Premier Danny Williams and natural resources minister Ed Byrne held a scrum in the Confederation Building this morning to call on Abitibi Consolidated [ACI] to decide what the company plans to do about the government's latest offer on Stephenville and Grand Falls-Windsor.
Two things:
1. ACI has made no public comment on anything since talks broke off almost a month ago. The recent re-start of talks has gone by without any comment from the company but lots of "hope" and "optimism" from government. This smells like a case of monkey-tossing.
2. ACI announced on 20 October 2005 that it would hold a news conference tomorrow to...release third quarter results for the company just as it has done for each quarter for the past year or more. And just as the company has done faithfully, that will almost inevitably include a further statement on the company's plans to shut down Stephenville and one machine at Grand Falls-Windsor.
Taken all together, that makes today's comments by the Premier a case of calling for the sun to rise. He knows full well there is an announcement coming.
Here's the part he didn't say: Stephenville will close and Grand Falls-Windsor will lose one of its two machines. The Premier has known it for some time, at least back as far as the time ACI announced the closures.
How do I know? If anything else were going to happen, there would be a giant news conference involving the company and the provincial government.
In a case like this, a scrum means there's bad news coming.
25 October 2005
24 October 2005
If it's Ontario, it must be true
Yeah, like the Liberal Party isn't getting ready for an election across the country.
The Hill Times catches up.
The Hill Times catches up.
Paul Martin - from the Press Gallery
"Hey Stevie! Boooga booga!
The writ drops in November."
At the annual Ottawa Press Gallery dinner, Prime Minister Paul Martin mugs for the camera. [via Rick Mercer]
Some of Martin's speech made the radio and it was damned funny. Don't take my word for it. Go check Rick's site.
Ditto for Stevie Harper, who does a wicked Brian Mulroney impression. Then again, Peter MacKay, DDS, did the same schtick in 2003.
While you're over there, check out Rick's posting on his recent trip to Afghanistan. There are some great photos and some pretty funny accounts of events there.
Flag poll
There wasn't much surprise in the results of a poll on the provincial flag, commissioned by the Premier's Office and given by the office to The Independent.
Almost half wanted to keep things just as they are with barely a quarter of respondents supporting the pink, white and green.
The poll was like done by Ryan Research, although, oddly, the story doesn't identify who did the research for the Premier.
What was surprising? That the Premier, who is adamantly fighting any effort to gain public access to eight polls he commissioned from Ryan Research, released this one without any formal request.
No surprise that he released it to the Spindy, since the paper is basically acting as the Premier's unofficial mouthpiece.
Almost half wanted to keep things just as they are with barely a quarter of respondents supporting the pink, white and green.
The poll was like done by Ryan Research, although, oddly, the story doesn't identify who did the research for the Premier.
What was surprising? That the Premier, who is adamantly fighting any effort to gain public access to eight polls he commissioned from Ryan Research, released this one without any formal request.
No surprise that he released it to the Spindy, since the paper is basically acting as the Premier's unofficial mouthpiece.
Spending the future
" [The change in the province's financial outlook] That's very dramatic...Some people are going to stand back and say 'Oh yeah, that's just because your very lucky. That's because the oil prices have gone up.' Well, no. That's part of it. But we had a tough budget, a prudent budget. We've managed the province, fiscally, very tightly."
Premier Danny Williams
Quoted in "Cash boon may fund province's infrastructure"
by Rob Antle, The Telegram, 22 October 2005, p. A3
Premier Danny Williams
Quoted in "Cash boon may fund province's infrastructure"
by Rob Antle, The Telegram, 22 October 2005, p. A3
Premier Danny Williams is absolutely correct.
The provincial government's financial state is a direct result of oil and gas revenues. High oil prices have produced a boost beyond what the Real Atlantic Accord, the offshore royalty regimes and development at Voisey's Bay would have produced anyway.
Unfortunately, the premier's positive comments may have two unwelcome results. First it may make it seem as though the province can afford to increase spending in a number of ways. Second, his comments divert attention away from the fundamental failure of the Williams administration, two years into its mandate, to produce integrated plans to address the province's financial windfalls in a way that will yield the greatest long term benefit.
Let us deal first with the overall financial situation.
The Premier stated that the "consolidated deficit [this year] could be down in the range $100 [million], $200 [million] range" from the $492 million accrual deficit forecast in March. The Premier proposed to spend at least some of this money on infrastructure, especially in rural Newfoundland and Labrador.
Let us be clear: the $492 million shortfall forecast in March 2005, indeed all the accrual deficits forecast by the provincial government, include significant components that are made up of several unfunded liabilities.
The Premier's comments come from adding into his calculations the huge amount of money coming from the offshore. This year it is reputedly in the range of $400 million beyond what was projected. The provincial government's own figures, used by economist Wade Locke, showed that the province's offshore revenues would be $600 million this year. This was based on oil at about US$15 per barrel lower than current market prices.
His comments about the improved financial situation are also based on growth in the province's economy (gross domestic product or GDP), as well as changes to the structure of the debt that themselves reflect long term efforts by successive administrations since 1989.
On the face of it, the debt to gross-domestic-product [GDP] ratio seems greatly improved. In 1991, for example, the province's total debt was 65% of the provincial GDP. Its accrual debt was approaching 100% of GDP.
In Fiscal Year 2004, by contrast, the total debt was 44% and its accrual debt was about 50% of GDP. This change was entirely due to growth in the provincial economy. Little if any debt was retired in the intervening 13 years; in fact the provincial government and its agencies owed more money in 2004 than in 1991.
One substantive positive change, however was the reduction of debt held in foreign currencies. In 1991, almost half the province's direct debt was held in expensive foreign currencies and much of the debt was held at high interest rates. This greatly increased the amount needed to service the debt, that is, to make the interest payments. By FY 2004, less than 22% of the debt was in foreign currencies and government continued to roll over its high interest debt in lower-rate loans. Such is the improvement that in 2004, the province was paying slightly less to service its debt than it was a decade earlier yet the total debt (not accrual) was actually $2.0 billion more and debt servicing accounted for 13% of total government expenditures compared to 15% in 1994. Looked at another way, in constant dollars, the provincial government is actually spending less on servicing its debt than it was in the early 1990s despite owing almost 40% more.
An increased debt load with what are admittedly transient increases in both the economy and provincial revenues do not make for a windfall. Nor does it support dramatic increases in program spending or capital works.
Consider as well that in his remarks to the Telegram editorial board, Premier Williams spoke of spending the supposed windfall on public infrastructure around the province, especially in rural Newfoundland and Labrador. In 2004, infrastructure cash was supposed to come from a new transfer payment from the Government of Canada designed to offset Equalization losses.
That deal, when it was finally signed, actually did not effectively double offshore revenues, as the Premier had originally sought. Instead, it added a single lump sum payment of $2.0 billion. That money sits collecting interest at a rate of about $5.0 million per month, with no publicly announced plans on what the government plans to do with either the $2.0 billion or any of the $60 million in interest coming from it.
Against this backdrop, one must look at the Premier's comments with some degree of concern. The provincial government still has no coherent plan for tackling the long-term financial issues identified by PriceWaterhouseCoopers. There is no commitment to paying off debt.
The "revitalization" of rural Newfoundland and Labrador, embodied in the Williams administration's Rural Secretariat is merely a slightly revamped version of the ruralist approach of the previous Grimes and Tobin governments. This was simply a collection of short-sighted efforts to avoid dealing with the substantive changes coming to much of Newfoundland Labrador as a result of changes in demographics and in the economy.
One of the last acts of the Wells administration, in December 1995, was to approve release of a discussion paper on a Strategic Social Plan [SSP] for Newfoundland and Labrador. While the incoming Tobin administration scrapped the planned release and ordered copies destroyed, some have survived. The introductory essay describes the looming changes in simple and compelling detail.
Beyond the outmigration resulting from the collapse of the cod fishery and the then-anticipated economic growth from oil and Voisey's Bay (see the conclusions of the 2002 provincial report linked above), rural Newfoundland and Labrador would change dramatically from what it had been. A chronically low birth rate would produce an internal migration from small coastal communities to larger centres. Changes in the fishery would reduce the number of workers there and, if allowed to take its natural course, the fishing industry would dramatically lower the number of people employed while increasing the earnings of those involved. Overall, the workforce would be smaller than the non-working population - the so-called dependent population - for the first time in many decades.
Newfoundland and Labrador is not alone in this respect. Quebec is in much the same situation, as the recent Quebec Lucide manifesto reveals.
At home, we have a curious mixture of action from the provincial government. On the one hand, the provincial government's raw materials sharing plan for the crab industry reflected yet another attempt to forestall changes that demographics and economics would otherwise produce in Newfoundland and Labrador. This echoed the actions of both Brian Tobin and Roger Grimes.
At the same time, Premier Williams comments to the Telegram echo the Strategic Economic Plan [SEP] and the real Strategic Social Plan of the Wells administration. His description of regional hubs and a focus on local strengths as a means of diversifying local economies around the province are lifted almost word for word from the SEP and comments by Clyde Wells.
What appears to be missing from the Williams administration is a clear-eyed vision of the province's challenges and of its solutions. Both the Wells SEP and SSP had such a vision, derived not from the Premier's Office or Clyde Wells' own predilections but from intensive discussion among the province's own people. That the development vision survives today as core economic development policies from the Williams' administration is testament to its fundamental strength.
Before the Premier starts spending any of the windfalls he has coming this year and over the next five years or so, he might want to actually produce an integrated economic and social plan. The many promises of plans contained in the last Throne Speech, indeed all the promises of plan that have been made since October 2003, do not add up to very much of anything at all.
The clock is indeed ticking and before we spend the future of the province and its people, the Premier and his administration might be well advised to climb up and tree, see what the future may bring and set the province on the course.
A little straight talk often times goes a long further than singing one's praises to earn both proper recognition for the good job done already and continued support for the journey ahead.
The provincial government's financial state is a direct result of oil and gas revenues. High oil prices have produced a boost beyond what the Real Atlantic Accord, the offshore royalty regimes and development at Voisey's Bay would have produced anyway.
Unfortunately, the premier's positive comments may have two unwelcome results. First it may make it seem as though the province can afford to increase spending in a number of ways. Second, his comments divert attention away from the fundamental failure of the Williams administration, two years into its mandate, to produce integrated plans to address the province's financial windfalls in a way that will yield the greatest long term benefit.
Let us deal first with the overall financial situation.
The Premier stated that the "consolidated deficit [this year] could be down in the range $100 [million], $200 [million] range" from the $492 million accrual deficit forecast in March. The Premier proposed to spend at least some of this money on infrastructure, especially in rural Newfoundland and Labrador.
Let us be clear: the $492 million shortfall forecast in March 2005, indeed all the accrual deficits forecast by the provincial government, include significant components that are made up of several unfunded liabilities.
The Premier's comments come from adding into his calculations the huge amount of money coming from the offshore. This year it is reputedly in the range of $400 million beyond what was projected. The provincial government's own figures, used by economist Wade Locke, showed that the province's offshore revenues would be $600 million this year. This was based on oil at about US$15 per barrel lower than current market prices.
His comments about the improved financial situation are also based on growth in the province's economy (gross domestic product or GDP), as well as changes to the structure of the debt that themselves reflect long term efforts by successive administrations since 1989.
On the face of it, the debt to gross-domestic-product [GDP] ratio seems greatly improved. In 1991, for example, the province's total debt was 65% of the provincial GDP. Its accrual debt was approaching 100% of GDP.
In Fiscal Year 2004, by contrast, the total debt was 44% and its accrual debt was about 50% of GDP. This change was entirely due to growth in the provincial economy. Little if any debt was retired in the intervening 13 years; in fact the provincial government and its agencies owed more money in 2004 than in 1991.
One substantive positive change, however was the reduction of debt held in foreign currencies. In 1991, almost half the province's direct debt was held in expensive foreign currencies and much of the debt was held at high interest rates. This greatly increased the amount needed to service the debt, that is, to make the interest payments. By FY 2004, less than 22% of the debt was in foreign currencies and government continued to roll over its high interest debt in lower-rate loans. Such is the improvement that in 2004, the province was paying slightly less to service its debt than it was a decade earlier yet the total debt (not accrual) was actually $2.0 billion more and debt servicing accounted for 13% of total government expenditures compared to 15% in 1994. Looked at another way, in constant dollars, the provincial government is actually spending less on servicing its debt than it was in the early 1990s despite owing almost 40% more.
An increased debt load with what are admittedly transient increases in both the economy and provincial revenues do not make for a windfall. Nor does it support dramatic increases in program spending or capital works.
Consider as well that in his remarks to the Telegram editorial board, Premier Williams spoke of spending the supposed windfall on public infrastructure around the province, especially in rural Newfoundland and Labrador. In 2004, infrastructure cash was supposed to come from a new transfer payment from the Government of Canada designed to offset Equalization losses.
That deal, when it was finally signed, actually did not effectively double offshore revenues, as the Premier had originally sought. Instead, it added a single lump sum payment of $2.0 billion. That money sits collecting interest at a rate of about $5.0 million per month, with no publicly announced plans on what the government plans to do with either the $2.0 billion or any of the $60 million in interest coming from it.
Against this backdrop, one must look at the Premier's comments with some degree of concern. The provincial government still has no coherent plan for tackling the long-term financial issues identified by PriceWaterhouseCoopers. There is no commitment to paying off debt.
The "revitalization" of rural Newfoundland and Labrador, embodied in the Williams administration's Rural Secretariat is merely a slightly revamped version of the ruralist approach of the previous Grimes and Tobin governments. This was simply a collection of short-sighted efforts to avoid dealing with the substantive changes coming to much of Newfoundland Labrador as a result of changes in demographics and in the economy.
One of the last acts of the Wells administration, in December 1995, was to approve release of a discussion paper on a Strategic Social Plan [SSP] for Newfoundland and Labrador. While the incoming Tobin administration scrapped the planned release and ordered copies destroyed, some have survived. The introductory essay describes the looming changes in simple and compelling detail.
Beyond the outmigration resulting from the collapse of the cod fishery and the then-anticipated economic growth from oil and Voisey's Bay (see the conclusions of the 2002 provincial report linked above), rural Newfoundland and Labrador would change dramatically from what it had been. A chronically low birth rate would produce an internal migration from small coastal communities to larger centres. Changes in the fishery would reduce the number of workers there and, if allowed to take its natural course, the fishing industry would dramatically lower the number of people employed while increasing the earnings of those involved. Overall, the workforce would be smaller than the non-working population - the so-called dependent population - for the first time in many decades.
Newfoundland and Labrador is not alone in this respect. Quebec is in much the same situation, as the recent Quebec Lucide manifesto reveals.
At home, we have a curious mixture of action from the provincial government. On the one hand, the provincial government's raw materials sharing plan for the crab industry reflected yet another attempt to forestall changes that demographics and economics would otherwise produce in Newfoundland and Labrador. This echoed the actions of both Brian Tobin and Roger Grimes.
At the same time, Premier Williams comments to the Telegram echo the Strategic Economic Plan [SEP] and the real Strategic Social Plan of the Wells administration. His description of regional hubs and a focus on local strengths as a means of diversifying local economies around the province are lifted almost word for word from the SEP and comments by Clyde Wells.
What appears to be missing from the Williams administration is a clear-eyed vision of the province's challenges and of its solutions. Both the Wells SEP and SSP had such a vision, derived not from the Premier's Office or Clyde Wells' own predilections but from intensive discussion among the province's own people. That the development vision survives today as core economic development policies from the Williams' administration is testament to its fundamental strength.
Before the Premier starts spending any of the windfalls he has coming this year and over the next five years or so, he might want to actually produce an integrated economic and social plan. The many promises of plans contained in the last Throne Speech, indeed all the promises of plan that have been made since October 2003, do not add up to very much of anything at all.
The clock is indeed ticking and before we spend the future of the province and its people, the Premier and his administration might be well advised to climb up and tree, see what the future may bring and set the province on the course.
A little straight talk often times goes a long further than singing one's praises to earn both proper recognition for the good job done already and continued support for the journey ahead.
23 October 2005
Reprint: Outside the box - Time
Here's a reprint of a column originally published in The Independent, January 2004.
It seems appropriate to reprint it now, especially considering that the Premier's comments on his second anniversary in office refer to how much they are still working on.
At the time the column appeared, the view inside the administration was that they would do things at their own pace.
That's certainly been true, but the fundamental point of the column - about the need to get moving quickly - seems to be more relevant with each passing date.
Time
by Ed Hollett
A new government has a very small amount of time in which to lay the groundwork for its term of office. It has about six months to show things are different and about a year to start showing signs of results. In fact, they really have about 100 days to make a mark, and when it comes to things like re-organizing the departments and getting political and public service staff changes made, they have even less than that.
The reasons are pretty simple: The outside world wants to figure out what government they really elected. For the government itself, they need to sort out the basics so they can cope with the onslaught of demands that come with the force of a three inch fire hose. Put another way, the new government has a short time to take control of the public agenda. That'’s the only way they can filter the workload down to a manageable level, let alone do the things they want to do. Without control of the political agenda, they become followers rather than leaders.
The Williams government is remarkable because it looks like a party that is at the end of its life in power rather than the beginning. It doesn'’t have control of the political agenda. Even something as simple as the long-awaited appointment of Doug House was announced and interpreted by CBC television rather than the Premier'’s Office. Add that to the obvious confusion in the Premier'’s messages, his testiness in answering media questions, and the lack of any meaningful signs of a change, let alone "“The Plan"”. The Stunnel, the Premier'’s hobbyhorse, is the sort of ludicrous mega-project that seems more worthy of Brian Peckford in his last days than a newly- elected Premier with the well-deserved reputation of being a level-headed leader.
We don'’t have to go back too far in time to see a government that didn'’t have control of the political agenda. The Tobin government, described by one of Tobin'’s closest advisors as having "“no idea what we are doing"”, lost control of the agenda from the start. Tobin plummeted in the polls his first year in office, and for the rest of his sojourn, the province was treated to an endless string of half-assed decisions, many of them made up by the Premier in the back seat of his chauffeur-driven car.
The best example of a government that didn'’t control the agenda is the Grimes administration. For a whole bunch of reasons, Roger Grimes never seemed to find his mark, let alone make it. The most glaring display of Grimes'’ weakness was in contract negotiations with public sector unions. The unions defined the problem and the solution: more people and more money. Government never even got into the discussion. Grimes was beaten in a fair fight, but cost was never considered.
What was really lost over the past seven years, though wasn'’t control. It was opportunity. A raft of things begun in the early 90s, from economic development to government reform, came to a screeching halt in 1996. The Williams party got wide support last October in large part because they were promoting a vision that cuts across party lines.
The Premier and the cabinet he leads are as good as any cabinet we have had. They are intelligent, capable and well-intentioned. People want to see their vision put to practice. They want Danny to succeed.
If the new government thinks the water is flowing through the hose at high speed now, get ready. The unions will likely launch their public campaign in the days and weeks ahead. The last time they faced a government that was disjointed and disorganized, the unions cleaned up.
A new government has a very short period in which to make its mark.
The clock is ticking.
It seems appropriate to reprint it now, especially considering that the Premier's comments on his second anniversary in office refer to how much they are still working on.
At the time the column appeared, the view inside the administration was that they would do things at their own pace.
That's certainly been true, but the fundamental point of the column - about the need to get moving quickly - seems to be more relevant with each passing date.
Time
by Ed Hollett
A new government has a very small amount of time in which to lay the groundwork for its term of office. It has about six months to show things are different and about a year to start showing signs of results. In fact, they really have about 100 days to make a mark, and when it comes to things like re-organizing the departments and getting political and public service staff changes made, they have even less than that.
The reasons are pretty simple: The outside world wants to figure out what government they really elected. For the government itself, they need to sort out the basics so they can cope with the onslaught of demands that come with the force of a three inch fire hose. Put another way, the new government has a short time to take control of the public agenda. That'’s the only way they can filter the workload down to a manageable level, let alone do the things they want to do. Without control of the political agenda, they become followers rather than leaders.
The Williams government is remarkable because it looks like a party that is at the end of its life in power rather than the beginning. It doesn'’t have control of the political agenda. Even something as simple as the long-awaited appointment of Doug House was announced and interpreted by CBC television rather than the Premier'’s Office. Add that to the obvious confusion in the Premier'’s messages, his testiness in answering media questions, and the lack of any meaningful signs of a change, let alone "“The Plan"”. The Stunnel, the Premier'’s hobbyhorse, is the sort of ludicrous mega-project that seems more worthy of Brian Peckford in his last days than a newly- elected Premier with the well-deserved reputation of being a level-headed leader.
We don'’t have to go back too far in time to see a government that didn'’t have control of the political agenda. The Tobin government, described by one of Tobin'’s closest advisors as having "“no idea what we are doing"”, lost control of the agenda from the start. Tobin plummeted in the polls his first year in office, and for the rest of his sojourn, the province was treated to an endless string of half-assed decisions, many of them made up by the Premier in the back seat of his chauffeur-driven car.
The best example of a government that didn'’t control the agenda is the Grimes administration. For a whole bunch of reasons, Roger Grimes never seemed to find his mark, let alone make it. The most glaring display of Grimes'’ weakness was in contract negotiations with public sector unions. The unions defined the problem and the solution: more people and more money. Government never even got into the discussion. Grimes was beaten in a fair fight, but cost was never considered.
What was really lost over the past seven years, though wasn'’t control. It was opportunity. A raft of things begun in the early 90s, from economic development to government reform, came to a screeching halt in 1996. The Williams party got wide support last October in large part because they were promoting a vision that cuts across party lines.
The Premier and the cabinet he leads are as good as any cabinet we have had. They are intelligent, capable and well-intentioned. People want to see their vision put to practice. They want Danny to succeed.
If the new government thinks the water is flowing through the hose at high speed now, get ready. The unions will likely launch their public campaign in the days and weeks ahead. The last time they faced a government that was disjointed and disorganized, the unions cleaned up.
A new government has a very short period in which to make its mark.
The clock is ticking.
21 October 2005
PetroNewf corporate logo
A nice picture of a one year old Newfoundland dog, the only creature it is politically correcte to refer to as a Newf.I think it's an appropriate symbol of our new oil ands gas company.
If nothing else, it's just a nice picture.
Hydro not bled white or dry or anything else - amended
Premier Danny Williams loves hyperbole.
That is exaggeration, usually for effect, but typically for its own sake.
You've heard it before: "The debt and deficit was the worst in the history of mankind on the planet. I performed a miracle [almost a verbatim quote] and magically reduced it in less than a year to a manageable size. David had nothing on me. I slay giants in my spare time."
That sort of stuff.
Looks funny when you write it down. It's amazing the number of people though that will listen to that stuff and bob their heads up and down in agreement that surely this Messiah is the true one. [Unlike all the other ones we've bobbed our heads for. The last hyperbole freak was Tobin, before that it was Peckford and before that Smallwood, the Superfreak of hyperbole freaks.]
Anyway, in an interview with David Cochrane on CBC Radio this morning, Premier Danny Williams proudly announced that government is going to stop taking dividends fromNewfoundland and Labrador Hydro PetroNewf to balance the provincial books.
This is good. It's a simple announcement.
The reason? Well, for one thing the oil money flowing so heavily means that the province doesn't need the Hydro cash desperately like it did say 12 years ago. For another thing, the Premier wants to leave all of PetroNewf's money with PetroNewf so it can do things like buy an equity stake in the offshore.
He said something to the effect that PetroNewf was being bled dry and its debt run up by government taking out cash which, of course, sent the patented Spin-o-meter into the redline.
Ok. There are two separate issues here.
One is the debt increase at PetroNewf. That was caused by PetroNewf building a bunch of new hydro generation projects.
The second was the issue of taking dividends - drawing from PetroNewf's annual net profit - to balance the books.
Here's what that looks like.
According to its 2004 annual statement, PetroNewf has in the bank doing nothing about $350 million labeled "retained earnings". Another for it is accumulated net profit - the money left after all the bills are paid. It is down slightly from the early 1990s when the retained earnings were over $500 million.
The thing is that back in the days when it was Hydro, PetroNewf made money just about every year. The government started taking a dividend in the midst of the truly worst financial crisis since the collapse of Responsible Government when they needed it. Until Tobin arrived, that money was always the current years earnings which meant that the little nest egg of retained earnings was never harmed.
Brian Tobin and later Roger Grimes started dipping deeper into the pot. If you check the 2001 PetroNewf annual financial statement, the retained earnings are where they were a decade earlier - over $500 million. There has been a decline in this surplus cash on hand since then, but even after the Grimes draw-downs, and paying off Brian Tobin's $57 million Lower Churchill slush fund, PetroNewf has hardly been bled even to a shade of cream, let alone white.
With that bit of prime ministerial exaggeration out of the way, maybe we can take a look see what it would cost to purchase an equity stake in the offshore.
That is exaggeration, usually for effect, but typically for its own sake.
You've heard it before: "The debt and deficit was the worst in the history of mankind on the planet. I performed a miracle [almost a verbatim quote] and magically reduced it in less than a year to a manageable size. David had nothing on me. I slay giants in my spare time."
That sort of stuff.
Looks funny when you write it down. It's amazing the number of people though that will listen to that stuff and bob their heads up and down in agreement that surely this Messiah is the true one. [Unlike all the other ones we've bobbed our heads for. The last hyperbole freak was Tobin, before that it was Peckford and before that Smallwood, the Superfreak of hyperbole freaks.]
Anyway, in an interview with David Cochrane on CBC Radio this morning, Premier Danny Williams proudly announced that government is going to stop taking dividends from
This is good. It's a simple announcement.
The reason? Well, for one thing the oil money flowing so heavily means that the province doesn't need the Hydro cash desperately like it did say 12 years ago. For another thing, the Premier wants to leave all of PetroNewf's money with PetroNewf so it can do things like buy an equity stake in the offshore.
He said something to the effect that PetroNewf was being bled dry and its debt run up by government taking out cash which, of course, sent the patented Spin-o-meter into the redline.
Ok. There are two separate issues here.
One is the debt increase at PetroNewf. That was caused by PetroNewf building a bunch of new hydro generation projects.
The second was the issue of taking dividends - drawing from PetroNewf's annual net profit - to balance the books.
Here's what that looks like.
According to its 2004 annual statement, PetroNewf has in the bank doing nothing about $350 million labeled "retained earnings". Another for it is accumulated net profit - the money left after all the bills are paid. It is down slightly from the early 1990s when the retained earnings were over $500 million.
The thing is that back in the days when it was Hydro, PetroNewf made money just about every year. The government started taking a dividend in the midst of the truly worst financial crisis since the collapse of Responsible Government when they needed it. Until Tobin arrived, that money was always the current years earnings which meant that the little nest egg of retained earnings was never harmed.
Brian Tobin and later Roger Grimes started dipping deeper into the pot. If you check the 2001 PetroNewf annual financial statement, the retained earnings are where they were a decade earlier - over $500 million. There has been a decline in this surplus cash on hand since then, but even after the Grimes draw-downs, and paying off Brian Tobin's $57 million Lower Churchill slush fund, PetroNewf has hardly been bled even to a shade of cream, let alone white.
With that bit of prime ministerial exaggeration out of the way, maybe we can take a look see what it would cost to purchase an equity stake in the offshore.
The future of Hebron and gas development offshore Newfoundland and Labrador
Having worked at NOIA for a short period, I decided to take a second look at the conference next week focusing on future offshore developments. It's sold out, so don't bother trying to get tickets.
No doubt people have been buying up luncheon tickets to hear PetroNewf chief executive officer Ed Martin explain how a Crown corporation with absolutely no experience in oil and gas is somehow going to muscle its way into the oil and gas business.
The real value of this conference is the working sessions [see agenda] and anyone with tickets is going to get a real earful of solid information.
The morning sessions focus on heavy oil and the Hebron project. It promises to be a heavily technical discussion.
The provincial government and the companies are still trying to figure out a benefits deal, so the project is not ready for sanction, that is, it isn't ready to go to the offshore board for approval. Premier Williams appears to be trying to saddle Hebron with a host of "local benefits" that aren't needed to bring the field on stream, which will drive up the cost of development and in the process might well reduce the revenue stream to the provincial government - much like the Peckford-era Hibernia deal.
At some point - maybe in four years time when Danny Williams is out of office - the companies can cut a deal with the provincial government and the project will finally start. Major international companies like Chevron make long-range plans, and as the Kazakhstan projects demonstrate, they are quite prepared to work diligently over a long period of time for the right moment to develop the right oil field. Having spent 20 years waiting to bring Hebron on stream, the consortium can hardly be deterred by the prospect of waiting for a few more years just like INCO waited for Brian Tobin to get bored.
In the meantime, Martin and Williams will try and build PetroNewf into something that will either compete with local private enterprise or, more likely, just muscle local companies into a subordinate position in the oil patch.
(Left) TengizChevroil logo
For anyone who thinks that Hebron is a big play for Chevron and the other partners, think of this. Since the late 1990s, Chevron has been heavily involved in developing oil reserves in the former Soviet Union. In 2001, they opened a new pipeline to take gas from the Caspian Sea to market. The Tengiz field, for example contains an estimated six to nine billion barrels of oil.
Compare that to the 700 hundred million in Hebron, most of which is heavy oil that is costly to produce especially in the harsh North Atlantic environment.
The afternoon sessions on potential gas development promise to be more interesting, especially in light of the Premier's comments to The Telegram about not wanting to see gas stuffed into a "God damn boat" and floated down the coast, presumably to markets where people could actually buy the gas.
The Premier's comments are odd, since there is a very small potential market, if any at all, for natural gas within the province.
In 1998 and 2001, NOIA conducted a two-part study into potential gas development. You can find Phase One report, or scoping study, here and the Phase Two report, which examined critical issues, here.
The market analysis carried out in 2001 by ICT Consulting predicted continued strong growth in American natural gas markets and that has held true. Likewise, the assessment that there is a limited local market for these products has also remained true.
(Right) One of the Premier's despised "God damn" but locally-owned compressed natural gas ships could earn the province millions in added revenue through the private sector.
Technological changes, including exploration of new shipping technologies with local business ties, open up new ways of exploiting the estimated eight trillion cubic feet of natural gas offshore Newfoundland and Labrador.
Given that these studies are about five to eight years old, it might be timely to have another look at the potential to develop gas reserves. Changes in price, for example may make it more attractive to begin development of something less than the total available reserves, with production commencing around 2010 or slightly afterward. The one thing that isn't likely to change is the small local demand for natural gas.
No doubt people have been buying up luncheon tickets to hear PetroNewf chief executive officer Ed Martin explain how a Crown corporation with absolutely no experience in oil and gas is somehow going to muscle its way into the oil and gas business.
The real value of this conference is the working sessions [see agenda] and anyone with tickets is going to get a real earful of solid information.
The morning sessions focus on heavy oil and the Hebron project. It promises to be a heavily technical discussion.
The provincial government and the companies are still trying to figure out a benefits deal, so the project is not ready for sanction, that is, it isn't ready to go to the offshore board for approval. Premier Williams appears to be trying to saddle Hebron with a host of "local benefits" that aren't needed to bring the field on stream, which will drive up the cost of development and in the process might well reduce the revenue stream to the provincial government - much like the Peckford-era Hibernia deal.
At some point - maybe in four years time when Danny Williams is out of office - the companies can cut a deal with the provincial government and the project will finally start. Major international companies like Chevron make long-range plans, and as the Kazakhstan projects demonstrate, they are quite prepared to work diligently over a long period of time for the right moment to develop the right oil field. Having spent 20 years waiting to bring Hebron on stream, the consortium can hardly be deterred by the prospect of waiting for a few more years just like INCO waited for Brian Tobin to get bored.
In the meantime, Martin and Williams will try and build PetroNewf into something that will either compete with local private enterprise or, more likely, just muscle local companies into a subordinate position in the oil patch.
(Left) TengizChevroil logoFor anyone who thinks that Hebron is a big play for Chevron and the other partners, think of this. Since the late 1990s, Chevron has been heavily involved in developing oil reserves in the former Soviet Union. In 2001, they opened a new pipeline to take gas from the Caspian Sea to market. The Tengiz field, for example contains an estimated six to nine billion barrels of oil.
Compare that to the 700 hundred million in Hebron, most of which is heavy oil that is costly to produce especially in the harsh North Atlantic environment.
The afternoon sessions on potential gas development promise to be more interesting, especially in light of the Premier's comments to The Telegram about not wanting to see gas stuffed into a "God damn boat" and floated down the coast, presumably to markets where people could actually buy the gas.
The Premier's comments are odd, since there is a very small potential market, if any at all, for natural gas within the province.
In 1998 and 2001, NOIA conducted a two-part study into potential gas development. You can find Phase One report, or scoping study, here and the Phase Two report, which examined critical issues, here.
The market analysis carried out in 2001 by ICT Consulting predicted continued strong growth in American natural gas markets and that has held true. Likewise, the assessment that there is a limited local market for these products has also remained true.
(Right) One of the Premier's despised "God damn" but locally-owned compressed natural gas ships could earn the province millions in added revenue through the private sector.Technological changes, including exploration of new shipping technologies with local business ties, open up new ways of exploiting the estimated eight trillion cubic feet of natural gas offshore Newfoundland and Labrador.
Given that these studies are about five to eight years old, it might be timely to have another look at the potential to develop gas reserves. Changes in price, for example may make it more attractive to begin development of something less than the total available reserves, with production commencing around 2010 or slightly afterward. The one thing that isn't likely to change is the small local demand for natural gas.
20 October 2005
Lucid Lucien
While the story got some coverage, Lucien Bouchard's news conference the other day didn't get quite enough.
So here is a link to the English version of the manifesto he released on behalf of a group of Quebec intellectuals on the challenges faced by Quebec in the coming decades and some possible solutions.
The French name of the document, pour un Quebec lucide, seems much more compelling than the English version: For a clear-eyed vision of Quebec.
I'd agree with Paul Wells on the most striking statement in the document, albeit for different reasons. Irrespective of Wells' point, I just thought the comment equally applicable to Newfoundland and Labrador in the past 18 months; just change the provincial origin of the "consensus".
I'll give you the Wellsian translation of the original French:
"The first condition of liberty is the ability to question the status quo without being hauled before the inquisition tribunal of the Quebec consensus."
On that note, stand by for some further comment on this manifesto in the days ahead.
Orrin Hatch - honorary hoser
Check out this post, in which United States Senator Orrin Hatch (Republican, Utah) claims that Canada will surpass Saudi Arabia as the world's largest oil storehouse.
Then check the text of Hatch's speech, from his senatorial website and find out exactly what he actually said:
"We should take note that our major oil companies, including Chevron and ExxonMobil, are beginning to state publicly that we may be reaching peak oil. And with the economic growth in India and Asia and other regions, it looks like weÂ’ll have high oil prices into the foreseeable future.
This is a new scenario for the world, and it forces us to shift our focus to our unconventional resources. Shell Oil Company has, for years, been preparing for such a shift. Its successful activities in Alberta with oil sands and their investment in new technologies to produce oil from oil shale are a testimony to ShellÂ’s recognition that unconventional oil is in our future.
Those who doubt that unconventional fuels are economically viable probably are suffering from a neck ailment that keeps them from looking north.
The 800-pound gorilla is sitting just above Montana, and let'’s face it, it'’s hard to miss.
Alberta is now second only to Saudi Arabia in proven oil reserves and ninth in the world in annual oil production. This is owing mostly to their successful development of oil sands. In Alberta, you have dozens of major oil companies, using a variety of technologies and recovery methods, going after very different types of oil sands resources, and in almost every case doing so for less than $20 a barrel, including during their very tough winters. It is a gigantic success story, and it began with Alberta'’s government deciding to promote the development of this resource and not giving up.
Anyone watching what is happening up north will recognize that, before long, Canada will inevitably overtake Saudi Arabia as the world'’s oil giant. And Alberta clearly has its sights on increased annual production to match its growing reserve. Already at about a million barrels a day, Alberta'’s production is expected to double in the next five or six years."
Notice that the gentlemen Senator did not mention offshore eastern Canada in the speech.
Maybe he has just been lobbied hard about Alberta. Maybe Hatch just knows about Alberta because his own state also has large oil sands reserves.
It is still interesting to see Canada noticed in this way by an influential senator.
Then check the text of Hatch's speech, from his senatorial website and find out exactly what he actually said:
"We should take note that our major oil companies, including Chevron and ExxonMobil, are beginning to state publicly that we may be reaching peak oil. And with the economic growth in India and Asia and other regions, it looks like weÂ’ll have high oil prices into the foreseeable future.
This is a new scenario for the world, and it forces us to shift our focus to our unconventional resources. Shell Oil Company has, for years, been preparing for such a shift. Its successful activities in Alberta with oil sands and their investment in new technologies to produce oil from oil shale are a testimony to ShellÂ’s recognition that unconventional oil is in our future.
Those who doubt that unconventional fuels are economically viable probably are suffering from a neck ailment that keeps them from looking north.
The 800-pound gorilla is sitting just above Montana, and let'’s face it, it'’s hard to miss.
Alberta is now second only to Saudi Arabia in proven oil reserves and ninth in the world in annual oil production. This is owing mostly to their successful development of oil sands. In Alberta, you have dozens of major oil companies, using a variety of technologies and recovery methods, going after very different types of oil sands resources, and in almost every case doing so for less than $20 a barrel, including during their very tough winters. It is a gigantic success story, and it began with Alberta'’s government deciding to promote the development of this resource and not giving up.
Anyone watching what is happening up north will recognize that, before long, Canada will inevitably overtake Saudi Arabia as the world'’s oil giant. And Alberta clearly has its sights on increased annual production to match its growing reserve. Already at about a million barrels a day, Alberta'’s production is expected to double in the next five or six years."
Notice that the gentlemen Senator did not mention offshore eastern Canada in the speech.
Maybe he has just been lobbied hard about Alberta. Maybe Hatch just knows about Alberta because his own state also has large oil sands reserves.
It is still interesting to see Canada noticed in this way by an influential senator.
The Williams oil and gas corporation - institutionalising dependence
When Danny Williams released his Blue Book, it appeared to contain a contradiction. Thanks to Rob Antle's story in yesterday's Telegram, the contradiction is now more apparent.
The first chapter of the Blue Book copied almost word for word the Wells' administration Strategic Economic Plan (SEP). The SEP aimed to correct two fundamental weaknesses in the Newfoundland and Labrador economy, namely excessive dependence on a handful of major resource industries on the one hand and a shortage of local, accessible capital to support economic activity. Since Confederation, the latter weakness had been addressed by federal transfer payments which had resulted in another form of dependence.
In some respects, these twin dependencies were historic issues. The pre-Confederation economy depended on the fishery, forestry and mining with the former being prominent. Local manufacturing was dependent as well, although before 1949, it relied on protectionist tariffs to keep Canadian manufactured goods out. Such was its level of dependence that within three months of Confederation, most of those manufacturing enterprises collapsed in the face of more robust and efficient business elsewhere.
The SEP identified entrepreneurship - the growth and development of the private sector - as the mechanism by which the Newfoundland and Labrador economy could be strengthened and the twin dependencies eliminated.
By contrast, the second chapter of William's Blue Book dusted off industrial development policies from the 1970s and 1980s with its focus on oil and gas as the means of generating cash for the provincial government. The Peckford administration viewed oil and gas as the sole means of financial salvation for both the Newfoundland government and for its society.
Peckford passed legislation to create the Petroleum Corporation of Newfoundland and Labrador, with its legislated 40% share of each offshore development. Coupled with that, the legislation mandated that companies involved in the local offshore would be local companies. Through these legislated requirements the province would develop an oil industry that would ensure, in the words of both Peckford then and Williams now, that maximum benefits would flow locally from local resources.
The fundamental contradiction between these two approaches is that while the SEP is based on private sector entrepreneurship and increasing international trade for local products, the Peckford and now Williams approach is focused on state ownership of industry and on local markets.
A genuine contradiction would exist if the Blue Book embraced the philosophies underpinning the Wells and Peckford approaches. It does not. Rather, Williams appears to be focused on control as an end in and of itself. For example, take this phrase dealing with prospective hydro development: "I'’d like to see us own the lion'’s share of the Lower Churchill...". The provincial government already owns the "lion's share" and can claim rents from electricity as a matter of owning it.
What Williams is talking about here is owning and controlling the company which generates the electricity.
Consider as well, the rest of that section of Antle's story: natural gas should be brought ashore in Newfoundland and Labrador by pipeline so that "we have control of the pipeline so that it'’s not being compressed or liquefied and going in a God damn boat and going on down the coast somewhere."
In the absence of any demand for natural gas within the province or any demonstrable advantage to converting the province to gas, an entrepreneurial approach would support selling it to someone who wants it. Better to ship it to the United States in whatever way produces the best price than to spend money bringing it to a place that has no use for it. Revenue from that sale can support public services like health care. Privately owned local companies can own the ships that move the gas to market. Expertise in gas production and shipping, potentially using new technology, can give the local private sector a competitive advantage such that it can gain even more business around the globe than can be obtained purely within Newfoundland and Labrador.
A government dedicated to developing the private sector would create a climate in which local companies can exploit local resources thereby generating wealth. Government's share of that wealth through economic rents and other taxation would give sufficient revenue to deliver government programs and services.
In the Williams approach, the state - the provincial government - is merely a corporate entity with all the tools necessary to achieve local, i.e. provincial government, control.
The struggle for the Williams government is the struggle for control. He acknowledges that his supposed opponents are larger than government: "if you go up against Hydro Quebec, if you go up against Inco, if you go up against ExxonMobil, they'’re a lot bigger than our government is. That'’s the grim reality of all of this." His next comments identify the solution - build the hydro corporation such that it can "take on" the biggest out there.
The result of the Williams approach is difficult to predict. Certainly, in the short run, he may achieve considerable political success. He may be able to turn the energy corporation into a Mother Hen that will wrest a portion of economic developments for itself and then distribute these among local companies. The resulting jobs may carry with them votes.
In the medium- to long- term, though, the Williams approach cannot address the chronic, historic problems in the local economy. Over the past 25 years, Western economies have disposed of state-owned enterprises since they are notoriously unable to produce wealth as effectively and efficiently as the private sector. The ones that survive, such as Quebec's hydro corporation may be models for the Premier, but they are models from the past. They are models which are limited to very specific and primarily local activities. In short, they are expensive and ultimately wasteful of what in Newfoundland and Labrador are scarce cash resources.
The Williams Mother Hen approach - if that indeed is what emerges - will simply promote
dependence of local companies on state subsidies, either directly or indirectly.
The Premier's plan may not succeed simply because the hydro corporation is actually not the entity Premier Williams describes. Newfoundland and Labrador Hydro remains a government department in all but name and is almost the antithesis of a private sector corporation in which the board of directors would have the authority to run the company and set its own lines of business.
On the face of it this is obvious: the impetus to change hydro to an energy corporation did not come from its own board, complete with a business plan. It is entirely the plan of this particular administration. The board will not resist. The Premier alone holds the de facto power to appoint or remove directors and he has shown repeatedly his willingness to replace dissenters with his own personal retinue.
As such, the new energy corporation will likely be quickly recognized as an anomaly in the developed world and surely one which violates the Organization of Economic Co-operation and Development's guidelines for the governance of state-owned enterprises. Even if one leaves aside for the moment the nagging and very serious question of how the new energy corporation will find the cash to support the Premier's ambitions, one can readily see how companies such as Chevron may be very reluctant to enter into any arrangements that would see its long awaited return on investment siphoned off into a provincially owned company with no experience in oil and gas and no capital at risk. These companies are not Fishery Products International.
International companies may well become increasingly reluctant to invest in this province as the Williams' approach becomes better understood. International capital seeks stability and predictability as well as a fair and transparent regulatory regime. In the case of the offshore, it appears from the Premier's interview yesterday and his previous comments on the offshore board that he intends to change the rules as he sees fit, when he sees fit.
Premier Williams may succeed in creating some measure of the control that he finds satisfying personally. On another level, however, all he may succeed in doing is ensuring the chronic problems in the Newfoundland and Labrador economy continue into the future, at best unaltered and at worst supported by the very mechanisms of control which he is seeking.
In reforming the hydro corporation, he may well be using the elements of plans laid by previous administrations to cement in place the very circumstance they sought to change.
The first chapter of the Blue Book copied almost word for word the Wells' administration Strategic Economic Plan (SEP). The SEP aimed to correct two fundamental weaknesses in the Newfoundland and Labrador economy, namely excessive dependence on a handful of major resource industries on the one hand and a shortage of local, accessible capital to support economic activity. Since Confederation, the latter weakness had been addressed by federal transfer payments which had resulted in another form of dependence.
In some respects, these twin dependencies were historic issues. The pre-Confederation economy depended on the fishery, forestry and mining with the former being prominent. Local manufacturing was dependent as well, although before 1949, it relied on protectionist tariffs to keep Canadian manufactured goods out. Such was its level of dependence that within three months of Confederation, most of those manufacturing enterprises collapsed in the face of more robust and efficient business elsewhere.
The SEP identified entrepreneurship - the growth and development of the private sector - as the mechanism by which the Newfoundland and Labrador economy could be strengthened and the twin dependencies eliminated.
By contrast, the second chapter of William's Blue Book dusted off industrial development policies from the 1970s and 1980s with its focus on oil and gas as the means of generating cash for the provincial government. The Peckford administration viewed oil and gas as the sole means of financial salvation for both the Newfoundland government and for its society.
Peckford passed legislation to create the Petroleum Corporation of Newfoundland and Labrador, with its legislated 40% share of each offshore development. Coupled with that, the legislation mandated that companies involved in the local offshore would be local companies. Through these legislated requirements the province would develop an oil industry that would ensure, in the words of both Peckford then and Williams now, that maximum benefits would flow locally from local resources.
The fundamental contradiction between these two approaches is that while the SEP is based on private sector entrepreneurship and increasing international trade for local products, the Peckford and now Williams approach is focused on state ownership of industry and on local markets.
A genuine contradiction would exist if the Blue Book embraced the philosophies underpinning the Wells and Peckford approaches. It does not. Rather, Williams appears to be focused on control as an end in and of itself. For example, take this phrase dealing with prospective hydro development: "I'’d like to see us own the lion'’s share of the Lower Churchill...". The provincial government already owns the "lion's share" and can claim rents from electricity as a matter of owning it.
What Williams is talking about here is owning and controlling the company which generates the electricity.
Consider as well, the rest of that section of Antle's story: natural gas should be brought ashore in Newfoundland and Labrador by pipeline so that "we have control of the pipeline so that it'’s not being compressed or liquefied and going in a God damn boat and going on down the coast somewhere."
In the absence of any demand for natural gas within the province or any demonstrable advantage to converting the province to gas, an entrepreneurial approach would support selling it to someone who wants it. Better to ship it to the United States in whatever way produces the best price than to spend money bringing it to a place that has no use for it. Revenue from that sale can support public services like health care. Privately owned local companies can own the ships that move the gas to market. Expertise in gas production and shipping, potentially using new technology, can give the local private sector a competitive advantage such that it can gain even more business around the globe than can be obtained purely within Newfoundland and Labrador.
A government dedicated to developing the private sector would create a climate in which local companies can exploit local resources thereby generating wealth. Government's share of that wealth through economic rents and other taxation would give sufficient revenue to deliver government programs and services.
In the Williams approach, the state - the provincial government - is merely a corporate entity with all the tools necessary to achieve local, i.e. provincial government, control.
The struggle for the Williams government is the struggle for control. He acknowledges that his supposed opponents are larger than government: "if you go up against Hydro Quebec, if you go up against Inco, if you go up against ExxonMobil, they'’re a lot bigger than our government is. That'’s the grim reality of all of this." His next comments identify the solution - build the hydro corporation such that it can "take on" the biggest out there.
The result of the Williams approach is difficult to predict. Certainly, in the short run, he may achieve considerable political success. He may be able to turn the energy corporation into a Mother Hen that will wrest a portion of economic developments for itself and then distribute these among local companies. The resulting jobs may carry with them votes.
In the medium- to long- term, though, the Williams approach cannot address the chronic, historic problems in the local economy. Over the past 25 years, Western economies have disposed of state-owned enterprises since they are notoriously unable to produce wealth as effectively and efficiently as the private sector. The ones that survive, such as Quebec's hydro corporation may be models for the Premier, but they are models from the past. They are models which are limited to very specific and primarily local activities. In short, they are expensive and ultimately wasteful of what in Newfoundland and Labrador are scarce cash resources.
The Williams Mother Hen approach - if that indeed is what emerges - will simply promote
dependence of local companies on state subsidies, either directly or indirectly.
The Premier's plan may not succeed simply because the hydro corporation is actually not the entity Premier Williams describes. Newfoundland and Labrador Hydro remains a government department in all but name and is almost the antithesis of a private sector corporation in which the board of directors would have the authority to run the company and set its own lines of business.
On the face of it this is obvious: the impetus to change hydro to an energy corporation did not come from its own board, complete with a business plan. It is entirely the plan of this particular administration. The board will not resist. The Premier alone holds the de facto power to appoint or remove directors and he has shown repeatedly his willingness to replace dissenters with his own personal retinue.
As such, the new energy corporation will likely be quickly recognized as an anomaly in the developed world and surely one which violates the Organization of Economic Co-operation and Development's guidelines for the governance of state-owned enterprises. Even if one leaves aside for the moment the nagging and very serious question of how the new energy corporation will find the cash to support the Premier's ambitions, one can readily see how companies such as Chevron may be very reluctant to enter into any arrangements that would see its long awaited return on investment siphoned off into a provincially owned company with no experience in oil and gas and no capital at risk. These companies are not Fishery Products International.
International companies may well become increasingly reluctant to invest in this province as the Williams' approach becomes better understood. International capital seeks stability and predictability as well as a fair and transparent regulatory regime. In the case of the offshore, it appears from the Premier's interview yesterday and his previous comments on the offshore board that he intends to change the rules as he sees fit, when he sees fit.
Premier Williams may succeed in creating some measure of the control that he finds satisfying personally. On another level, however, all he may succeed in doing is ensuring the chronic problems in the Newfoundland and Labrador economy continue into the future, at best unaltered and at worst supported by the very mechanisms of control which he is seeking.
In reforming the hydro corporation, he may well be using the elements of plans laid by previous administrations to cement in place the very circumstance they sought to change.
19 October 2005
Steele chairs offshore board selection panel
Harry Steele, chairman of the board of Newfoundland Capital Corporation, will chair the three member panel to select a new chair and chief executive officer of the Canada-Newfoundland and Labrador Offshore Petroleum Board (CNLOPB). Here's the VOCM story.
Steele's appointment means the panel can get down to work and finish the job started last year by a team chaired by Robertson Surette, the national executive search firm.
It also likely means that there is little chance Andy Wells will survive to take the job, much as pointed here back in July when Andy leaked the story to local media. Wells is demonstrably not qualified for the job. Steele didn't make millions over the years by putting unqualified people into jobs.
Steele's appointment means the panel can get down to work and finish the job started last year by a team chaired by Robertson Surette, the national executive search firm.
It also likely means that there is little chance Andy Wells will survive to take the job, much as pointed here back in July when Andy leaked the story to local media. Wells is demonstrably not qualified for the job. Steele didn't make millions over the years by putting unqualified people into jobs.
Herbicide Orange in Newfoundland and Labrador - updated
Update: Here's the CBC television story on Agent Orange, complete with pictures. (Note - needs RealPlayer)
It took a while to make it on the air, but this October 13 news release from Liberal Opposition environment critic Percy Barrett calls on the provincial government to investigate possible use in Newfoundland and Labrador of Herbicide Orange, commonly called Agent Orange.
There are several possible sites where the herbicide could have been used in the 1950s and 1960s, including the American bases at Stephenville, Pleasantville (St. John's), Argentia and Goose Bay and Canadian military sites at Torbay, Gander and Red Cliff, near St. John's, as well as other Pine Tree radar sites.
There were also some gap-filler radar sites in other parts of the province.
(Left) Aerial photograph of ruins of Red Cliff Pine Tree Site, near St. John's, May 2005
Perhaps the best known use of the herbicide is Operation Ranch Hand, a series of sprays during the Vietnam War designed to reduce jungle coverage used by North Vietnamese and Viet Cong troops as cover.
Recent news stories indicate that Herbicide Orange was also used at Canadian military bases, like Camp Gagetown in New Brunswick. This website is related to claims by veterans and civilians that exposure to Herbicide Orange made them sick.
Provincial environment minister Tom Osborne is dismissing Barrett's claims as fear-mongering. Nonetheless he has written to several civilian companies inquiring about their possible use of Herbicide Orange.
Unfortunately for Mr. Osborne, Herbicide Orange was developed exclusively for military use. It was never sold to civilian companies or non-military government agencies.
Orange was a combination of two other herbicides: 2,4-D and 2,4,5-T. Those plant-killing chemicals may have been sold separately under different names, just as they were before they were combined as Orange.
They are still available for commercial (i.e. public) use across Canada.
(Right) Accompanied by a T-28 Trojan, a United States Air Force C-123B Provider returns to base from a spray mission as part of Operation Ranch Hand, somewhere over South Vietnam.
It took a while to make it on the air, but this October 13 news release from Liberal Opposition environment critic Percy Barrett calls on the provincial government to investigate possible use in Newfoundland and Labrador of Herbicide Orange, commonly called Agent Orange.
There are several possible sites where the herbicide could have been used in the 1950s and 1960s, including the American bases at Stephenville, Pleasantville (St. John's), Argentia and Goose Bay and Canadian military sites at Torbay, Gander and Red Cliff, near St. John's, as well as other Pine Tree radar sites.
There were also some gap-filler radar sites in other parts of the province.
(Left) Aerial photograph of ruins of Red Cliff Pine Tree Site, near St. John's, May 2005Perhaps the best known use of the herbicide is Operation Ranch Hand, a series of sprays during the Vietnam War designed to reduce jungle coverage used by North Vietnamese and Viet Cong troops as cover.
Recent news stories indicate that Herbicide Orange was also used at Canadian military bases, like Camp Gagetown in New Brunswick. This website is related to claims by veterans and civilians that exposure to Herbicide Orange made them sick.
Provincial environment minister Tom Osborne is dismissing Barrett's claims as fear-mongering. Nonetheless he has written to several civilian companies inquiring about their possible use of Herbicide Orange.
Unfortunately for Mr. Osborne, Herbicide Orange was developed exclusively for military use. It was never sold to civilian companies or non-military government agencies.
Orange was a combination of two other herbicides: 2,4-D and 2,4,5-T. Those plant-killing chemicals may have been sold separately under different names, just as they were before they were combined as Orange.
They are still available for commercial (i.e. public) use across Canada.
(Right) Accompanied by a T-28 Trojan, a United States Air Force C-123B Provider returns to base from a spray mission as part of Operation Ranch Hand, somewhere over South Vietnam.
A modest proposal - updated
[Left] Her Majesty's Penitentiary, St. John's
Viewed from The Boulevard, looking south
Amid some calls today for the provincial government to replace Her Majesty's Penitentiary (HMP) in St. John's, the following thought crossed my mind.
Erected in the 1850s, HMP is one of the oldest buildings in the province and remains the largest provincially owned jail. The original section is long past due for replacement since it is too cramped, cold and damp for use as a modern correctional facility. It was renovated in 1945, 1981 and 1994 but the site is not really open for expansion of substantial alteration.
HMP was practically in the woods in 1850 when St. John's barely spread up from the harbour as far as Military Road. Today, HMP is smack in the middle of one of the tonier neighbourhoods. It is run-down and the exterior is poorly maintained.
[Left] HMP, from Forest Road looking northSo here's the thought.
Rather than renovate Colonial Building so that it can house a handful of heritage not-for-profit groups, why not turn the Colonial Building into either the legislature (again) or into an adjunct of the legislature.
In the meantime, build a new prison somewhere. I am thinking Stephenville can use the boost to the local economy. Once the old HMP is closed, tear down some of the newer bits and restore the 1859 building as an historic site. Between the office buildings associated with the prison and some of the other buildings (not the cells), there is plenty of space for even more non-government groups than the eight or so that will get to live in the Colonial Building free of charge. You and I may well be subjected to a fee to get into the building.
Here's the CBC story on the HMP issue.
Sensitive Connie
Thanks for the free link, Liam O'Brien.
Note to Liam -
1. Relax: Everyone knows you are a Connie. You don't have to keep struggling so damned hard to remind people all the time.
2. In most political parties, it's ok to be a little upset with either party officials or cabinet ministers. You were a tad miffed and everyone is grown-up enough to understand you loved the convention and had a great time and were just a little breathless in your praise. The lengthy explanation changed the tone of your own original post.
3. Odd you didn't notice the rest of my post which complained about the lack of information about the convention on the provincial party website.
4. Odd too that you didn't notice the other post on Danny Williams' speech and leadership style. Maybe there's another post coming. Maybe, just maybe, your silence on this point suggests you agree with me that Danny Williams' leadership style is pretty closed to discussion.
5. The spin thing is as tired as the "no comments" thing. And as I noted in your comments section it is a bit silly to accuse someone else of spin - lies, bullshit - and then turn around and accuse the feds of bigotry, a truly offensive word, without any provocation or cause.
Note to Liam -
1. Relax: Everyone knows you are a Connie. You don't have to keep struggling so damned hard to remind people all the time.
2. In most political parties, it's ok to be a little upset with either party officials or cabinet ministers. You were a tad miffed and everyone is grown-up enough to understand you loved the convention and had a great time and were just a little breathless in your praise. The lengthy explanation changed the tone of your own original post.
3. Odd you didn't notice the rest of my post which complained about the lack of information about the convention on the provincial party website.
4. Odd too that you didn't notice the other post on Danny Williams' speech and leadership style. Maybe there's another post coming. Maybe, just maybe, your silence on this point suggests you agree with me that Danny Williams' leadership style is pretty closed to discussion.
5. The spin thing is as tired as the "no comments" thing. And as I noted in your comments section it is a bit silly to accuse someone else of spin - lies, bullshit - and then turn around and accuse the feds of bigotry, a truly offensive word, without any provocation or cause.
18 October 2005
The strangest things Google (tm) can find
In searching quickly for a picture of the Pen here in St. John's, I got this hit back from google(tm).
It is a paper by eminent historian Peter Neary on venereal disease and the administration of public health under the Commission of Government [1930s and 1940s].
Fair warning: There are some grim descriptions of disease in this paper, including one of a child admitted to St. Clare's Hospital but subsequently treated successfully with then-new penicillin.
Other than that it is a fascinating glimpse into the relatively recent past.
It is a paper by eminent historian Peter Neary on venereal disease and the administration of public health under the Commission of Government [1930s and 1940s].
Fair warning: There are some grim descriptions of disease in this paper, including one of a child admitted to St. Clare's Hospital but subsequently treated successfully with then-new penicillin.
Other than that it is a fascinating glimpse into the relatively recent past.
Where are the results?
Further to the weekend Progressive Conservative Party convention, can anyone explain why the official party website contains only a thank you to everyone who turned out?
The site, which is little more than a reposting of government news releases, has absolutely no information on the convention.
There's no agenda, no list of resolutions, not even a note telling you what to show up to worship Stephen Harper.
Nada.
Zip.
Bupkis.
How odd.
Then again, if all everyone is expected to do is merely fall in line behind The Leader, then there isn't much need for us to bother our pretty little heads with nasty old details and such.
Over at Responsible Government League, aka Really Groovy Lundrigan, Liam is rotted at not being able to get a floor resolution debated and for finding out that Trevor Taylor doesn't really support joint management of the fisheries as does Mr. O'Brien.
Liam also waxes nostalgic for John Lundrigan. That's a bit like a Grit getting all misty-eyed about Dave Rooney, the former Liberal member of parliament for Bonavista-Trinity-Conception.
Dave's lasting contribution to parliamentary lore was submitting stuff to National Lampoon [The Real One]. One that I recall was a Telegram piece on the local exotic dance industry with the actual headline "Stripper bares all". The other was a highway sign pointing to Heart's Content in one direction and Dildo in the other.
The site, which is little more than a reposting of government news releases, has absolutely no information on the convention.
There's no agenda, no list of resolutions, not even a note telling you what to show up to worship Stephen Harper.
Nada.
Zip.
Bupkis.
How odd.
Then again, if all everyone is expected to do is merely fall in line behind The Leader, then there isn't much need for us to bother our pretty little heads with nasty old details and such.
Over at Responsible Government League, aka Really Groovy Lundrigan, Liam is rotted at not being able to get a floor resolution debated and for finding out that Trevor Taylor doesn't really support joint management of the fisheries as does Mr. O'Brien.
Liam also waxes nostalgic for John Lundrigan. That's a bit like a Grit getting all misty-eyed about Dave Rooney, the former Liberal member of parliament for Bonavista-Trinity-Conception.
Dave's lasting contribution to parliamentary lore was submitting stuff to National Lampoon [The Real One]. One that I recall was a Telegram piece on the local exotic dance industry with the actual headline "Stripper bares all". The other was a highway sign pointing to Heart's Content in one direction and Dildo in the other.
17 October 2005
The I in t-e-a-m.
In both his speech to the provincial Tory convention this weekend and in his guest editorial in The Independent, Danny Williams gave us a succinct and eloquent description of his approach to politics.
His job is to provide leadership, tough but smart leadership in the the words of his Spindy editorial.
Everyone else's job is to stand shoulder to shoulder behind him.
It's a pretty simple leadership style.
There's is no room for debate or discussion, at least not on matters of substance.
That philosophy goes a long way to explaining why he labeled some of his critics in Stephenville as dissidents simply because they didn't readily accept either his explanation or his actions. The Premier didn't mean the term as a compliment or a simple statement of fact; he meant that they were out of position and would be well advised to get back in line behind him.
It also explains why he keeps going back to the offshore discussions. His own failure to achieve even one tenth of what he promised is irrelevant. The episode has been sold as a success and the value of the entire wrangle with Ottawa is, as he notes in the speech, what happens when everyone stands behind him.
More than anything else, the Danny Williams definition of team also explains his problems with a number of people who, in fact just are coincidentally women. The major problem for Elizabeth Marshall, Flo Delaney, Anne Marie Hann and Debbie Fry wasn't that they were strong women. Nope. The problem was they did not agree with him readily.
Ask Fabian Manning about that sort of thing. While a number of political observers expected last weekend's convention to be the place where Fabian would be accepted back into the Tory fold, they saw instead that Manning is still being punished for disagreeing with the Premier on fisheries issues. Ironically though, Fabe got more media coverage on himself - and the fact he has been Tory since before Danny was a twinkle in someone's eye - than the Premier got.
In some respects, Danny Williams is a common type in post-Confederation politics in Newfoundland and Labrador. Smallwood was a local caudillo or strongman. He ruled everything in the province for 23 years. Brian Peckford copied many of Smallwood's approaches to governing, as did Brian Tobin.
The next couple of years will be interesting to see which of those three politicians Williams resembles the most.
His job is to provide leadership, tough but smart leadership in the the words of his Spindy editorial.
Everyone else's job is to stand shoulder to shoulder behind him.
It's a pretty simple leadership style.
There's is no room for debate or discussion, at least not on matters of substance.
That philosophy goes a long way to explaining why he labeled some of his critics in Stephenville as dissidents simply because they didn't readily accept either his explanation or his actions. The Premier didn't mean the term as a compliment or a simple statement of fact; he meant that they were out of position and would be well advised to get back in line behind him.
It also explains why he keeps going back to the offshore discussions. His own failure to achieve even one tenth of what he promised is irrelevant. The episode has been sold as a success and the value of the entire wrangle with Ottawa is, as he notes in the speech, what happens when everyone stands behind him.
More than anything else, the Danny Williams definition of team also explains his problems with a number of people who, in fact just are coincidentally women. The major problem for Elizabeth Marshall, Flo Delaney, Anne Marie Hann and Debbie Fry wasn't that they were strong women. Nope. The problem was they did not agree with him readily.
Ask Fabian Manning about that sort of thing. While a number of political observers expected last weekend's convention to be the place where Fabian would be accepted back into the Tory fold, they saw instead that Manning is still being punished for disagreeing with the Premier on fisheries issues. Ironically though, Fabe got more media coverage on himself - and the fact he has been Tory since before Danny was a twinkle in someone's eye - than the Premier got.
In some respects, Danny Williams is a common type in post-Confederation politics in Newfoundland and Labrador. Smallwood was a local caudillo or strongman. He ruled everything in the province for 23 years. Brian Peckford copied many of Smallwood's approaches to governing, as did Brian Tobin.
The next couple of years will be interesting to see which of those three politicians Williams resembles the most.
Coming soon to NTV?
I noticed it.
One regular reader of these e-scribbles came to the same conclusion and flipped an e-mail over the weekend to point it out.
Head to the Viral Factory website.
Click on work and make sure the "Ravenstoke" clip loads. It's a piece of viral marketing in the style of a news report.
Notice the "reporter", whose name is given in the piece as "Chuck Peterson".
My guess is the guy playing Chuck is actually Glenn Carter, NTV's new reporter/anchor.
The son of former provincial cabinet minister Walter Carter recently returned to the province from Alberta.
The question is, did Carter spend anytime in Alaska or in a part of Alberta that was pretending to be Alaska.
Incidentally the fake news report is hysterically funny, especially right at the end where "Chuck" keeps a straight face while in the background two Grizzlies get a little amorous.
One regular reader of these e-scribbles came to the same conclusion and flipped an e-mail over the weekend to point it out.
Head to the Viral Factory website.
Click on work and make sure the "Ravenstoke" clip loads. It's a piece of viral marketing in the style of a news report.
Notice the "reporter", whose name is given in the piece as "Chuck Peterson".
My guess is the guy playing Chuck is actually Glenn Carter, NTV's new reporter/anchor.
The son of former provincial cabinet minister Walter Carter recently returned to the province from Alberta.
The question is, did Carter spend anytime in Alaska or in a part of Alberta that was pretending to be Alaska.
Incidentally the fake news report is hysterically funny, especially right at the end where "Chuck" keeps a straight face while in the background two Grizzlies get a little amorous.
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