaling pals emitting higher than usual levels of both CO2 and fossilized fecal matter.
So what happened when the "crisis" looked like it was about to be solved?
Blarney and his buds decided that basking in the warmth of the media sun was worth more to Opposition than actually doing the job they get paid to do. Count the number of mentions of Conservative politicians this weekend versus say when they had their big policy convention.
Except for Peter Mackay's hysterically funny comments on betrayal, the whole weekend was like a policy Ice Age - no idea worth talking about could survive the "No Controversy" chill from Harper and his cohorts.
So people fell asleep.
Only to be re-awakened by one of the most contrived "crises" since the last "conspiracy" spotted by our Premier.
And every day Blarney and his buds shag around with this issue, they are threatening the province's financial future.
If they actually had anything of merit to talk about, they would be saying it.
That they spend all their time pointing fingers at other people should be a big clue as to what Blarney and his gang are really saying not about the Libs but about themselves.
06 April 2005
Talking like an oil techie
Here are some links to sites that describe different types of crude oil.
First, we have Platt's Oil Guide which gives a general description of crude types from around the globe. Note especially the API gravity for each type. The bigger the number, the lighter the crude and hence the ease with which it can be refined into a wide range of consumer products.
Second, here is a link to Hibernia and Terra Nova crude specifications. Go back and compare the stuff from these wells with other crude types.
First, we have Platt's Oil Guide which gives a general description of crude types from around the globe. Note especially the API gravity for each type. The bigger the number, the lighter the crude and hence the ease with which it can be refined into a wide range of consumer products.
Second, here is a link to Hibernia and Terra Nova crude specifications. Go back and compare the stuff from these wells with other crude types.
Hebron development in context (updated)
There is plenty of rejoicing at the news today from the Hebron consortium that the partners are closer to filing a development application. They have an agreement among themselves on a bunch of things.
There are a few more steps to go and, as David Cochrane reported on CBC Radio this afternoon it could be 2012 before we see first oil. Next we should see a development application (if I understand correctly) which will include local benefits proposals, a development mode and all the things necessary to start hearings.
The Premier is suitably excited, although he cautioned the proponents, led by Chevron Canada, that the province will expect improved benefits over previous developments. He singled out royalties, local construction and supply and secondary processing (read refining).
Ok. We'll let's just take a step back and look at some issues that will affect the outcomes.
First let's see what overall circumstances affect the context of these upcoming talks.
1. The provincial energy minister has control over approval since the security of supply provisions of the Real Atlantic Accord are satisfied. You can find the Real Accord along with a ton of other useful information on the regulatory process at the Canada-Newfoundland Offshore Petroleum Board website.
2. High oil prices forecasted to last well into the future make this a viable project with less of the fear of it being "marginal" like Hibernia was considered to be. There won't be any demand for government loans and loan guarantees.
3. The provincial government has bags of cash and no fear of sudden financial ruin. As a consequence, there is much less pressure to sign a good deal when something slightly better might be attainable. The Premier can slag Grimes for trying to entice the Hebron consortium a few years ago, but he should be fair in his comments. He has a distressing tendency to play a game of "neener-neener-neener" with public policy issues. Danny Williams has benefited from improved overall circumstances, not necessarily his superlative management skills, his spin machine to the contrary.
Put the two situations in context; make a fair comment. Personally, I learned a long time ago to walk a mile in someone else's shoes or face a genuinely tough situation before I start to pat myself on the back. There are times when Danny Williams' comments sound a lot like: "There'll be no more of this sun going down thing in the daytime while I am here. I won't be repeating the same sunshine mistakes of that guy who was here on the night shift, giving away our precious solar resource and settling for too much blackness."
4. In Hibernia, the province pushed the expensive GBS platform on the companies, driving up costs on an expensive project. That led directly to decreased government revenues in the long-term as companies sought offsets.
5. In this case, the proponents are already favouring a smaller GBS. They can't build that anywhere - the closer to the site the better - therefore the companies themselves have automatically boosted local industrial benefits as part of their start-up calculations. The government doesn't have to say a word to automatically start out with greater benefits than previous projects.
Expect to see the GBS built at Marystown where the private-sector yard is efficient. Bull Arm might get the work but here's hoping the companies resist working with a Crown-owned entity. Better for government to dispose of Bull Arm to the private sector, otherwise, the companies are likely to drive some hard - and I mean hard - bargains to guarantee quality of work, low costs and firm timeline guarantees.
6. Note that the Hebron GBS is preferred because of the conditions of the field involved. Comparing Hebron to Terra Nova or White Rose is a foolish, specious comparison. Danny Williams can claim that previous governments didn't ask for enough but the truth is something different.
7. In the broader context, look cautiously at what the province may be cooking up in its idea of a new Crown-owned energy mega-corporation or Crown-owned oil company.
8. Background and technical stuff: If you flip back to the archives there are some posts with links to some background information on the offshore and other oil issues.
- The US government Annual Energy Outlook 2005, with forecast to 2025 covers every source of energy on which the US depends. Here's the link.
- Here's an assessment of the value of the Hebron field from Chevron Canada analyst Deborah Provais.
- If you want to understand what API is and the implications, try this link. Go here before you read the Chevron assessment to get a full appreciation of what the oil look like in the Hebron field.
Second, let's look at the Premier's comments on enhanced local benefits. Premier Williams singled out three ways to increase benefits and basically the first two are the ways one would normally expect to see benefits flowing.
Royalties: By negotiating a special royalties deal, the Premier would be throwing away the generic royalty regime which is actually competitive in the marketplace and produces significant cash benefits for the province. Terra Nova is paying off early and moving to higher levels of benefits under the existing regime. Expect White Rose to do the same, much to the benefit of the province.
Incidentally, the only deal that is really less lucrative for the province as a whole than was expected is the Peckford Hibernia deal. Note that all the people whining are the people responsible for that mess; all the people blaming the Liberals for lousy deals on Terra Nova and White Rose are people like Brian Peckford. Let's just say they have an interest in deflecting attention away from their progeny.
In turn , they will point out that Hibernia was signed by the Wells government, but I am here to tell you it was largely done by the time Wells came along. Peckford had already forced the GBS on the proponents and bargained away the royalties.
Turning back to the current situation, there is a possibility of enhancing the royalty regime. But, and this is a big but, putting royalties in play allows for a Peckford-style trade off of cash for jobs. Keep your eye on that ball to see what actually happens.
Local Supplier Benefits/Construction: Watch for a few things here.
As noted, we are likely to get increased industrial benefits in the province due to GBS construction before Danny Williams lifts a finger. We might lose some cash along the way if Bull Arm becomes the construction site and we fail to meet cost, performance and quality targets through the Crown-owned site. There are a bunch of factors that will impact on the final contract. Let's take this deal (or lack of a deal) on its merits, based on facts.
Look for NOIA, the local supplier association, to start pushing for the Premier to insist that local companies get first look at supply work based on geography moreso than competitiveness. They have pushed for this approach on the past two projects and gotten nowhere fast.
In the offshore revenue struggle, NOIA gave Ottawa the finger and fawned over the Premier in the hopes of achieving some unspecified goal. Danny Williams owes them something or I am sure they feel he does. If he spurns their advances, NOIA will be "oh" for three on boosting local participation in the industry through government policy.
Personally I think NOIA does its members a bit of a disservice when it comes to government relations, but hey, I don't pay NOIA membership dues.
Paging John Shaheen! The Peckfordites long dreamt of a massive petrochemical industry here, turning Newfoundland and Labrador into a cross between the Persian Gulf and Alberta. It was more like a grander version of Come by Chance but fortunately for taxpayers pockets, reality was indeed another concept.
Not too surprising therefore that the Tory's last Blue Book resurrected every old hope of an oil refinery on the site of every old fish plant.
Here's where things could get really curious.
Heavy crude, like the stuff coming from Hebron, requires some expensive and complex refining unless you want to produce something really simple like asphalt. In the current marketplace and in the near-term, we can expect to see increasing pressure to maximize the refining of even heavy crude so that it produces as much petrol and other "light" products as possible.
Refining capacity is growing again, after many years of sluggishness and a surplus capacity in the 1980s. The most rapid growth is in Asia according to US government forecasts, while in the US, where the largest capacity exists, emphasis is on increasing capacity at existing operations and making them much more efficient.
There is a shortage of heavy crude refining capacity. The Saudis have the oil. The problem is there is such a shortage of capacity that the Saudis have actually had to sell the grades of heavy crude at deep discounts in recent months. There is plenty of oil and a sluggishness in the development of capacity to handle heavy crude.
In general though, there is much international interest in refineries that are located close to major markets. That's a key point here: close to markets. Venezuela's state-owned oil company operated refining capacity in the southern US, the Kuwaitis bought refineries and gas stations across Europe and most recently Russia's major oil company has expanded its refining and distribution systems.
But they did it right at the doorstep of the market. The big reason I would point to is the relatively high cost of refining heavy crude compared to lighter oil like the stuff from Hibernia. Heavy crude is expensive to extract and expensive to refine. It attracts a lower per barrel price as a consequence so it has some unique cost issues. Put the refinery on the North American mainland and it is merely a railcar journey or pipeline trip away from a major market or distribution node.
Building a refining capacity here does not seem to be an economically viable idea on the face of it, that is, without government concessions. While the rest of this enhanced benefits piece profits from significant positive changes in the overall situation, trying to build downstream petroleum processing here seems to be a step backward.
Here's a piece of this entire story that is worth watching extremely closely. Opening up the royalties could look good on the face of it, but in practice it might wind up being a Hibernia style trade off as we subsidize jobs with government revenues.
Yet again.
Look even more closely to see if government actually tries to use Hebron as a springboard for its own energy corporation, or Petro-Newf as I lovingly call it. I am naturally cautious of people who want to use public assets (like my tax-cash) and use it to muscle their way into the bigger private sector plays. It's usually a bad idea. They particularly might look at refining as an oil-related asset Petro-Newf could work on developing .
Basically, it comes down to this:
1. The Hebron announcement today is good news for the province.
2. The provincial government will already see significantly better benefits from a Hebron project than from others due to changed domestic and international circumstances.
3. Keep a close eye on what the provincial government actually does in negotiations versus what it says it will do or is doing.
4. Keep a really watchful eye on Petro-Newf to see if it makes a comeback through Hebron.
There are a few more steps to go and, as David Cochrane reported on CBC Radio this afternoon it could be 2012 before we see first oil. Next we should see a development application (if I understand correctly) which will include local benefits proposals, a development mode and all the things necessary to start hearings.
The Premier is suitably excited, although he cautioned the proponents, led by Chevron Canada, that the province will expect improved benefits over previous developments. He singled out royalties, local construction and supply and secondary processing (read refining).
Ok. We'll let's just take a step back and look at some issues that will affect the outcomes.
First let's see what overall circumstances affect the context of these upcoming talks.
1. The provincial energy minister has control over approval since the security of supply provisions of the Real Atlantic Accord are satisfied. You can find the Real Accord along with a ton of other useful information on the regulatory process at the Canada-Newfoundland Offshore Petroleum Board website.
2. High oil prices forecasted to last well into the future make this a viable project with less of the fear of it being "marginal" like Hibernia was considered to be. There won't be any demand for government loans and loan guarantees.
3. The provincial government has bags of cash and no fear of sudden financial ruin. As a consequence, there is much less pressure to sign a good deal when something slightly better might be attainable. The Premier can slag Grimes for trying to entice the Hebron consortium a few years ago, but he should be fair in his comments. He has a distressing tendency to play a game of "neener-neener-neener" with public policy issues. Danny Williams has benefited from improved overall circumstances, not necessarily his superlative management skills, his spin machine to the contrary.
Put the two situations in context; make a fair comment. Personally, I learned a long time ago to walk a mile in someone else's shoes or face a genuinely tough situation before I start to pat myself on the back. There are times when Danny Williams' comments sound a lot like: "There'll be no more of this sun going down thing in the daytime while I am here. I won't be repeating the same sunshine mistakes of that guy who was here on the night shift, giving away our precious solar resource and settling for too much blackness."
4. In Hibernia, the province pushed the expensive GBS platform on the companies, driving up costs on an expensive project. That led directly to decreased government revenues in the long-term as companies sought offsets.
5. In this case, the proponents are already favouring a smaller GBS. They can't build that anywhere - the closer to the site the better - therefore the companies themselves have automatically boosted local industrial benefits as part of their start-up calculations. The government doesn't have to say a word to automatically start out with greater benefits than previous projects.
Expect to see the GBS built at Marystown where the private-sector yard is efficient. Bull Arm might get the work but here's hoping the companies resist working with a Crown-owned entity. Better for government to dispose of Bull Arm to the private sector, otherwise, the companies are likely to drive some hard - and I mean hard - bargains to guarantee quality of work, low costs and firm timeline guarantees.
6. Note that the Hebron GBS is preferred because of the conditions of the field involved. Comparing Hebron to Terra Nova or White Rose is a foolish, specious comparison. Danny Williams can claim that previous governments didn't ask for enough but the truth is something different.
7. In the broader context, look cautiously at what the province may be cooking up in its idea of a new Crown-owned energy mega-corporation or Crown-owned oil company.
8. Background and technical stuff: If you flip back to the archives there are some posts with links to some background information on the offshore and other oil issues.
- The US government Annual Energy Outlook 2005, with forecast to 2025 covers every source of energy on which the US depends. Here's the link.
- Here's an assessment of the value of the Hebron field from Chevron Canada analyst Deborah Provais.
- If you want to understand what API is and the implications, try this link. Go here before you read the Chevron assessment to get a full appreciation of what the oil look like in the Hebron field.
Second, let's look at the Premier's comments on enhanced local benefits. Premier Williams singled out three ways to increase benefits and basically the first two are the ways one would normally expect to see benefits flowing.
Royalties: By negotiating a special royalties deal, the Premier would be throwing away the generic royalty regime which is actually competitive in the marketplace and produces significant cash benefits for the province. Terra Nova is paying off early and moving to higher levels of benefits under the existing regime. Expect White Rose to do the same, much to the benefit of the province.
Incidentally, the only deal that is really less lucrative for the province as a whole than was expected is the Peckford Hibernia deal. Note that all the people whining are the people responsible for that mess; all the people blaming the Liberals for lousy deals on Terra Nova and White Rose are people like Brian Peckford. Let's just say they have an interest in deflecting attention away from their progeny.
In turn , they will point out that Hibernia was signed by the Wells government, but I am here to tell you it was largely done by the time Wells came along. Peckford had already forced the GBS on the proponents and bargained away the royalties.
Turning back to the current situation, there is a possibility of enhancing the royalty regime. But, and this is a big but, putting royalties in play allows for a Peckford-style trade off of cash for jobs. Keep your eye on that ball to see what actually happens.
Local Supplier Benefits/Construction: Watch for a few things here.
As noted, we are likely to get increased industrial benefits in the province due to GBS construction before Danny Williams lifts a finger. We might lose some cash along the way if Bull Arm becomes the construction site and we fail to meet cost, performance and quality targets through the Crown-owned site. There are a bunch of factors that will impact on the final contract. Let's take this deal (or lack of a deal) on its merits, based on facts.
Look for NOIA, the local supplier association, to start pushing for the Premier to insist that local companies get first look at supply work based on geography moreso than competitiveness. They have pushed for this approach on the past two projects and gotten nowhere fast.
In the offshore revenue struggle, NOIA gave Ottawa the finger and fawned over the Premier in the hopes of achieving some unspecified goal. Danny Williams owes them something or I am sure they feel he does. If he spurns their advances, NOIA will be "oh" for three on boosting local participation in the industry through government policy.
Personally I think NOIA does its members a bit of a disservice when it comes to government relations, but hey, I don't pay NOIA membership dues.
Paging John Shaheen! The Peckfordites long dreamt of a massive petrochemical industry here, turning Newfoundland and Labrador into a cross between the Persian Gulf and Alberta. It was more like a grander version of Come by Chance but fortunately for taxpayers pockets, reality was indeed another concept.
Not too surprising therefore that the Tory's last Blue Book resurrected every old hope of an oil refinery on the site of every old fish plant.
Here's where things could get really curious.
Heavy crude, like the stuff coming from Hebron, requires some expensive and complex refining unless you want to produce something really simple like asphalt. In the current marketplace and in the near-term, we can expect to see increasing pressure to maximize the refining of even heavy crude so that it produces as much petrol and other "light" products as possible.
Refining capacity is growing again, after many years of sluggishness and a surplus capacity in the 1980s. The most rapid growth is in Asia according to US government forecasts, while in the US, where the largest capacity exists, emphasis is on increasing capacity at existing operations and making them much more efficient.
There is a shortage of heavy crude refining capacity. The Saudis have the oil. The problem is there is such a shortage of capacity that the Saudis have actually had to sell the grades of heavy crude at deep discounts in recent months. There is plenty of oil and a sluggishness in the development of capacity to handle heavy crude.
In general though, there is much international interest in refineries that are located close to major markets. That's a key point here: close to markets. Venezuela's state-owned oil company operated refining capacity in the southern US, the Kuwaitis bought refineries and gas stations across Europe and most recently Russia's major oil company has expanded its refining and distribution systems.
But they did it right at the doorstep of the market. The big reason I would point to is the relatively high cost of refining heavy crude compared to lighter oil like the stuff from Hibernia. Heavy crude is expensive to extract and expensive to refine. It attracts a lower per barrel price as a consequence so it has some unique cost issues. Put the refinery on the North American mainland and it is merely a railcar journey or pipeline trip away from a major market or distribution node.
Building a refining capacity here does not seem to be an economically viable idea on the face of it, that is, without government concessions. While the rest of this enhanced benefits piece profits from significant positive changes in the overall situation, trying to build downstream petroleum processing here seems to be a step backward.
Here's a piece of this entire story that is worth watching extremely closely. Opening up the royalties could look good on the face of it, but in practice it might wind up being a Hibernia style trade off as we subsidize jobs with government revenues.
Yet again.
Look even more closely to see if government actually tries to use Hebron as a springboard for its own energy corporation, or Petro-Newf as I lovingly call it. I am naturally cautious of people who want to use public assets (like my tax-cash) and use it to muscle their way into the bigger private sector plays. It's usually a bad idea. They particularly might look at refining as an oil-related asset Petro-Newf could work on developing .
Basically, it comes down to this:
1. The Hebron announcement today is good news for the province.
2. The provincial government will already see significantly better benefits from a Hebron project than from others due to changed domestic and international circumstances.
3. Keep a close eye on what the provincial government actually does in negotiations versus what it says it will do or is doing.
4. Keep a really watchful eye on Petro-Newf to see if it makes a comeback through Hebron.
05 April 2005
The Indy and The Michener revisited
The early morning -email included a note from a journalist whose reporting and judgment I respect.
He advises that while the Micheners are indeed self-nominated, they are vetted to get to the stage the Indy is at (a finalist) and then are vetted again to determine a winner.
Ok. Fair enough. And to be fair, under the circumstances, the finalist status is a feather in the Indy cap, as my journalist-correspondent noted.
That said, I still think the Indy should have made it clear how the award nominations were made and how the judging takes place. Those are basic facts that help an informed reader make a judgment. When reporting on itself, the Indy should be even more cautious than usual about hyperbole and spin.
I still think public masturbation should be against the law.
He advises that while the Micheners are indeed self-nominated, they are vetted to get to the stage the Indy is at (a finalist) and then are vetted again to determine a winner.
Ok. Fair enough. And to be fair, under the circumstances, the finalist status is a feather in the Indy cap, as my journalist-correspondent noted.
That said, I still think the Indy should have made it clear how the award nominations were made and how the judging takes place. Those are basic facts that help an informed reader make a judgment. When reporting on itself, the Indy should be even more cautious than usual about hyperbole and spin.
I still think public masturbation should be against the law.
Public Masturbation Alert - Spindy Nominates Self for Award?
Grab a copy of The Independent this week and you will see a front page story about the paper being nominated for a Michener Award for journalistic achievement.
The nomination is for the six part yawner that was supposed to provide a cost-benefit analysis of Confederation with Canada for Newfoundland and Labrador. The series was widely criticized for its faulty (read as non-existent) methodology. The Globe smashed the basic premises to pieces in one single graphic obtained by calling up Statistics Canada; managing editor Ryan Cleary spent a lot of time whining about a lack of complete information.
Each week since the series first appeared the Indy ME has relentlessly reminded us of this Magnificent Achievement in Canadian Journalism (patent pending).
This week, as if we haven't seen it enough, Cleary's column recounts the entire saga for us yet again. (How many weeks is this on the self-promo best-seller list anyways? I blacked out weeks ago.) This week's twist: the supposed irony of "Canada" wanting to honour the Indy for its achievement towards separation.
Well, ladies and gentlemen, go check out the entry rules for the Michener. Turns out you get to nominate yourself for the award.
Turns out "Canada" doesn't want to nominate Cleary and the Indy for anything. Unless it is for best money shot in a gratuitous unrestricted display of auto-manipulation on a never-ending basis.
Turns out there are some facts the Indy doesn't want to tell you, contrary to Cleary's editorial boasts and some truths he doesn't think you can handle.
I thought public masturbation was against the law.
Turns out Ryan's Cleary's breathlessness from the page one story is entirely self-induced.
At least, the other nominees offered something substantive:
The Calgary Herald is up for coverage by a single reporter that took a year to produce. Compare that to Cleary's Crew numbering two or three less than the Telly - a daily - but constantly spoken of by Cleary as if there were two reporters, one of whom works part-time, and a blind guy who speaks no English, with a wooden leg and no arms who shows up once in a while to just help out.
The Mother Corp is up for a major investigation into adverse drug reaction reporting that led to something other than the yawns the Indy has induced in anyone other than hard core Newfoundland pseudo-nationalists.
The Canadian Medical Association Journal and Decouverte (Radio-Canada) are being considered based on their efforts in covering the Clostridium difficile outbreak in Montreal last year. (Psst Ryan: ever think of checking out cleanliness and infection control in local hospitals. Yes, I know it would break the flow of your columns to date, but at least it would be....ummm...what's the word? ....oh yeah.... NEWS.)
The Globe, otherwise known as Toronto's national newspaper, has two nominations. One is for a team from Report on Business into improper use of insurance and mutual funds. The other is for ongoing coverage of the Gomery Inquisition.
As for the Spindy, who do you think wrote this line from its nomination description? "...the newspaper's work was a significant contribution to the debate about equalization and Newfoundland and Labrador's place in Canada."
Would that there was another love that dare not speak its own name.
The nomination is for the six part yawner that was supposed to provide a cost-benefit analysis of Confederation with Canada for Newfoundland and Labrador. The series was widely criticized for its faulty (read as non-existent) methodology. The Globe smashed the basic premises to pieces in one single graphic obtained by calling up Statistics Canada; managing editor Ryan Cleary spent a lot of time whining about a lack of complete information.
Each week since the series first appeared the Indy ME has relentlessly reminded us of this Magnificent Achievement in Canadian Journalism (patent pending).
This week, as if we haven't seen it enough, Cleary's column recounts the entire saga for us yet again. (How many weeks is this on the self-promo best-seller list anyways? I blacked out weeks ago.) This week's twist: the supposed irony of "Canada" wanting to honour the Indy for its achievement towards separation.
Well, ladies and gentlemen, go check out the entry rules for the Michener. Turns out you get to nominate yourself for the award.
Turns out "Canada" doesn't want to nominate Cleary and the Indy for anything. Unless it is for best money shot in a gratuitous unrestricted display of auto-manipulation on a never-ending basis.
Turns out there are some facts the Indy doesn't want to tell you, contrary to Cleary's editorial boasts and some truths he doesn't think you can handle.
I thought public masturbation was against the law.
Turns out Ryan's Cleary's breathlessness from the page one story is entirely self-induced.
At least, the other nominees offered something substantive:
The Calgary Herald is up for coverage by a single reporter that took a year to produce. Compare that to Cleary's Crew numbering two or three less than the Telly - a daily - but constantly spoken of by Cleary as if there were two reporters, one of whom works part-time, and a blind guy who speaks no English, with a wooden leg and no arms who shows up once in a while to just help out.
The Mother Corp is up for a major investigation into adverse drug reaction reporting that led to something other than the yawns the Indy has induced in anyone other than hard core Newfoundland pseudo-nationalists.
The Canadian Medical Association Journal and Decouverte (Radio-Canada) are being considered based on their efforts in covering the Clostridium difficile outbreak in Montreal last year. (Psst Ryan: ever think of checking out cleanliness and infection control in local hospitals. Yes, I know it would break the flow of your columns to date, but at least it would be....ummm...what's the word? ....oh yeah.... NEWS.)
The Globe, otherwise known as Toronto's national newspaper, has two nominations. One is for a team from Report on Business into improper use of insurance and mutual funds. The other is for ongoing coverage of the Gomery Inquisition.
As for the Spindy, who do you think wrote this line from its nomination description? "...the newspaper's work was a significant contribution to the debate about equalization and Newfoundland and Labrador's place in Canada."
Would that there was another love that dare not speak its own name.
The -EST Premier
Danny Williams is an EST guy.
No, I don't mean a graduate of the 1970s sensitivity training program.
I mean a guy for whom everything must be superlative. As in best, biggest, most.
No surprise therefore that the release yesterday on the Lower Churchill proposals plays up the number of expressions of interest - 25 - without actually breaking them out. During the news conference, though, questions from reporters did garner some clarification.
Out of that 25, only 10 actually are comprehensive development proposals that include financing, building and transmitting power. The others are all from people wanting a piece of the action - engineering firms, environmental companies, equity investment houses, the guys who sell toilet paper, maybe.
Before we go any further, let's all remember that Ontario was at the table between 1989 and 1992. It's nice to see them back. The premier described their value accurately. It's just not the first time they have been there.
The number of proposals the premier acknowledged is a bit interesting since the actual call for expressions of interest is pretty clear about what government wanted. Check page 7:
"The proponent shall provide a summary description of the proposed technical project configuration including generation and transmission infrastructure. The proponent shall provide a description of the proposed nature of commercial arrangements for project construction, project financing, operation, sale of power, and other key elements. In particular, the description should cover arrangements between the proponent and the Government, and arrangements between the proponent, other participants and other government entities. The commercial arrangements must address ownership of the facilities, types of power sale arrangements, potential risk allocation, potential financial incentives/ support requested, proponent’s perspective on royalty arrangements, ownership of potential greenhouse gas credits and other relevant terms." [Emphasis added]
Right off the bat we can flick more than half the submissions into the discard pile since they failed to meet the tender specs. It would be a monumental waste of time to entertain any comment from anyone who is really not prepared to put forward a proposal to handle the whole thing as they were asked to do. Environmental guys, engineers, financiers and the guys who sell chemical toilets can bid on the tenders coming from the successful proponents.
For the remaining proposals, though, if we think it through for a second, we can limit the whole thing down to some basic considerations.
1. Markets. Any project must have a market for the power. In this case, expect to see Quebec and Ontario as the major markets. New York is a possibility.
2. Competitive pricing. No point in spending a buck fifty to get a fifty cent cuke on the market. Therefore, while California is a potential customer, as is Chile, the costs of getting Labrador electricity to those places is just too high to make it commercially viable.
Bring yourself a little closer to home. Now think about the costs of adding to existing infrastructure using established technology. That brings you back to the three markets I just mentioned which can be reached cost-effectively using either existing transmission lines or by adding to the grid.
The non-Quebec route is fine as long as the power to the potential customer - New York state - is as cheap or cheaper than our competitors.
3. Capital. With those two things in place - especially the long-term purchase agreement, we can raise the cash. A project of this size is likely to cost upwards of $5.0 billion, all-up, including transmission lines. The people with cash want to know their investment is secure. The long-term purchase arrangements will make them sleep soundly at night.
Consider too that if we pile on local benefits and drive up royalties, those things add to the project costs and/or drive up the unit cost the end-user pays. If those things price us out of the market, then we won't get the tremendous benefits the premier talked about today and we don't have a project at all.
Basically every single one of the 10 real proposals received last week has to address those three points to be viable. We can pick among the best of the lot and try some bargaining, but just look closely at it and you'll see that contrary to what some people may say, the possibilities are not really endless.
If the only viable markets turn out to be Ontario and Quebec, are they going to pay more for the energy than if they developed it themselves? Do you feel the options dwindling somewhat?
Ontario and Quebec are savvy energy players. They have tons of experience, but so do we here in the province, if we look around and find Stan Marshall for example.
We have some leverage in all this, potentially, but since I am not an -EST guy, I really don't have the need to inflate expectations beyond some level of probability. There is a deal to be done here and a good one if the thing is handled properly.
We just don't have any flags to tear down.
Let's see what happens in the next few months.
No, I don't mean a graduate of the 1970s sensitivity training program.
I mean a guy for whom everything must be superlative. As in best, biggest, most.
No surprise therefore that the release yesterday on the Lower Churchill proposals plays up the number of expressions of interest - 25 - without actually breaking them out. During the news conference, though, questions from reporters did garner some clarification.
Out of that 25, only 10 actually are comprehensive development proposals that include financing, building and transmitting power. The others are all from people wanting a piece of the action - engineering firms, environmental companies, equity investment houses, the guys who sell toilet paper, maybe.
Before we go any further, let's all remember that Ontario was at the table between 1989 and 1992. It's nice to see them back. The premier described their value accurately. It's just not the first time they have been there.
The number of proposals the premier acknowledged is a bit interesting since the actual call for expressions of interest is pretty clear about what government wanted. Check page 7:
"The proponent shall provide a summary description of the proposed technical project configuration including generation and transmission infrastructure. The proponent shall provide a description of the proposed nature of commercial arrangements for project construction, project financing, operation, sale of power, and other key elements. In particular, the description should cover arrangements between the proponent and the Government, and arrangements between the proponent, other participants and other government entities. The commercial arrangements must address ownership of the facilities, types of power sale arrangements, potential risk allocation, potential financial incentives/ support requested, proponent’s perspective on royalty arrangements, ownership of potential greenhouse gas credits and other relevant terms." [Emphasis added]
Right off the bat we can flick more than half the submissions into the discard pile since they failed to meet the tender specs. It would be a monumental waste of time to entertain any comment from anyone who is really not prepared to put forward a proposal to handle the whole thing as they were asked to do. Environmental guys, engineers, financiers and the guys who sell chemical toilets can bid on the tenders coming from the successful proponents.
For the remaining proposals, though, if we think it through for a second, we can limit the whole thing down to some basic considerations.
1. Markets. Any project must have a market for the power. In this case, expect to see Quebec and Ontario as the major markets. New York is a possibility.
2. Competitive pricing. No point in spending a buck fifty to get a fifty cent cuke on the market. Therefore, while California is a potential customer, as is Chile, the costs of getting Labrador electricity to those places is just too high to make it commercially viable.
Bring yourself a little closer to home. Now think about the costs of adding to existing infrastructure using established technology. That brings you back to the three markets I just mentioned which can be reached cost-effectively using either existing transmission lines or by adding to the grid.
The non-Quebec route is fine as long as the power to the potential customer - New York state - is as cheap or cheaper than our competitors.
3. Capital. With those two things in place - especially the long-term purchase agreement, we can raise the cash. A project of this size is likely to cost upwards of $5.0 billion, all-up, including transmission lines. The people with cash want to know their investment is secure. The long-term purchase arrangements will make them sleep soundly at night.
Consider too that if we pile on local benefits and drive up royalties, those things add to the project costs and/or drive up the unit cost the end-user pays. If those things price us out of the market, then we won't get the tremendous benefits the premier talked about today and we don't have a project at all.
Basically every single one of the 10 real proposals received last week has to address those three points to be viable. We can pick among the best of the lot and try some bargaining, but just look closely at it and you'll see that contrary to what some people may say, the possibilities are not really endless.
If the only viable markets turn out to be Ontario and Quebec, are they going to pay more for the energy than if they developed it themselves? Do you feel the options dwindling somewhat?
Ontario and Quebec are savvy energy players. They have tons of experience, but so do we here in the province, if we look around and find Stan Marshall for example.
We have some leverage in all this, potentially, but since I am not an -EST guy, I really don't have the need to inflate expectations beyond some level of probability. There is a deal to be done here and a good one if the thing is handled properly.
We just don't have any flags to tear down.
Let's see what happens in the next few months.
04 April 2005
Maybe thinking should at least give us pause
While I have been very critical of the Independent in recent weeks, I will say that every now and then something appears which makes the paper worth the buck I spend each Sunday to buy it.
This week, there are two things.
One is the front page story by Stephanie Porter on the Hibernia project. She makes a couple of basic factual errors, but on balance the story accurately describes the financial situation of the Hibernia project. Of course, there are quotes from guys like Ron Penney who was on the Real Accord negotiating team and who, most likely, believed the Peckford government's palaver about eating our oil revenue cake and having it too. But other than that, I'd say give it a read.
The second thing is the regular column by Indy owner Brian Dobbin. He publishes under the title "Publish or perish", which is a phrase the Herald used to use relentlessly in drumming up letters to the editor.
Dobbin makes three comments in the piece that I want to address.
First, he says he learned last week in The Independent something he didn't know, namely that the provincial government is looking at setting up a state-owned oil company to invest in the offshore. Second, he slags a consultant by saying, as Dobbin put it, if the consultant had any insight, he would be "an economic do-er as opposed to being a commentator on other do-ers". Third, Dobbin backs the idea of a Crown-owned oil corporation.
Let's tackle these in order.
1. That's a new one: the Energy Mega-Corp. If Dobbin heard about the energy corporation idea only from reading the Indy, he might want to get out more. The story was reported last year in The Express and this week alone The Express covered it again, before the Indy went to press. Heck, it's even in the Tory Blue Book.
Conrad Black. Lord Thomson of Fleet. Rupert Murdoch. Newspaper owners all, and all renowned for reading more than the ink-blotters they printed. It's one of the things, incidentally that distinguishes entrepreneurs: they thirst for information and analysis. They hunt it out in weird and wonderful places and ponder the gems they find.
Information - or intelligence as the b-school crowd call it now - is the starting point of generating ideas that stand a hope of lasting. Open Line is full of people with ideas. Don't expect that the Moon Man has too many people lining up to give him cash, though. Smart entrepreneurs know that with more information they have a better chance of picking out the gold from the pyrite, or in this case the crude from the canola.
2. Slagging commentators. My self-interest aside, Dobbin should realize that another hallmark of successful entrepreneurs is that they realize one thing: they don't know it all. They employ guys like the expert he slagged to give them more information, ideas and opinions before they make a decision. Then the entrepreneurs do what they do best: take calculated, informed risks.
3. Petro-Newf Reborn. Perhaps the most bizarre part of the column is the bit where Dobbin the Do-er advocates government getting into the private sector realm by buying up big shares in the offshore through an energy Crown corporation. He uses as back-up for his position a meeting he had five years ago with then premier Beaton Tulk and a few senior officials over some proposal by the Taiwanese state-owned oil enterprise to invest in producing gas offshore Newfoundland and Labrador. Without knowing all the background here, let's just leave this little gem off the table for now. If Dobbin wants to expand on that proposal with some, oooh, maybe little things like facts and details, then we can tackle it.
But Dobbin would know, if he read more, that there is a substantial body of opinion out there that opposes state-ownership of what should be private sector businesses. Consider that the World Bank has devoted considerable energy to pointing out just exactly how inefficient state-owned oil companies are in producing anything, let alone wealth. The people who pay for the inefficiency? You and me, the average taxpayer.
For another thing, Dobbin should know from living here for more than five minutes that the provincial government has proven time and again that it simply cannot run anything normally in the private sector as efficiently as that same enterprise would run in the private sector. More often than not these ventures have proven to be massive drains on the public treasury. Who pays? You're catching on fast.
As much as he may tune out the Sprung Greenhouse, Dobbin would take two lessons from it, if he read more than his own paper. He'd learn that it was a colossal failure that cost taxpayers at least $22 million. He'd also know that bureaucrats - the very people he slags unmercifully in his column - warned up, down and sideways that every single claim by cuke proponents The Sprungs was sheer hogfodder. There was a premier who would over-rule them, much to the delight of the proponents, but he did so despite overwhelming evidence and carefully considered opinion that growing cukes in this province in a hydroponic greenhouse was asinine.
And that's really where I depart from Dobbin on a fundamental level. Dobbin marks this all down to fear. It really isn't about fear at all. Dobbin is essentially advocating the kind of carpet-bagging lunacy that we have seen time and again from Shaheens and Doyles and Sprungs. It is about political decision-making that is autocratic - to be generous - of the type offered by Smallwood or Peckford. It is about managing something, in this case government, in a way that one seldom sees in sophisticated modern business. Are there any unemployed Latvians out there Brian thinks need work?
What Dobbin offers is the same old idiocy we have seen time and time again. The only fear involved is the fear that yet another fly-by-night promoter can come here and gain access to my tax dollars by flattering The Boss. Were we to follow Dobbin's model, we would toss aside the expertise of successful local companies like, say Fortis and Rutter, and go back to some other model that has simply never worked. We would abandon common sense and all the progress in developing the economy over the past 15 years and simply repeat the same inane mistakes of the past.
What Dobbin would essentially throw away is the actual sophistication, the genuine expertise of the local business community in favour of some massive, state-owned bureaucracy squandering tax dollars on sluggish administration. Money like that would be better spent on health care and could be better obtained in other ways; like say improving revenue deals for the province from private sector developers, and by encouraging local investment by the private sector in new businesses. These guys will generate real wealth locally and abroad.
If Dobbin was a modern entrepreneur, he'd be running about trying to convince Danny to find a way so that local private sector companies can get into the oil business. That he does exactly the opposite suggests to me that Dobbin really does hearken back to the dark pre-Confederation times. That's when local businesses controlled government and used public money to subsidize the lifestyles of the handful of business owners in St. John's. It was our own piece of the Third World in North America and thankfully it is long gone.
Brian Dobbin: if you want my money either for an oil company or another private sector scheme, better try asking me directly. I don't plan to stand by while you suck cash out of my pocket through your political buddies and flush it away on some goof-ball idea. That's one of things that makes state-owned oil enterprises such appalling bad ideas. It's the kind of thing you find in Zangaro, not Zeebrugge.
The public sector has no place subsidizing let alone operating things that genuine entrepreneurs should be running.
Fear shouldn't stop us from doing anything that is well-founded and carefully thought through, Brian, but maybe thinking should at least give us pause enough to consider how outmoded your ideas actually are.
This week, there are two things.
One is the front page story by Stephanie Porter on the Hibernia project. She makes a couple of basic factual errors, but on balance the story accurately describes the financial situation of the Hibernia project. Of course, there are quotes from guys like Ron Penney who was on the Real Accord negotiating team and who, most likely, believed the Peckford government's palaver about eating our oil revenue cake and having it too. But other than that, I'd say give it a read.
The second thing is the regular column by Indy owner Brian Dobbin. He publishes under the title "Publish or perish", which is a phrase the Herald used to use relentlessly in drumming up letters to the editor.
Dobbin makes three comments in the piece that I want to address.
First, he says he learned last week in The Independent something he didn't know, namely that the provincial government is looking at setting up a state-owned oil company to invest in the offshore. Second, he slags a consultant by saying, as Dobbin put it, if the consultant had any insight, he would be "an economic do-er as opposed to being a commentator on other do-ers". Third, Dobbin backs the idea of a Crown-owned oil corporation.
Let's tackle these in order.
1. That's a new one: the Energy Mega-Corp. If Dobbin heard about the energy corporation idea only from reading the Indy, he might want to get out more. The story was reported last year in The Express and this week alone The Express covered it again, before the Indy went to press. Heck, it's even in the Tory Blue Book.
Conrad Black. Lord Thomson of Fleet. Rupert Murdoch. Newspaper owners all, and all renowned for reading more than the ink-blotters they printed. It's one of the things, incidentally that distinguishes entrepreneurs: they thirst for information and analysis. They hunt it out in weird and wonderful places and ponder the gems they find.
Information - or intelligence as the b-school crowd call it now - is the starting point of generating ideas that stand a hope of lasting. Open Line is full of people with ideas. Don't expect that the Moon Man has too many people lining up to give him cash, though. Smart entrepreneurs know that with more information they have a better chance of picking out the gold from the pyrite, or in this case the crude from the canola.
2. Slagging commentators. My self-interest aside, Dobbin should realize that another hallmark of successful entrepreneurs is that they realize one thing: they don't know it all. They employ guys like the expert he slagged to give them more information, ideas and opinions before they make a decision. Then the entrepreneurs do what they do best: take calculated, informed risks.
3. Petro-Newf Reborn. Perhaps the most bizarre part of the column is the bit where Dobbin the Do-er advocates government getting into the private sector realm by buying up big shares in the offshore through an energy Crown corporation. He uses as back-up for his position a meeting he had five years ago with then premier Beaton Tulk and a few senior officials over some proposal by the Taiwanese state-owned oil enterprise to invest in producing gas offshore Newfoundland and Labrador. Without knowing all the background here, let's just leave this little gem off the table for now. If Dobbin wants to expand on that proposal with some, oooh, maybe little things like facts and details, then we can tackle it.
But Dobbin would know, if he read more, that there is a substantial body of opinion out there that opposes state-ownership of what should be private sector businesses. Consider that the World Bank has devoted considerable energy to pointing out just exactly how inefficient state-owned oil companies are in producing anything, let alone wealth. The people who pay for the inefficiency? You and me, the average taxpayer.
For another thing, Dobbin should know from living here for more than five minutes that the provincial government has proven time and again that it simply cannot run anything normally in the private sector as efficiently as that same enterprise would run in the private sector. More often than not these ventures have proven to be massive drains on the public treasury. Who pays? You're catching on fast.
As much as he may tune out the Sprung Greenhouse, Dobbin would take two lessons from it, if he read more than his own paper. He'd learn that it was a colossal failure that cost taxpayers at least $22 million. He'd also know that bureaucrats - the very people he slags unmercifully in his column - warned up, down and sideways that every single claim by cuke proponents The Sprungs was sheer hogfodder. There was a premier who would over-rule them, much to the delight of the proponents, but he did so despite overwhelming evidence and carefully considered opinion that growing cukes in this province in a hydroponic greenhouse was asinine.
And that's really where I depart from Dobbin on a fundamental level. Dobbin marks this all down to fear. It really isn't about fear at all. Dobbin is essentially advocating the kind of carpet-bagging lunacy that we have seen time and again from Shaheens and Doyles and Sprungs. It is about political decision-making that is autocratic - to be generous - of the type offered by Smallwood or Peckford. It is about managing something, in this case government, in a way that one seldom sees in sophisticated modern business. Are there any unemployed Latvians out there Brian thinks need work?
What Dobbin offers is the same old idiocy we have seen time and time again. The only fear involved is the fear that yet another fly-by-night promoter can come here and gain access to my tax dollars by flattering The Boss. Were we to follow Dobbin's model, we would toss aside the expertise of successful local companies like, say Fortis and Rutter, and go back to some other model that has simply never worked. We would abandon common sense and all the progress in developing the economy over the past 15 years and simply repeat the same inane mistakes of the past.
What Dobbin would essentially throw away is the actual sophistication, the genuine expertise of the local business community in favour of some massive, state-owned bureaucracy squandering tax dollars on sluggish administration. Money like that would be better spent on health care and could be better obtained in other ways; like say improving revenue deals for the province from private sector developers, and by encouraging local investment by the private sector in new businesses. These guys will generate real wealth locally and abroad.
If Dobbin was a modern entrepreneur, he'd be running about trying to convince Danny to find a way so that local private sector companies can get into the oil business. That he does exactly the opposite suggests to me that Dobbin really does hearken back to the dark pre-Confederation times. That's when local businesses controlled government and used public money to subsidize the lifestyles of the handful of business owners in St. John's. It was our own piece of the Third World in North America and thankfully it is long gone.
Brian Dobbin: if you want my money either for an oil company or another private sector scheme, better try asking me directly. I don't plan to stand by while you suck cash out of my pocket through your political buddies and flush it away on some goof-ball idea. That's one of things that makes state-owned oil enterprises such appalling bad ideas. It's the kind of thing you find in Zangaro, not Zeebrugge.
The public sector has no place subsidizing let alone operating things that genuine entrepreneurs should be running.
Fear shouldn't stop us from doing anything that is well-founded and carefully thought through, Brian, but maybe thinking should at least give us pause enough to consider how outmoded your ideas actually are.
General Bullshit - revised
After reading this story and hearing the on-air version, I had to check the bio of one Gordon O'Connor, Conservative Party defence critic.
Seems O'Connor is blaming the Liberals for the RAF withdrawal from Goose Bay.
He pledges that the Conservatives would "do their damnedest" and if that failed, well, you know...
"But if that doesn't happen, we have other operational requirements within [our] sovereignty and security which we would have to deploy, and would deploy to Goose Bay."
Now let me make this clear:
Gordo is a zipperhead. That's military slang (not necessarily complimentary) for an armoured type, prone to bobbing around in large motorized metal boxes trying desperately not to get bogged. Bogged: as in up to the turret in, well, bog.
One of my former army public affairs colleagues was found standing on the cupola of his Centurion, the only bit of the tank visible above ground. His course report suggested he might find advantageous employment in another corps. He did.
What Gordo knows about aircraft and air operations likely comes entirely from his experiences in Air Canada First Class and the bits of his army staff courses he slept through on his way to BGen.
Now I could be wrong, because, according to CBC News, his last posting involved " responsibility for planning the future force structure of the Canadian Forces (organization, equipment and personnel) and co-ordinating all resources related to about 300 ongoing Canadian Forces equipment and infrastructure projects."
But as Gordo told CBC about Goose Bay: "O'Connor says it is too soon to say what forces a Conservative government would station at Goose Bay."
That's, like, just a bit of equivocating, don't you think?
So because he held an august appointment planning future force structures (read as "what we have in order to do what we do with"), Gordo should know what the operational requirements are for every inch of space in the DND system. He knows the current operational requirements of the Canadian Forces intimately.
Or at least he should.
He likely does, but here's what I think:
I think Gordo knows full well that Goose Bay has NO operational utility for DND/CF such that DND needs to own a base and maintain assets there.
I think Gordo is spouting stuff he knows is pure bullshit because there is a by-election coming.
I think Gordo is driving around trying desperately not to get bogged down in an issue where he knows the difference between what is likely and what he has to say for political purposes.
I think Gordo should try this one at his next meeting of zipperheads: A Conservative government will move every tank in the Canadian Forces armoured corps to Goose Bay and its associated training areas. We'll even build new training areas there and a big firing range for whatever the zips will be driving and shooting from.
It's operationally needed, tell them.
Why? Because we need to be able to operate in dense wooded terrain where tanks can't really go.
And we can use the runways to practice wheelies and doughnuts.
Try that on 'em, Gordo and watch the less than enthusiastic response you get.
Note: The whistling sound you hear, Gordo, is the discarding sabot round from a Leopard going past your head.
Gunnery training ain't what it used to be.
Yep.
Put all the tanks in Goose Bay.
"Driver: Advance!" that one, Gordo and see how far you get.
Seems O'Connor is blaming the Liberals for the RAF withdrawal from Goose Bay.
He pledges that the Conservatives would "do their damnedest" and if that failed, well, you know...
"But if that doesn't happen, we have other operational requirements within [our] sovereignty and security which we would have to deploy, and would deploy to Goose Bay."
Now let me make this clear:
Gordo is a zipperhead. That's military slang (not necessarily complimentary) for an armoured type, prone to bobbing around in large motorized metal boxes trying desperately not to get bogged. Bogged: as in up to the turret in, well, bog.
One of my former army public affairs colleagues was found standing on the cupola of his Centurion, the only bit of the tank visible above ground. His course report suggested he might find advantageous employment in another corps. He did.
What Gordo knows about aircraft and air operations likely comes entirely from his experiences in Air Canada First Class and the bits of his army staff courses he slept through on his way to BGen.
Now I could be wrong, because, according to CBC News, his last posting involved " responsibility for planning the future force structure of the Canadian Forces (organization, equipment and personnel) and co-ordinating all resources related to about 300 ongoing Canadian Forces equipment and infrastructure projects."
But as Gordo told CBC about Goose Bay: "O'Connor says it is too soon to say what forces a Conservative government would station at Goose Bay."
That's, like, just a bit of equivocating, don't you think?
So because he held an august appointment planning future force structures (read as "what we have in order to do what we do with"), Gordo should know what the operational requirements are for every inch of space in the DND system. He knows the current operational requirements of the Canadian Forces intimately.
Or at least he should.
He likely does, but here's what I think:
I think Gordo knows full well that Goose Bay has NO operational utility for DND/CF such that DND needs to own a base and maintain assets there.
I think Gordo is spouting stuff he knows is pure bullshit because there is a by-election coming.
I think Gordo is driving around trying desperately not to get bogged down in an issue where he knows the difference between what is likely and what he has to say for political purposes.
I think Gordo should try this one at his next meeting of zipperheads: A Conservative government will move every tank in the Canadian Forces armoured corps to Goose Bay and its associated training areas. We'll even build new training areas there and a big firing range for whatever the zips will be driving and shooting from.
It's operationally needed, tell them.
Why? Because we need to be able to operate in dense wooded terrain where tanks can't really go.
And we can use the runways to practice wheelies and doughnuts.
Try that on 'em, Gordo and watch the less than enthusiastic response you get.
Note: The whistling sound you hear, Gordo, is the discarding sabot round from a Leopard going past your head.
Gunnery training ain't what it used to be.
Yep.
Put all the tanks in Goose Bay.
"Driver: Advance!" that one, Gordo and see how far you get.
Blogs and real world information
Two episodes over the weekend illustrated one of the conflicts between the land o' blogs on the Internet, sometimes called the blogosphere, and the world inhabited by lesser mortals.
The first one was a draft commentary I put together on the Borden AIDS story. You've already seen my posts in which I named the accused. It's bee public since the outset. Well it seems some news outlets will no longer identify the accused in the case since she is herself a victim of crime.
It makes for some curious reporting. Someone dependent solely on that one news outlet will not have information the rest of us share. The accused in this case is, well, the accused. In the absence of a publication ban, trial information is public and the name of the accused is open to publication.
What it boils down to is this: if I do the commentary, I'll rework the thing to avoid mentioning the name of the accused. I'll do that solely to respect the editorial policy of the news outlet involved. I'll keep it here in this blog since the information is already out there and there is no legal injunction against using it.
The second case is testimony by one of the witnesses at the Gomery inquisition. I chose the word advisedly because I am not sure what is going to come from this that the cops haven't seen already. For example, the testimony that has everyone in Ottawa a-twitter, comes from one of the two people facing criminal charges in the case.
If this individual hadn't put his complete information in front of the cops already, I'd be pretty surprised. While it sure as heck doesn't appear to exonerate him, it implicates others.
There is a publication ban in this case, so I cannot legally tell you what was said. Truth is, I don't know for certain what the testimony was.
What I can tell you is that the blogosphere is itself vibrating with the electric buzz from some American bloggers who have reported what they think is the testimony. That has been picked up by Canadian bloggers, including Norman Spector (Mulroney's ex-chief of staff and therefore a completely unbiased source) and Warren Kinsella (the lawyer cum self-promoter who brought us the devastating Barney attack on Stockwell Day as part of Liberal campaigns past).
The blog buzz has reached such a pitch that Rosemary Thompson (CTV) included a picture of the American blog front page in her report for the national news on Sunday night.
Now I'll say this:
Based on what I have read, I really cannot see how accusations of corruption against a previous regime will affect the Martin government. Some bloggers - like Spector - are likely trafficking in as much innuendo as fact "Oh I wish you knew what I knew cause if you did, Martin is toast." His approach would warrant some Liberal recounting the litany of Tories from Spector's time who did hard time for political crime, or others, Like Sinc Stevens who was cast into the pit for trying to run a business out of his ministerial office.
People who live in glass houses, Normie, people who live in glass houses. But more to the point, Norm, would the history of corruption under Mulroney disqualify his progeny from winning next time out? If you want Harper in 24 Sussex, trying selling Harper.
Since I can't give you the testimony either, if I had it, nor can I point you to people claiming to have it (I like my ass out of jail, thanks) , I do have the capacity to do something a little different. I'll give you some links to follow for interesting comment on Gomery:
Warren Kinsella - He's a Liberal and a dedicated partisan, but man I have to say he is a bit much to take sometimes.
Norman Spector - He's a Conservative, and like Warren, is equally hard to take slightly more often. Only slightly. Big value here is the wide range of links Norm has to other stories on Gomery. Big downside: it's Norman Spector.
Nealenews - The look of Matt Drudge's now infamous Drudge Report. As I recall this site yesterday was linking to the US site. He must have spoken to a lawyer in the meantime.
Oddly, CTNnews.ca has also taken down Rosemary's story and they did it in the matter of a few seconds this morning as I was trying to download it.
Judge Gomery may be boring at times and at others he may be amusing (Chretien made an ass of him pretty easily) but he is still a judge with full powers to slap Canadians in jail.
Surf the net and use google, by the way, and you'll find the testimony in question.
The first one was a draft commentary I put together on the Borden AIDS story. You've already seen my posts in which I named the accused. It's bee public since the outset. Well it seems some news outlets will no longer identify the accused in the case since she is herself a victim of crime.
It makes for some curious reporting. Someone dependent solely on that one news outlet will not have information the rest of us share. The accused in this case is, well, the accused. In the absence of a publication ban, trial information is public and the name of the accused is open to publication.
What it boils down to is this: if I do the commentary, I'll rework the thing to avoid mentioning the name of the accused. I'll do that solely to respect the editorial policy of the news outlet involved. I'll keep it here in this blog since the information is already out there and there is no legal injunction against using it.
The second case is testimony by one of the witnesses at the Gomery inquisition. I chose the word advisedly because I am not sure what is going to come from this that the cops haven't seen already. For example, the testimony that has everyone in Ottawa a-twitter, comes from one of the two people facing criminal charges in the case.
If this individual hadn't put his complete information in front of the cops already, I'd be pretty surprised. While it sure as heck doesn't appear to exonerate him, it implicates others.
There is a publication ban in this case, so I cannot legally tell you what was said. Truth is, I don't know for certain what the testimony was.
What I can tell you is that the blogosphere is itself vibrating with the electric buzz from some American bloggers who have reported what they think is the testimony. That has been picked up by Canadian bloggers, including Norman Spector (Mulroney's ex-chief of staff and therefore a completely unbiased source) and Warren Kinsella (the lawyer cum self-promoter who brought us the devastating Barney attack on Stockwell Day as part of Liberal campaigns past).
The blog buzz has reached such a pitch that Rosemary Thompson (CTV) included a picture of the American blog front page in her report for the national news on Sunday night.
Now I'll say this:
Based on what I have read, I really cannot see how accusations of corruption against a previous regime will affect the Martin government. Some bloggers - like Spector - are likely trafficking in as much innuendo as fact "Oh I wish you knew what I knew cause if you did, Martin is toast." His approach would warrant some Liberal recounting the litany of Tories from Spector's time who did hard time for political crime, or others, Like Sinc Stevens who was cast into the pit for trying to run a business out of his ministerial office.
People who live in glass houses, Normie, people who live in glass houses. But more to the point, Norm, would the history of corruption under Mulroney disqualify his progeny from winning next time out? If you want Harper in 24 Sussex, trying selling Harper.
Since I can't give you the testimony either, if I had it, nor can I point you to people claiming to have it (I like my ass out of jail, thanks) , I do have the capacity to do something a little different. I'll give you some links to follow for interesting comment on Gomery:
Warren Kinsella - He's a Liberal and a dedicated partisan, but man I have to say he is a bit much to take sometimes.
Norman Spector - He's a Conservative, and like Warren, is equally hard to take slightly more often. Only slightly. Big value here is the wide range of links Norm has to other stories on Gomery. Big downside: it's Norman Spector.
Nealenews - The look of Matt Drudge's now infamous Drudge Report. As I recall this site yesterday was linking to the US site. He must have spoken to a lawyer in the meantime.
Oddly, CTNnews.ca has also taken down Rosemary's story and they did it in the matter of a few seconds this morning as I was trying to download it.
Judge Gomery may be boring at times and at others he may be amusing (Chretien made an ass of him pretty easily) but he is still a judge with full powers to slap Canadians in jail.
Surf the net and use google, by the way, and you'll find the testimony in question.
01 April 2005
What are they thinking? Are they thinking? They think?
Enjoy this Sun story.
Apparently, Stephen Harper has decided that public bluster is better than anything else when it comes to dealing with the C-43 controversy.
Now it could be that the Sun chain is just keeping something on life support that should be allowed to pass peacefully into eternity. Then again, maybe the Opposition parties are just getting up a head of steam to see if they can force the Martin government into blinking.
Consider too that over at the local weekly The Express, Norman Doyle is blaming John Efford for the whole mess. Geez, Norm this "Blame Efford" thing is getting even more tiresome than the C-43 story.
Three opposition parties. Three different problems with Bill C-43.
What should a government do?
It's a bit of a poser.
Stephen Harper now wants both Kyoto and the offshore bills taken out of the budget measure. Since the Kyoto - or more correctly - the environmental provisions are not really budget measures, perhaps the government could meet him on that one. But knowing Mr. Harper has upped the ante, I'd be more inclined to take my chances if I were Paul Martin.
After all, Stephen Harper doesn't support the offshore deal. His solution is a change to Equalization and I have yet to see Mr. Harper state in writing that if he were prime minister he would honour the commitment reached on January 28. Statements from his media wrangler don't count.
So, we are in the same place we were a week ago. Lots of bluster and threats. Lots of media speculation.
The bill doesn't come for a vote for about three weeks.
I am not sure I can stand three more weeks of this palaver.
Apparently, Stephen Harper has decided that public bluster is better than anything else when it comes to dealing with the C-43 controversy.
Now it could be that the Sun chain is just keeping something on life support that should be allowed to pass peacefully into eternity. Then again, maybe the Opposition parties are just getting up a head of steam to see if they can force the Martin government into blinking.
Consider too that over at the local weekly The Express, Norman Doyle is blaming John Efford for the whole mess. Geez, Norm this "Blame Efford" thing is getting even more tiresome than the C-43 story.
Three opposition parties. Three different problems with Bill C-43.
What should a government do?
It's a bit of a poser.
Stephen Harper now wants both Kyoto and the offshore bills taken out of the budget measure. Since the Kyoto - or more correctly - the environmental provisions are not really budget measures, perhaps the government could meet him on that one. But knowing Mr. Harper has upped the ante, I'd be more inclined to take my chances if I were Paul Martin.
After all, Stephen Harper doesn't support the offshore deal. His solution is a change to Equalization and I have yet to see Mr. Harper state in writing that if he were prime minister he would honour the commitment reached on January 28. Statements from his media wrangler don't count.
So, we are in the same place we were a week ago. Lots of bluster and threats. Lots of media speculation.
The bill doesn't come for a vote for about three weeks.
I am not sure I can stand three more weeks of this palaver.
Time for a New Approach
Goldman Sachs yesterday - so it isn't an April Fools Day joke - reported crude prices may hit US$105 in the next few years with a possible "superspike" coming at US$135 per barrel.
Some implications:
- Provincial government oil revenues will exceed even the most optimistic projections. No amount of fudging by the Finance Department will hide the dollar bills sticking out through the windows and poking under doors.
- Newfoundland and Labrador will become a "have" province for a decade or more.
- The January deal will only be worth $2.0 billion not the scads more predicted by Danny and his boys.
- The province is ultimately faced with a serious political question for the first time in its recent history. We have to decide whether or not we want to blow the whole wad on everyones' wish lists or do something practical and productive with it.
It will be time for a genuinely new approach to politics.
Some implications:
- Provincial government oil revenues will exceed even the most optimistic projections. No amount of fudging by the Finance Department will hide the dollar bills sticking out through the windows and poking under doors.
- Newfoundland and Labrador will become a "have" province for a decade or more.
- The January deal will only be worth $2.0 billion not the scads more predicted by Danny and his boys.
- The province is ultimately faced with a serious political question for the first time in its recent history. We have to decide whether or not we want to blow the whole wad on everyones' wish lists or do something practical and productive with it.
It will be time for a genuinely new approach to politics.
I wish it was an April Fools' joke
Mile One is a time machine for ancient entertainment.
VOCM is reporting that country music singer George Jones is coming to Mile One to perform 50 years of hits. Yep a half century of country from a guy who retired from the business before half the people who usually go to concerts were even born.
In the first season, the Mile One line-up consisted of every C List entertainer still alive and willing to go anywhere for a gig. It was a bit like flicking on any recent PBS fundraising telethon.
Seems the only guy they haven't tried to book is Frank Gorshin. Keith Coombs might check him out.
Frank even has a link to a raft of those guys who now turn up mostly on John Gushue's Trivia Crosstalk on CBC Radio. You know them, the kind of people only ubernerds like me remember.
Guys like Jawa Number 3 from Star Wars. (Seriously. He's there.) Or people who had one appearance in the original Star Trek as one or another guest star. Sorry guys, no expendable crewmen in red tunics.
C'mon Keith, there are enough Star Trek fans around to want to see Frank and his minor, minor, minor Star Trek alum again.
VOCM is reporting that country music singer George Jones is coming to Mile One to perform 50 years of hits. Yep a half century of country from a guy who retired from the business before half the people who usually go to concerts were even born.
In the first season, the Mile One line-up consisted of every C List entertainer still alive and willing to go anywhere for a gig. It was a bit like flicking on any recent PBS fundraising telethon.
Seems the only guy they haven't tried to book is Frank Gorshin. Keith Coombs might check him out.
Frank even has a link to a raft of those guys who now turn up mostly on John Gushue's Trivia Crosstalk on CBC Radio. You know them, the kind of people only ubernerds like me remember.
Guys like Jawa Number 3 from Star Wars. (Seriously. He's there.) Or people who had one appearance in the original Star Trek as one or another guest star. Sorry guys, no expendable crewmen in red tunics.
C'mon Keith, there are enough Star Trek fans around to want to see Frank and his minor, minor, minor Star Trek alum again.
31 March 2005
Kevin O'Brien for Health Minister
Tom Marshall must be some kind of bizarre two-legged homing pigeon. Either that or he is a binary traveler: St. Johns or Corner Brook.
How else to explain the story on VO's website today that the freshly minted acting health minister is out collecting information on cancer clinics by visiting Corner Brook?
He apparently said he is pleased with what he saw but thinks improvements will be needed in the future. Will that future be before or after changes in Grand Falls?
When is Tom headed to Grand Falls, anyway?
How else to explain the story on VO's website today that the freshly minted acting health minister is out collecting information on cancer clinics by visiting Corner Brook?
He apparently said he is pleased with what he saw but thinks improvements will be needed in the future. Will that future be before or after changes in Grand Falls?
When is Tom headed to Grand Falls, anyway?
Winter availability
For just a little background on the winter availability deals between CFLCo and Hydro Quebec, flip to these two releases:
1. Issued By Natural Resources Minister Ed Byrne last year.
Skip down a bit from the Premier's comments about reselling the power "outside the province" and you can easily see that what follows in the second link is actually the truth of it.
2. Issued by Paul Dicks as Mines and Energy Minister in 2000.
As the release says: "The release of this information by Newfoundland and Labrador Hydro should put to rest, once and for all, the misleading and inaccurate statements made by the Leader of the Opposition," said Minister Dicks. "Mr. Byrne is just plain wrong and his deliberate misrepresentation of the truth is irresponsible and detrimental to the people of Newfoundland and Labrador."
Go down a little bit more in the older release and you find this:
"The minister noted that without the GWAC and Shareholders’ Agreement, both of which arose from the March 9, 1998 Framework Agreement with Hydro Quebec, CF(L)Co would have been in financial jeopardy. Indeed, in the absence of such arrangements, it would have been possible for Hydro Quebec to take greater ownership and control of CF(L)Co. These agreements protect Newfoundland and Labrador’s interests over the long term," said the minister." [Emphasis added]
"These agreements have been very beneficial to Newfoundland and Labrador Hydro and to the province as a whole. In fact, the GWAC and Shareholders’ Agreement, as well as the 130 mw Recall Block arrangement, will result in revenues of $2 billion over the life of the deals. These revenues will be used to develop hydro resources in the province, contributing to our economy, and will also provide substantial revenues to government to support social and economic programs as required."
Geez, Danny and Ed, I guess the Liberals did such a fine job of running the place into the ground you just kept on doing the same things.
By the way, where was Ed Byrne yesterday in government's initial response to the Ontario/Quebec proposal?
1. Issued By Natural Resources Minister Ed Byrne last year.
Skip down a bit from the Premier's comments about reselling the power "outside the province" and you can easily see that what follows in the second link is actually the truth of it.
2. Issued by Paul Dicks as Mines and Energy Minister in 2000.
As the release says: "The release of this information by Newfoundland and Labrador Hydro should put to rest, once and for all, the misleading and inaccurate statements made by the Leader of the Opposition," said Minister Dicks. "Mr. Byrne is just plain wrong and his deliberate misrepresentation of the truth is irresponsible and detrimental to the people of Newfoundland and Labrador."
Go down a little bit more in the older release and you find this:
"The minister noted that without the GWAC and Shareholders’ Agreement, both of which arose from the March 9, 1998 Framework Agreement with Hydro Quebec, CF(L)Co would have been in financial jeopardy. Indeed, in the absence of such arrangements, it would have been possible for Hydro Quebec to take greater ownership and control of CF(L)Co. These agreements protect Newfoundland and Labrador’s interests over the long term," said the minister." [Emphasis added]
"These agreements have been very beneficial to Newfoundland and Labrador Hydro and to the province as a whole. In fact, the GWAC and Shareholders’ Agreement, as well as the 130 mw Recall Block arrangement, will result in revenues of $2 billion over the life of the deals. These revenues will be used to develop hydro resources in the province, contributing to our economy, and will also provide substantial revenues to government to support social and economic programs as required."
Geez, Danny and Ed, I guess the Liberals did such a fine job of running the place into the ground you just kept on doing the same things.
By the way, where was Ed Byrne yesterday in government's initial response to the Ontario/Quebec proposal?
More Churchill Stuff
Here's some additional information and observations on the Churchill hydroelectric issues.
Tomorrow, I would hope to see from the provincial government a list of all the proposals received with the names of the various companies or consortia (groups) that have expressed an interest in developing the Lower Churchill. We know enough about one proposal. Let's see the same level of detail from the others.
As a matter of accountability, that is the least we should expect at this point.
1. To start let's correct something I posted earlier about the Tobin plans for the Upper Churchill.
The rivers involved did flow south into Quebec. Seems the plan was to dam them and buildup the water level to the point where they could be diverted back to the Upper Churchill system. The environmental impacts and political costs associated with it were deemed too high and so the plan was scrapped. Without the added water, there was no value in adding more turbines to the Upper Churchill.
2. It is interesting to see Ontario again involved in the Lower Churchill. Those with memories will recall that in the negotiations between 1989 and 1992, Ontario was a part of the discussions. In fact the first meeting of energy ministers and officials, as I understand it, was held in the Ontario energy minister's office.
Talks continued until 1992 when the downturn in the economy made the project less attract. Quebec simply didn't respond to the last Newfoundland and Labrador proposal, preferring to "lay it aside" for the time being given the circumstances.
Incidentally, Quebec had made it clear that they felt they would be able to use all the Lower Churchill Power. Nonetheless, Ontario remained interested in the development since they were and are interested in new sources of electrical power.
3. It was interesting to hear Fortis' Stan Marshall on CBC radio this morning talking about the Ontario/Quebec proposal. Fortis has developed considerable expertise in electricity production and distribution throughout North America and Marshall's insights and advice should be taken into account.
He made many of the same observations that people have made before on the prospect of a Lower Churchill deal involving Quebec. Basically, it boils down to this, and these are my words (not Marshall's) for it:
- The Upper Churchill deal is in the past.
- If a deal with Quebec is a good deal, then let's sign it. The odds are small that the province will make the same sort of mistake as Brinco made made almost 40 years ago.
- Ontario's involvement is worthwhile for a number of reasons, not the least of which is to make the public perception in this province much better. Marshall called it optics. The main benefit they bring to the table is the ability to raise capital based on guaranteed Ontario purchases over a long period.
4. Overall, I'd still point to a few issues that we need to keep in mind:
- I am not yet convinced that the Grimes deal was quite as bad as people say. Maybe it is just the fact that the thing became such a political football, but I can't help but look at all the associations of all the people who condemned it to leave me with some doubts about the public perception of the last Lower Churchill deal.
- The odds of renegotiating the Upper Churchill deal are nil. That said, Hydro Quebec has been willing to look at creative ways of addressing some of the financial issues though things such as the winter availability contract that ultimately do nothing so much as keep CFLCo solvent and therefore in Newfoundland and Labrador Hydro's hands. Marshall's comments this morning on the Ontario/Quebec offer are likely to be very similar to what the provincial government will say if this is the proposal that is accepted for negotiation.
- The default provisions of the Upper Churchill deal (forestalled by things like winter availability) are likely in any deal on the Lower Churchill in a situation where someone else is fronting the cash. Private sector or public sector developers are likely to insist on the same thing or something like it involving substantial cash penalties for failing to deliver the power.
- Newfoundland and Labrador (including Hydro) lacks the ability to raise the needed capital to develop this project on its own. Even with purchase agreements with Canadian or US customers to backstop a funding request to the banks, the provincial government would be courting other financial problems if it tried to assume the debt for such a large project.
- There is likely very little appetite in Ottawa for pushing more cash or appearing to push more cash to Newfoundland and Labrador in the he wake of the crass way the provincial government handled the offshore talks from October to December last year. Paul Shelley just got politely shown the door. The Churchill projects wouldn't be any different, especially since the provincial governments in Ontario and Quebec can handle raising the needed capital.
Another few hours to go and we'll know more about what is happening.
Tomorrow, I would hope to see from the provincial government a list of all the proposals received with the names of the various companies or consortia (groups) that have expressed an interest in developing the Lower Churchill. We know enough about one proposal. Let's see the same level of detail from the others.
As a matter of accountability, that is the least we should expect at this point.
1. To start let's correct something I posted earlier about the Tobin plans for the Upper Churchill.
The rivers involved did flow south into Quebec. Seems the plan was to dam them and buildup the water level to the point where they could be diverted back to the Upper Churchill system. The environmental impacts and political costs associated with it were deemed too high and so the plan was scrapped. Without the added water, there was no value in adding more turbines to the Upper Churchill.
2. It is interesting to see Ontario again involved in the Lower Churchill. Those with memories will recall that in the negotiations between 1989 and 1992, Ontario was a part of the discussions. In fact the first meeting of energy ministers and officials, as I understand it, was held in the Ontario energy minister's office.
Talks continued until 1992 when the downturn in the economy made the project less attract. Quebec simply didn't respond to the last Newfoundland and Labrador proposal, preferring to "lay it aside" for the time being given the circumstances.
Incidentally, Quebec had made it clear that they felt they would be able to use all the Lower Churchill Power. Nonetheless, Ontario remained interested in the development since they were and are interested in new sources of electrical power.
3. It was interesting to hear Fortis' Stan Marshall on CBC radio this morning talking about the Ontario/Quebec proposal. Fortis has developed considerable expertise in electricity production and distribution throughout North America and Marshall's insights and advice should be taken into account.
He made many of the same observations that people have made before on the prospect of a Lower Churchill deal involving Quebec. Basically, it boils down to this, and these are my words (not Marshall's) for it:
- The Upper Churchill deal is in the past.
- If a deal with Quebec is a good deal, then let's sign it. The odds are small that the province will make the same sort of mistake as Brinco made made almost 40 years ago.
- Ontario's involvement is worthwhile for a number of reasons, not the least of which is to make the public perception in this province much better. Marshall called it optics. The main benefit they bring to the table is the ability to raise capital based on guaranteed Ontario purchases over a long period.
4. Overall, I'd still point to a few issues that we need to keep in mind:
- I am not yet convinced that the Grimes deal was quite as bad as people say. Maybe it is just the fact that the thing became such a political football, but I can't help but look at all the associations of all the people who condemned it to leave me with some doubts about the public perception of the last Lower Churchill deal.
- The odds of renegotiating the Upper Churchill deal are nil. That said, Hydro Quebec has been willing to look at creative ways of addressing some of the financial issues though things such as the winter availability contract that ultimately do nothing so much as keep CFLCo solvent and therefore in Newfoundland and Labrador Hydro's hands. Marshall's comments this morning on the Ontario/Quebec offer are likely to be very similar to what the provincial government will say if this is the proposal that is accepted for negotiation.
- The default provisions of the Upper Churchill deal (forestalled by things like winter availability) are likely in any deal on the Lower Churchill in a situation where someone else is fronting the cash. Private sector or public sector developers are likely to insist on the same thing or something like it involving substantial cash penalties for failing to deliver the power.
- Newfoundland and Labrador (including Hydro) lacks the ability to raise the needed capital to develop this project on its own. Even with purchase agreements with Canadian or US customers to backstop a funding request to the banks, the provincial government would be courting other financial problems if it tried to assume the debt for such a large project.
- There is likely very little appetite in Ottawa for pushing more cash or appearing to push more cash to Newfoundland and Labrador in the he wake of the crass way the provincial government handled the offshore talks from October to December last year. Paul Shelley just got politely shown the door. The Churchill projects wouldn't be any different, especially since the provincial governments in Ontario and Quebec can handle raising the needed capital.
Another few hours to go and we'll know more about what is happening.
The Churchill Options
As much as Premier Danny Williams might like to open development of the Lower Churchill to the world and have it developed using creative thinking, the whole project really boils down to a handful of issues and options.
1. Increased demand, but think Canadian before American. There is a growing demand for "clean" electrical energy, both in Canada and in the US. Quebec is actually a net importer of electricity. Ontario has a pressing need for new sources of power to replace some current nuclear capability or planned nuclear plant capacity. Both provinces need power from sources that don't contribute to greenhouse gas emissions.
The same can be said of the US marketplace, particularly New York state.
The most likely markets for Labrador power are in Canada.
2. There are basically only two ways out of Labrador. As much as Premier Williams may like to talk of Labrador electrical power as being a "world-class" resource, no one is likely to figure out how to send Labrador power to the People's Republic of China. Since we are looking at North American markets, we can either ship to or through Quebec or go across the Straits of Belle Isle to Newfoundland and then on to the mainland again via Port aux Basques.
The most economical way out of Labrador is through Quebec. The other route has significant engineering and other technical challenges that remain as they were in the 1960s when they were first proposed: very expensive.
3. There are basically two options for building the Lower Churchill plants.
a. Newfoundland and Labrador Hydro builds them, raising all the capital itself or with loan guarantees from the province and/or the federal government; or,
b. Someone else builds them: either public sector (Hydro Quebec) or private sector.
4. Who pays? With a debt level reaching closer to $14.0 billion, Newfoundland and Labrador has a limited capacity to assume any further debt directly or indirectly considering that the provincial government plans to keep running massive deficits for the next five years or more.
The latest provincial government estimate is that the project will cost in the neighbourhood of CDN$3.3 billion. Consider that to be a low estimate since it doesn't include a range of costs that would have to be factored into the final tally.
It is tempting to talk of using the new offshore money and the provincial government may look seriously at that option. Using a combination of cash and borrowing, the provincial government may be able to raise the necessary capital directly or through Newfoundland and Labrador Hydro. The economics of this approach have to be considered carefully, given that the oil cash is one-time money and revenues from the sale of power will have to reimburse the costs of construction (pay off the debt) before it could be used for other things.
Consider as well that Hydro would likely only turn over some of its net earnings to government as a dividend so the potential for generating large amounts of cash for the provincial treasury may not be as high as people might think.
Revenues must be competitive, as well. If the project required construction of new transmission lines over longer distances (the fabled power corridor), then Hydro would have to deal with much greater costs. In the Upper Churchill case, one of the continuing problems in developing the project was getting the power to market at a competitive rate and recover initial investments. We can't just charge what we want for the power - the industry is competitive.
In any event, the $2.0 billion from oil was supposed to pay down the provincial debt. As it now appears, the debt will continue to spiral. The "We build it" option would likely produce little more than an increased debt load in exchange for a modest increase in long-term revenue. We would spend a lot to make a little.
In the other option, the capital costs are borne by the private sector, as with the original Churchill project. Then the private sector legitimately reaps the lion's share of the revenues as a reward.
The decision matrix on this one is pretty easy to draw. I'll be curious to see how many concrete proposals actually arrive in the mail at the Natural Resources Building by five o'clock tomorrow. My guess is the number of proposals won't be nearly as high as the number of companies who inquired.
5. Two Columbos
One more thing: Linda Calvert did a short piece on Canada Now Wednesday evening on Churchill Falls. She made a comment that the Upper Churchill capacity can't be increased because the company (Churchill Falls Labrador Corporation) is contractually obligated to deliver a set minimum amount of power to Quebec. Any increased generating capacity (more turbines) might jeopardize that obligation.
Interesting.
The way I heard it is that Tobin's big promise to add two more turbines at the Upper Churchill in 1998 foundered when surveyors discovered that the rivers they planned to divert actually flowed the wrong way. The expansion couldn't proceed because of a lack of added water to push the extra turbines.
And one more, one last thing: Premier Williams has said in the past he wanted to link a "redress" of the Upper Churchill contract to development of the Lower Churchill with Quebec as a prospective partner. Don't hold your breath too long waiting for that. Much like the shell game of the "recall power sales", there might be some accommodation. I suspect that if anything ever came of any "redress", it would be much like the offshore deal: a lot less than the hucksters and pitchmen would have you believe.
Hands up anybody reading this besides me who has actually ever seen the Upper Churchill contract?
1. Increased demand, but think Canadian before American. There is a growing demand for "clean" electrical energy, both in Canada and in the US. Quebec is actually a net importer of electricity. Ontario has a pressing need for new sources of power to replace some current nuclear capability or planned nuclear plant capacity. Both provinces need power from sources that don't contribute to greenhouse gas emissions.
The same can be said of the US marketplace, particularly New York state.
The most likely markets for Labrador power are in Canada.
2. There are basically only two ways out of Labrador. As much as Premier Williams may like to talk of Labrador electrical power as being a "world-class" resource, no one is likely to figure out how to send Labrador power to the People's Republic of China. Since we are looking at North American markets, we can either ship to or through Quebec or go across the Straits of Belle Isle to Newfoundland and then on to the mainland again via Port aux Basques.
The most economical way out of Labrador is through Quebec. The other route has significant engineering and other technical challenges that remain as they were in the 1960s when they were first proposed: very expensive.
3. There are basically two options for building the Lower Churchill plants.
a. Newfoundland and Labrador Hydro builds them, raising all the capital itself or with loan guarantees from the province and/or the federal government; or,
b. Someone else builds them: either public sector (Hydro Quebec) or private sector.
4. Who pays? With a debt level reaching closer to $14.0 billion, Newfoundland and Labrador has a limited capacity to assume any further debt directly or indirectly considering that the provincial government plans to keep running massive deficits for the next five years or more.
The latest provincial government estimate is that the project will cost in the neighbourhood of CDN$3.3 billion. Consider that to be a low estimate since it doesn't include a range of costs that would have to be factored into the final tally.
It is tempting to talk of using the new offshore money and the provincial government may look seriously at that option. Using a combination of cash and borrowing, the provincial government may be able to raise the necessary capital directly or through Newfoundland and Labrador Hydro. The economics of this approach have to be considered carefully, given that the oil cash is one-time money and revenues from the sale of power will have to reimburse the costs of construction (pay off the debt) before it could be used for other things.
Consider as well that Hydro would likely only turn over some of its net earnings to government as a dividend so the potential for generating large amounts of cash for the provincial treasury may not be as high as people might think.
Revenues must be competitive, as well. If the project required construction of new transmission lines over longer distances (the fabled power corridor), then Hydro would have to deal with much greater costs. In the Upper Churchill case, one of the continuing problems in developing the project was getting the power to market at a competitive rate and recover initial investments. We can't just charge what we want for the power - the industry is competitive.
In any event, the $2.0 billion from oil was supposed to pay down the provincial debt. As it now appears, the debt will continue to spiral. The "We build it" option would likely produce little more than an increased debt load in exchange for a modest increase in long-term revenue. We would spend a lot to make a little.
In the other option, the capital costs are borne by the private sector, as with the original Churchill project. Then the private sector legitimately reaps the lion's share of the revenues as a reward.
The decision matrix on this one is pretty easy to draw. I'll be curious to see how many concrete proposals actually arrive in the mail at the Natural Resources Building by five o'clock tomorrow. My guess is the number of proposals won't be nearly as high as the number of companies who inquired.
5. Two Columbos
One more thing: Linda Calvert did a short piece on Canada Now Wednesday evening on Churchill Falls. She made a comment that the Upper Churchill capacity can't be increased because the company (Churchill Falls Labrador Corporation) is contractually obligated to deliver a set minimum amount of power to Quebec. Any increased generating capacity (more turbines) might jeopardize that obligation.
Interesting.
The way I heard it is that Tobin's big promise to add two more turbines at the Upper Churchill in 1998 foundered when surveyors discovered that the rivers they planned to divert actually flowed the wrong way. The expansion couldn't proceed because of a lack of added water to push the extra turbines.
And one more, one last thing: Premier Williams has said in the past he wanted to link a "redress" of the Upper Churchill contract to development of the Lower Churchill with Quebec as a prospective partner. Don't hold your breath too long waiting for that. Much like the shell game of the "recall power sales", there might be some accommodation. I suspect that if anything ever came of any "redress", it would be much like the offshore deal: a lot less than the hucksters and pitchmen would have you believe.
Hands up anybody reading this besides me who has actually ever seen the Upper Churchill contract?
The choice is ours - Goose Bay revisited
Since Thursday is turning out to be a Labrador day here at the Bond Papers, I thought I'd also reprint the text of a commentary done by your humble scribe for CBC Radio Morning Show last year.
As you can tell from the context, it was shortly after the provincial government hosted the American ambassador. The comments I made on the radar site are still valid: if the thing is built in Goose we are talking maybe 100 people plus their families. I still hold to the view that the Americans have no military interest in Goose Bay or Labrador generally as a site for their equipment. If an X-band radar winds up in Goose it will be built with Canadian money. But here again, I caution that National Defence has no operational interest in Goose Bay other than as a staging area. They don't need a base there.
Other than that, here's the commentary:
"US ambassador Paul Celucci didn’t go to Goose Bay last week to check out the training facilities. The American military already has bases that do everything Goose Bay can do or wants to do and more besides. The Americans, like the Germans, are closing bases at home and overseas. As the German ambassador keeps saying: how can you close bases at home and at the same time invest in new facilities at Canada?
In the modern context, that’s one of the reasons why pushing Goose Bay as a place to train pilots is like trying to grow cucumbers in Mount Pearl. Someone else can do it better and cheaper. What’s worse, the demand for pickles – in this case manned combat aircraft - is dropping. As a result, countries are changing their military forces to take advantage of new technology and lower their costs.
No small irony, then that the same week Celucci was being pitched on pilot training at Goose Bay, the Canadian Forces was testing a Predator remotely piloted vehicle from the same airport. Coupled with ground-based radar, like the surface wave system developed by Northern Radar of St. John’s and the American defence giant Raytheon, in the next five years, remotely piloted vehicles will do just about everything that needs to be done for coastal defence and security in Canada.
Count on it!
Ambassador Celucci is interested in Goose Bay as a possible site for part of the American ballistic missile defence system. For Goose Bay, though, being a BMD site won’t bring as many people to the community or as much money as people might think. That doesn’t mean Goose Bay won’t have military forces in its future. It’s just that the military options are limited. There may be better civilian opportunities for economic development in central Labrador, but for Goose Bay, the Cold War is finally over.
As for Premier Williams, he is really just making the same out-dated pitch his predecessors have used. Like Danny Williams now, Roger Grimes used to complain the federal government should be spending more money on Goose Bay.
That’s just misguided.
DND isn’t a regional economic subsidy program. The Canadian Forces do not train at Goose Bay now because they do not need Goose Bay. It is that simple. DND already spends too much on buildings it doesn’t need and doing jobs it just shouldn’t be doing.
Rather than gripe or chase old ideas, let’s look at something DND would be interested in – like strengthening the reserve forces here or basing Aurora patrol aircraft at Gander, both of which would actually improve Canadian defence capabilities.
The best defence-related economic potential for Newfoundland and Labrador isn’t in military bases at all. It’s in supplying goods and services. Northern Radar is one defence contractor in the province. Rutter, North Star, Stratos, GRI Simulations and others compete globally with the best and have produced thousands of jobs and millions of dollars in sales often without much meaningful support from the provincial government.
That needs to change, too.
As in Goose Bay last week, we can either reminisce about the good old days or be part of the future.
The choice is ours.
As you can tell from the context, it was shortly after the provincial government hosted the American ambassador. The comments I made on the radar site are still valid: if the thing is built in Goose we are talking maybe 100 people plus their families. I still hold to the view that the Americans have no military interest in Goose Bay or Labrador generally as a site for their equipment. If an X-band radar winds up in Goose it will be built with Canadian money. But here again, I caution that National Defence has no operational interest in Goose Bay other than as a staging area. They don't need a base there.
Other than that, here's the commentary:
"US ambassador Paul Celucci didn’t go to Goose Bay last week to check out the training facilities. The American military already has bases that do everything Goose Bay can do or wants to do and more besides. The Americans, like the Germans, are closing bases at home and overseas. As the German ambassador keeps saying: how can you close bases at home and at the same time invest in new facilities at Canada?
In the modern context, that’s one of the reasons why pushing Goose Bay as a place to train pilots is like trying to grow cucumbers in Mount Pearl. Someone else can do it better and cheaper. What’s worse, the demand for pickles – in this case manned combat aircraft - is dropping. As a result, countries are changing their military forces to take advantage of new technology and lower their costs.
No small irony, then that the same week Celucci was being pitched on pilot training at Goose Bay, the Canadian Forces was testing a Predator remotely piloted vehicle from the same airport. Coupled with ground-based radar, like the surface wave system developed by Northern Radar of St. John’s and the American defence giant Raytheon, in the next five years, remotely piloted vehicles will do just about everything that needs to be done for coastal defence and security in Canada.
Count on it!
Ambassador Celucci is interested in Goose Bay as a possible site for part of the American ballistic missile defence system. For Goose Bay, though, being a BMD site won’t bring as many people to the community or as much money as people might think. That doesn’t mean Goose Bay won’t have military forces in its future. It’s just that the military options are limited. There may be better civilian opportunities for economic development in central Labrador, but for Goose Bay, the Cold War is finally over.
As for Premier Williams, he is really just making the same out-dated pitch his predecessors have used. Like Danny Williams now, Roger Grimes used to complain the federal government should be spending more money on Goose Bay.
That’s just misguided.
DND isn’t a regional economic subsidy program. The Canadian Forces do not train at Goose Bay now because they do not need Goose Bay. It is that simple. DND already spends too much on buildings it doesn’t need and doing jobs it just shouldn’t be doing.
Rather than gripe or chase old ideas, let’s look at something DND would be interested in – like strengthening the reserve forces here or basing Aurora patrol aircraft at Gander, both of which would actually improve Canadian defence capabilities.
The best defence-related economic potential for Newfoundland and Labrador isn’t in military bases at all. It’s in supplying goods and services. Northern Radar is one defence contractor in the province. Rutter, North Star, Stratos, GRI Simulations and others compete globally with the best and have produced thousands of jobs and millions of dollars in sales often without much meaningful support from the provincial government.
That needs to change, too.
As in Goose Bay last week, we can either reminisce about the good old days or be part of the future.
The choice is ours.
RAF Goose Bay: a fond farewell
Today is the last day for the Royal Air Force detachment at Goose Bay.
CBC keeps referring to it as the "British" Royal Air Force as if there was another one.
In honour of this event, ending decades of British presence at the Goose, I offer up a column I wrote for the old Independent last year at this time. The federal defence minister had announced a bunch of obvious things and the local concerned citizens committee was still flogging old ideas about training.
What has changed in a year? Not much, sadly. The locals have switched from more low level training to an X-band radar. Go back and check my archives for early March to see some posts that point out the radar idea is not much better than the old Goose Bay obsession.
When it is all added up, though, the government still hasn't bothered to find anyone who actually udnerstands defence and can develop a sensible policy to get what can be had for Goose Bay. At the very least someone with a clue can save everyone from chasing nonsensical ideas.
For what it is worth, here's the column:
The panic is on to save Goose Bay.
Anybody paying attention has known for a few years the allies are reducing their training at Goose Bay. Defence minister David Pratt’s announcement the other day didn’t tell us anything we didn’t already know: in 2006, the current training agreements expire, but in the meantime there will be some activity. Apparently, Canada is going to look into setting up a new training centre at Goose Bay that let’s pilots fly supersonic, drop live weapons and do just about anything they would do in wartime except kill people. To make sure training stays for those last two years, the federal government is prepared to charge Germany, Britain and a couple of others only for their gas and sandwiches. Everything else is free.
There aren’t many surprises in all that. NATO air forces have been changing in the past 10 years, in part to save money, and in part to keep up with the role of air power in the modern world. The changes have meant fewer aircraft, for the most part, and the mission profiles have seen the low altitude role reduced dramatically. There is also an even greater need for training with allies, especially the United States.
The Luftwaffe, for example, has reduced the number of aircraft it flies and consolidated training in New Mexico. Why New Mexico? Well for one thing, the weather lets them fly round the clock all year. Second, the desert terrain is more like the land they might be flying over operationally. Third, the German pilots get to train with their major ally, the Americans. Fourth, they can also consolidate a bunch of different training for the army and air force, thereby saving a ton of money. Fifth, they can use the existing facilities in the U.S. that cover everything they need to do – supersonic, chaff, live weapons. Costs are cheaper and they are available today – not after a lengthy, expensive and sometimes difficult political process needed to start building from scratch as we would do at Goose Bay. Existing facilities at New Mexico are such an attractive option for the Germans that they invested more than US$40 million of their own money to build new hangars and offices there in 2000.
The slow-down at Goose has been coming for years, not like a Stealth fighter, but like a B-36 throttling up at the end of the runway. You couldn’t miss it, even if you were dead.
Officials in Newfoundland and Labrador didn’t miss it; they just followed a historic local pattern of ignoring the opportunities until a crisis emerged. Defence spending brings a lot of money to this province. Hundreds of millions of dollars comes from bases like Goose Bay, or from the reserve forces in the province. The money they spend comes in the form of salaries and purchased goods and services from local companies. In addition, though, a growing number of businesses throughout the province are landing contracts manufacturing components for military equipment or supplying communications and other high technology services. They generate as much or more in the private sector than the federal government could ever spend here. Those companies work without the recognition and support they should be receiving from government.
It really is time to take a new approach to defence. One of the most productive things the Williams government could do is hire someone who knows defence issues. Get someone who speaks the language understood by defence officials in the public and private sectors. Set him or her to work securing what we already have and identifying new opportunities for increasing public and private sector investment. The amounts at stake here for the whole province are considerably more than the $100 million some say the Goose training program generates. That new approach would ensure we are acting before decisions are made, not like Goose Bay, nuclear submarines, coastal patrol vessels, the Gander base or the NATO air weapons training centre where we have never been on the leading edge.
In the usual panic with these things, we wind up losing money. We discount our services, as defence minister David Pratt announced last week and as the Goose Bay lobby endorses. Worse still, we wind up competing in areas where others have a big advantage. Odds are really good that in building new infrastructure like supersonic and live weapons ranges, the taxpayers of this province and Canada will wind up eating the costs. That is in stark contrast to New Mexico where the Germans invested their own money to train. Wow!
A couple of weeks ago, The Sunday Independent profiled a local defence contracting coalition, Northstar Network. Companies in that venture are working to get a piece of the multi-billion dollar defence business, something they have already shown they can do. Local companies can compete successfully against the best in the world. They have shown it already. They play to our strengths. They plan. They work. They reap the benefits in jobs and profits.
There’s an old military saying: fail to plan; plan to fail. In this province, we know the truth of that axiom in just about every sector of the economy. It’s time to learn from our mistakes.
CBC keeps referring to it as the "British" Royal Air Force as if there was another one.
In honour of this event, ending decades of British presence at the Goose, I offer up a column I wrote for the old Independent last year at this time. The federal defence minister had announced a bunch of obvious things and the local concerned citizens committee was still flogging old ideas about training.
What has changed in a year? Not much, sadly. The locals have switched from more low level training to an X-band radar. Go back and check my archives for early March to see some posts that point out the radar idea is not much better than the old Goose Bay obsession.
When it is all added up, though, the government still hasn't bothered to find anyone who actually udnerstands defence and can develop a sensible policy to get what can be had for Goose Bay. At the very least someone with a clue can save everyone from chasing nonsensical ideas.
For what it is worth, here's the column:
The panic is on to save Goose Bay.
Anybody paying attention has known for a few years the allies are reducing their training at Goose Bay. Defence minister David Pratt’s announcement the other day didn’t tell us anything we didn’t already know: in 2006, the current training agreements expire, but in the meantime there will be some activity. Apparently, Canada is going to look into setting up a new training centre at Goose Bay that let’s pilots fly supersonic, drop live weapons and do just about anything they would do in wartime except kill people. To make sure training stays for those last two years, the federal government is prepared to charge Germany, Britain and a couple of others only for their gas and sandwiches. Everything else is free.
There aren’t many surprises in all that. NATO air forces have been changing in the past 10 years, in part to save money, and in part to keep up with the role of air power in the modern world. The changes have meant fewer aircraft, for the most part, and the mission profiles have seen the low altitude role reduced dramatically. There is also an even greater need for training with allies, especially the United States.
The Luftwaffe, for example, has reduced the number of aircraft it flies and consolidated training in New Mexico. Why New Mexico? Well for one thing, the weather lets them fly round the clock all year. Second, the desert terrain is more like the land they might be flying over operationally. Third, the German pilots get to train with their major ally, the Americans. Fourth, they can also consolidate a bunch of different training for the army and air force, thereby saving a ton of money. Fifth, they can use the existing facilities in the U.S. that cover everything they need to do – supersonic, chaff, live weapons. Costs are cheaper and they are available today – not after a lengthy, expensive and sometimes difficult political process needed to start building from scratch as we would do at Goose Bay. Existing facilities at New Mexico are such an attractive option for the Germans that they invested more than US$40 million of their own money to build new hangars and offices there in 2000.
The slow-down at Goose has been coming for years, not like a Stealth fighter, but like a B-36 throttling up at the end of the runway. You couldn’t miss it, even if you were dead.
Officials in Newfoundland and Labrador didn’t miss it; they just followed a historic local pattern of ignoring the opportunities until a crisis emerged. Defence spending brings a lot of money to this province. Hundreds of millions of dollars comes from bases like Goose Bay, or from the reserve forces in the province. The money they spend comes in the form of salaries and purchased goods and services from local companies. In addition, though, a growing number of businesses throughout the province are landing contracts manufacturing components for military equipment or supplying communications and other high technology services. They generate as much or more in the private sector than the federal government could ever spend here. Those companies work without the recognition and support they should be receiving from government.
It really is time to take a new approach to defence. One of the most productive things the Williams government could do is hire someone who knows defence issues. Get someone who speaks the language understood by defence officials in the public and private sectors. Set him or her to work securing what we already have and identifying new opportunities for increasing public and private sector investment. The amounts at stake here for the whole province are considerably more than the $100 million some say the Goose training program generates. That new approach would ensure we are acting before decisions are made, not like Goose Bay, nuclear submarines, coastal patrol vessels, the Gander base or the NATO air weapons training centre where we have never been on the leading edge.
In the usual panic with these things, we wind up losing money. We discount our services, as defence minister David Pratt announced last week and as the Goose Bay lobby endorses. Worse still, we wind up competing in areas where others have a big advantage. Odds are really good that in building new infrastructure like supersonic and live weapons ranges, the taxpayers of this province and Canada will wind up eating the costs. That is in stark contrast to New Mexico where the Germans invested their own money to train. Wow!
A couple of weeks ago, The Sunday Independent profiled a local defence contracting coalition, Northstar Network. Companies in that venture are working to get a piece of the multi-billion dollar defence business, something they have already shown they can do. Local companies can compete successfully against the best in the world. They have shown it already. They play to our strengths. They plan. They work. They reap the benefits in jobs and profits.
There’s an old military saying: fail to plan; plan to fail. In this province, we know the truth of that axiom in just about every sector of the economy. It’s time to learn from our mistakes.
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