The Canada-Newfoundland and Labrador Offshore Board today released (click "what's new", once at the CNLOPB site) correspondence between the board and the provincial government on Hibernia South.
In total, the correspondence, including the formal reply to natural resources minister Kathy Dunderdale's letter of January 17, 2007, demolishes every contention by the provincial government on the proposal and on the board's actions.
Among the choice comments: "The Board's Decision [sic] actually goes a step further by requiring that the agreement [commercial agreement among the proponents] be approved by the royalty owner, i.e. the Province, before it will be acceptable to the Board."
That's right: there would have been no production unless and until the provincial government was satisfied on its financial issues.
So much for Dunderdale's spin that she rejected the decision merely to seek "more information".
01 February 2007
31 January 2007
March Madness starts early
Danny meets with European journalists to talk up the seal hunt.
Q. What do the following have in common?
Anna Nicole Smith
Loretta Swit
Pam Ferdin
Elizabeth Berkley
Danny Williams
A. All use the seal hunt to boost their careers.
Q. What do the following have in common?
Anna Nicole Smith
Loretta Swit
Pam Ferdin
Elizabeth Berkley
Danny Williams
A. All use the seal hunt to boost their careers.
A New Approach to roads maintenance
From the AG's report on government spending and operations:
In 1996, we concluded that the Department was not adequately managing the Province's road system. A decade later in 2006, we have come to the same conclusion.
A make-work slush fund in an unaccountable government?
From the AG's report on a make work program in the municipal affairs department:
Openness, accountability and transparency in an administration that brings a genuinely New Approach to government.
Pull the other one.
Because the Job Creation Program was funded through special warrants and intra-departmental transfers from other programs, there was no opportunity for the House of Assembly to debate and consider funding requirements for the Program. Furthermore, although officials indicated that funding allocation was made by electoral district, there was no documentation available to show how much was allocated to each district or the basis for the allocation.and then this:
There was no documentation in the files outlining the rationale for funding approvals.
Openness, accountability and transparency in an administration that brings a genuinely New Approach to government.
Pull the other one.
AG reports deficit and surplus at same time for same agency
Auditor General John Noseworthy released his comprehensive review of of provincial government spending and management today.
There is some new information about the House of Assembly scandal, including admission for the first time that Noseworthy's review started in January 2006. That's six months before the first public acknowledgement a review was underway. Bond Papers will have more on this in the days ahead, including some comment on Noseworthy's misunderstanding of the provincial constitution.
One curiosity in Noseworthy's summary booklet: in a section on educational spending, Noseworthy suddenly reports on deficits for health care boards:
This is no small discrepancy nor is it an easy cock-up to make. The names of the respective health care and educational authorities are different for one thing. Of course, the report is exceedingly lengthy at some 475 pages but there is a huge staff at the Auditor General's office including a new "information" manager.
There is some new information about the House of Assembly scandal, including admission for the first time that Noseworthy's review started in January 2006. That's six months before the first public acknowledgement a review was underway. Bond Papers will have more on this in the days ahead, including some comment on Noseworthy's misunderstanding of the provincial constitution.
One curiosity in Noseworthy's summary booklet: in a section on educational spending, Noseworthy suddenly reports on deficits for health care boards:
(c) Operating resultsThis produces an odd set of conclusions, since in the section on health authorities, the Labrador-Grenfell board goes from an operating surplus in the section quoted above to an unspecified deficit:
All 5 boards reported operating surpluses for the year ended 30 June 2006 totalling $5.1 million. Operating surpluses ranged from $349,000 for the Labrador-Grenfell Regional Integrated Health Authority to $2.3 million for the Eastern Regional Integrated Health Authority. Because of inconsistent reporting periods resulting from the restructuring of school boards in 2004, comparisons with prior years' financial results would not currently be meaningful. It will be next year before effective and meaningful comparisons can be performed.
During the year, all 4 boards reported operating deficits totalling $11.0 million. Operating deficits ranged from $400,000 for the Western Regional Integrated Health Authority to $5.6 million for the Eastern Regional Integrated Health Authority. One board, the Labrador-Grenfell Regional Integrated Health Authority, reported an annual operating deficit higher than that reported for the fiscal year 2005.Hmmmm.
This is no small discrepancy nor is it an easy cock-up to make. The names of the respective health care and educational authorities are different for one thing. Of course, the report is exceedingly lengthy at some 475 pages but there is a huge staff at the Auditor General's office including a new "information" manager.
Prems cancel meet fearing Equalization "bunfight"
The Council of the Federation meeting on February 7 will now take place via conference call instead of the face-to-face session originally planned.
The official reason is that there were scheduling problems. That doesn't hold water since Premiers were well aware of the meeting well in advance. Scheduling problems wouldn't be eased by a conference call, especially if the agenda was as extensive as previously claimed.
Initial media reports suggest the meeting was cancelled out of concern it would turn into a "bunfight" over Equalization.
In October 2004, Premier Danny Williams - the current chair of the Council of the Federation - stormed out of a meeting on Equalization, ostensibly to express his rejection of a federal proposal on offshore revenues. Other reports suggested the dramatic exit was to avoid - at least in part - criticism from other premiers of his approach.
The official reason is that there were scheduling problems. That doesn't hold water since Premiers were well aware of the meeting well in advance. Scheduling problems wouldn't be eased by a conference call, especially if the agenda was as extensive as previously claimed.
Initial media reports suggest the meeting was cancelled out of concern it would turn into a "bunfight" over Equalization.
In October 2004, Premier Danny Williams - the current chair of the Council of the Federation - stormed out of a meeting on Equalization, ostensibly to express his rejection of a federal proposal on offshore revenues. Other reports suggested the dramatic exit was to avoid - at least in part - criticism from other premiers of his approach.
30 January 2007
Hibernia spat led to better royalty regime
In 2000, the Government of Newfoundland and Labrador vetoed an increase in production rates at Hibernia but subsequently approved the hike based on a better royalty agreement with the operators.
Then-energy minister Paul Dicks delivered a statement on the decision to the House of Assembly on April 10, 2000. In the statement, Dicks said that "[i]f the production increase had been approved, more oil would have been taken from the field at a lower royalty rate. Over the life of the project, this would have negatively impacted royalties to the province."
The production rate increase had been approved by the Canada-Newfoundland and Labrador Offshore Petroleum Board based on an application by the Hibernia operators
One difference between the 2000 decision and recent rejection of the Hibernia South development application is the speed with which government acted. Dicks initiated discussions on the application as soon as the offshore board decision was forwarded to government in early March. No agreement was reached within the 30-day window for approval set under the Atlantic Accord (1985) implementation acts.
In the Hibernia South case, apparently, the provincial government did not initiate contact with the operators nor, apparently, did it raise concerns over incomplete information in the Hibernia application until after the project application was rejected.
The provincial government has still not indicated its goal for Hibernia South. Industry sources suggest the provincial government is seeking to treat the 300 million barrel development as a new project which would involve a new royalty and benefits agreement and a new production platform.
The operators reportedly wanted to bring Hibernia South onstream in 2008 and, as Petro-Canada chief executive Ron Brenneman put it, "step out into the more prolific and better return prospects" while boosting production rates back to 200,000 barrels a day, the rate established in 2004.
In the 2000 disagreement, talks continued beyond the 30 day mark and an agreement was reached that June. Under the new deal - a supplement to the original Hibernia agreement -
Another major difference between the 2000 and 2006 disputes involves project pay out or the point at which the provincial royalty rises to 30% per barrel. In 2000, the provincial government secured a revised royalty regime that allowed the project to pay out around 2011, according to some estimates. Dicks noted in his statements that under the original regime, pay out was unlikely.
In 2000, total reserves at Hibernia were estimated at 1.2 billion barrels, including oil already produced. By 2006, total reserves estimates had reached 1.9 billion, the bulk of which would remain to be produced after pay out.
Treating Hibernia South as a new project would likely restrict provincial royalties to a lesser amount for an indefinite period and might delay pay out on the entire project. A new production platform would not be needed to extract Hibernia South, except in response to a political demand.
____________________
NOTE 1: Bond Papers previously reported that the Hibernia South rejection was the first time a provincial government had overturned a fundamental decision by the offshore board. In fact, it appears to be the second, except for the differences noted above.
NOTE 2: In the ministerial statement, Paul Dicks said: "To date, government is not satisfied that the province is being kept whole." Aficionados will recognize "keep whole" or "kept whole" as a favourite phrase of the current Premier.
Then-energy minister Paul Dicks delivered a statement on the decision to the House of Assembly on April 10, 2000. In the statement, Dicks said that "[i]f the production increase had been approved, more oil would have been taken from the field at a lower royalty rate. Over the life of the project, this would have negatively impacted royalties to the province."
The production rate increase had been approved by the Canada-Newfoundland and Labrador Offshore Petroleum Board based on an application by the Hibernia operators
One difference between the 2000 decision and recent rejection of the Hibernia South development application is the speed with which government acted. Dicks initiated discussions on the application as soon as the offshore board decision was forwarded to government in early March. No agreement was reached within the 30-day window for approval set under the Atlantic Accord (1985) implementation acts.
In the Hibernia South case, apparently, the provincial government did not initiate contact with the operators nor, apparently, did it raise concerns over incomplete information in the Hibernia application until after the project application was rejected.
The provincial government has still not indicated its goal for Hibernia South. Industry sources suggest the provincial government is seeking to treat the 300 million barrel development as a new project which would involve a new royalty and benefits agreement and a new production platform.
The operators reportedly wanted to bring Hibernia South onstream in 2008 and, as Petro-Canada chief executive Ron Brenneman put it, "step out into the more prolific and better return prospects" while boosting production rates back to 200,000 barrels a day, the rate established in 2004.
In the 2000 disagreement, talks continued beyond the 30 day mark and an agreement was reached that June. Under the new deal - a supplement to the original Hibernia agreement -
"The royalty rate will increase above the current two per cent to three per cent earlier. It will then move to four per cent and five per cent after certain cumulative production levels have been reached. This will result in higher royalties than under the time based system,...This method of dealing with royalty rate increases is consistent with Terra Nova and the generic royalty regime in place for White Rose and future offshore projects."Dicks said the original Hibernia royalty agreement remained in place and would "act as a floor to ensure that if production declines, rate increases will occur in any event."
Another major difference between the 2000 and 2006 disputes involves project pay out or the point at which the provincial royalty rises to 30% per barrel. In 2000, the provincial government secured a revised royalty regime that allowed the project to pay out around 2011, according to some estimates. Dicks noted in his statements that under the original regime, pay out was unlikely.
In 2000, total reserves at Hibernia were estimated at 1.2 billion barrels, including oil already produced. By 2006, total reserves estimates had reached 1.9 billion, the bulk of which would remain to be produced after pay out.
Treating Hibernia South as a new project would likely restrict provincial royalties to a lesser amount for an indefinite period and might delay pay out on the entire project. A new production platform would not be needed to extract Hibernia South, except in response to a political demand.
____________________
NOTE 1: Bond Papers previously reported that the Hibernia South rejection was the first time a provincial government had overturned a fundamental decision by the offshore board. In fact, it appears to be the second, except for the differences noted above.
NOTE 2: In the ministerial statement, Paul Dicks said: "To date, government is not satisfied that the province is being kept whole." Aficionados will recognize "keep whole" or "kept whole" as a favourite phrase of the current Premier.
Cable companies expanding phone services nationally
In Newfoundland and Labrador, that means your tax dollars at work.
Fish processing worker background
Some quick references on the issue:
1. An analysis by the Atlantic Institute for Market Studies, 2002. An extract:
1. An analysis by the Atlantic Institute for Market Studies, 2002. An extract:
Newfoundland has almost 140 fish plants, and up to 20,000 fish plant workers. Although some of the plants are highly automated, highly efficient operations that produce year-round. (National Sea's Arnold's Cove plant and Beothuck Fisheries’ Valleyfield plant are examples of a modern year round fish processing industry.) Many of the rest were put there for political reasons, often paid for by tax dollars, an often barely able to give their workers the 420 hours needed to qualify for 34 weeks of employment insurance....2. From 2004, a short news release from then-fish minister Trevor Taylor. An extract:
The pulp and paper industry in Newfoundland has only 60% of its 1972workforce, while the fishplants employ twice as many as they did in 1972. Even the number of loggers is down by almost50%, while the number of fishermen continues to climb. In 1972 the Newfoundland unemployment rate was eight per cent. Since the advent of the "stamp fishery" and easier EI it has averaged between 15 and 20 per cent. A good quarter of that unemployment is directly attributable to the "stamp fishery."
Work at fish plants tends to be short-term in rural areas where employment opportunities are low and unemployment rates are high. The Fish Processing Policy Review Commission, under the direction of Commissioner Eric Dunne (Dunne Report), found that in real terms plant workers' average employment income in the province had declined to $9,660 in 2001. The outlook for plant workers is unclear given that technological innovations continue to reduce the labour demands of the fishing industry.3. A typical Williams administration response, to date. The federal government has followed the same approach.
The Government of Newfoundland and Labrador will provide an additional $2.4 million to assist fish plant workers who will likely not secure sufficient hours to qualify for Employment Insurance. The Honourable John Ottenheimer, Acting Municipal Affairs Minister, today announced the funding to meet employment support needs in the province’s fishery.4. Fishery reports. The problems have been studied - a lot; here are just two.
Williams: is he completely nuts?
It's not like people haven't called him nutty nutty nutbar before.It's not like his behaviour hasn't grown somewhat erratic lately, (think John Hickey in and out of cabinet).
Forget his glee at demolishing the largest fishing company in Atlantic Canada. Is it really a "golden opportunity"?
Now Danny Williams claims that the fish processing sector will collapse within five years if we don't start importing labourers from other countries at high speed.
This is one bizarre claim, given that Williams knows full well the processing industry needs to shed workers at high speed to restore profitability. There are way too many workers chasing too few fish. Wages are dropping. Hours of work are dropping and in some plants work is going begging because it simply isn't worth people's while to drive to another community for the measly few hours work involved.
Don't just believe it because you read it in Bond Papers.
Believe the head of the hunter-gatherers union, Earl McCurdy, who has been busily working to get both the federal and provincial governments to pony up for an early retirement package.
Believe Danny Williams who only last year - that's right - last year was writing to the federal party leaders trying to get their support for yes, an early retirement package for workers. In fact, an early retirement package was the very first thing Williams went looking for from whoever became Uncle Ottawa.
So is he nuts?
No.
By Danny Williams' own account he was caught in a conversation with other premiers and a reporter about immigration. Other provinces are farther ahead in handling the immigration issue.
Around Bond Papers, it looks like he got jammed up in a scrum, felt the need to offer input and in the classic four Yorkshireman way, basically said we'd have to get our immigration act in gear because if we didn't: Armageddon.
Well instead, Danny winds up looking like all his bags were packed and he's ready to go, leaving on a jetplane to Looneyville.
And for those who think we will wind up importing Bulgarian fishwomen like they've done in the Martimes - just because they've done it in the Maritimes - think again.
They don't have the humongous surplus of capacity we do. The numbers vary but Bond Papers can find people who will tell you that we can actually produce a thriving industry with merely 10-20% of the 100+ fish processing plants dotted around the island portion of the province.
Fewer than 20 plants.
If the early retirement thing works, there will be negligible demand for labour beyond what can be supplied by the local labour market.
Now comes the tricky part.
If the provincial government would get out of the way, the fish processing sector could sort itself out and find new markets and new production ideas that require fewer workers.
Unfortunately the current provincial fish minister [right] thinks he's still in the 1980s. He busily piles on regulations designed to frustrate the marketplace, drive up costs, and in the case of Fishery Products International keep the economic pressure on a company that would have righted itself long ago were it not for the provincial government's neglect or as one suspects, outright mischief.No, Danny is not nuts.
Well, not drooling on himself, need a straight-jacket, barking like a dog, hearing voices, up his meds kinda nuts.
Danny Williams just has this habit of pulling things out of any available orifice when he feels the need. When Danny gets caught
Sadly, in this farce, the Premier has enablers: like Paul Oram, his current parliamentary assistant, who seems to have no function other than laud the Premier's magnificence in hopes that the Premier will elevate Oram to a cabinet stipend.
Sometimes it works. Sometimes, as in this instance, it doesn't. We are now in Day Two of Immi-gate and already we have the provincial fisheries department saying it has no studies on labour demands in the processing sector, even though Williams claimed to have read said studies.
And the story of the serious questions about the Premier's
Ooops.
The story likely won't last past today, however. There is always something else around these parts and tomorrow it will be the Auditor General's latest overall review of government spending.
Meanwhile, the fishery problems will slip back into the gloom, taking with it the thousands of men and women who continue to languish.
29 January 2007
Home is where the money is
The Fort Mac take on the recent trek by four Atlantic premiers.
While one woman in the crowd complained she was forced to move to Fort McMurray 10 months after the Abitibi paper mill closed in Stephenville, N.L., another transplanted Newfoundlander said he has no desire to return home.
‘‘I think they should go to Newfoundland with empty buses and bring them up here,’’ said Lee Perkins, who’s now in charge of Fort McMurray’s water and sewer lines.
‘‘I’m easily doubling my pay here, and where my university-educated wife and I were working back home, someone had to die or retire for us to move up in our jobs,’’ Perkins said.
Lower Churchill: old news makes news
CBC Radio is quoting a mainland analyst that exporting Lower Churchill power will likely mean an upgrade (expansion) of the electrical power grid in Quebec.
Nothing new in that.
As Bond Papers noted in August 2006, the joint Ontario/Quebec proposal to work with Newfoundland and Labrador on the Lower Churchill included upgrading the transmission capacity across Quebec as well as upgrading the inter-provincial connection. The latter cost, in particular, was to be borne by Ontario and Quebec.
As noted by Bond at the time, all those costs - known and predictable at the time the Premier decided to "go-it-alone" - will now be borne by Newfoundland and Labrador Hydro.
The other option - the $2.0 billion plus underwater route - is apparently also under consideration, as CBC reports in a comment from provincial natural resources minister Kathy Dunderdale.
About the only way to deal with this issue and thereby allow the Lower Churchill power to get to market at competitive prices is to get the federal government to underwrite the costs somehow. In October 2006, Bond Papers pointed out that the federal government wasn't interested in loan guarantees for the Lower Churchill, despite what the Premier claims. Rather, the federal interest- if they have any at all - would be in taking an equity stake.
Nothing new in that.
As Bond Papers noted in August 2006, the joint Ontario/Quebec proposal to work with Newfoundland and Labrador on the Lower Churchill included upgrading the transmission capacity across Quebec as well as upgrading the inter-provincial connection. The latter cost, in particular, was to be borne by Ontario and Quebec.
As noted by Bond at the time, all those costs - known and predictable at the time the Premier decided to "go-it-alone" - will now be borne by Newfoundland and Labrador Hydro.
The other option - the $2.0 billion plus underwater route - is apparently also under consideration, as CBC reports in a comment from provincial natural resources minister Kathy Dunderdale.
About the only way to deal with this issue and thereby allow the Lower Churchill power to get to market at competitive prices is to get the federal government to underwrite the costs somehow. In October 2006, Bond Papers pointed out that the federal government wasn't interested in loan guarantees for the Lower Churchill, despite what the Premier claims. Rather, the federal interest- if they have any at all - would be in taking an equity stake.
A view from Labrador West
Well, so much for spelling your humble e-scribbler's name correctly.
But at least people are reading.
For the record, here's the original post. Note the update which gives a much less speculative version of things.
Also, here's a chunk of your humble e-scribbler's e-mail to the Aurora's editor in response to the editorial:
But at least people are reading.
For the record, here's the original post. Note the update which gives a much less speculative version of things.
Also, here's a chunk of your humble e-scribbler's e-mail to the Aurora's editor in response to the editorial:
Information from people expert in mines and the issues involved with mines like Scully leads me to believe that the liabilities associated with an aging mine relatively close to shutdown may have led CT to make its decision. Those liabilities are largely undefined but one can readily imagine what they might be.
They might include long-term power costs but they might also involve liabilities related to the shut down of existing operations.
Taken altogether, a company like CT would make an informed decision on whether or not to purchase an existing operation and bring onstream deposits from across the border in Quebec. While the company would not - understandably - discuss specifics, we can get a good idea if we use a little imagination and some informed speculation.
That said, I certainly wouldn't suggest anyone in Labrador west to to take a pessimistic outlook on the future. There is plenty of potential including Bloom Lake. We will all have to wait as the companies involved or potentially involved sort out their plans. CT's announcements shouldn't be seen as a setback, but merely as the companies working through options. In the announcement, CT indicated - and I take it at face value - that they are continuing to explore options. As long as that continues there is reason for hope, and for continued prosperity in one of the strongest economic regions of our province.
A sign of the economic decline
In the midst of Danny Williams' rhapsodizing to The Telegram today (not available online) about how good everything supposedly is in the province, comes this comment:
Now the Premier is talking about achieving that target in 2017 or 2018.
Maybe.
So what changed in the past 18 months?
"We could be contributors to (federal) equalization within a decade. And, we have also been using our wealth to make strategic investments in education, health care, infrastructure and poverty reduction."Only a year or so ago, economists like Wade Locke were talking about Newfoundland and Labrador getting off Equalization - that is, become a "have" province - around 2007 or 2008.
Now the Premier is talking about achieving that target in 2017 or 2018.
Maybe.
So what changed in the past 18 months?
Every bit helps, shurely
Danny Williams didn't waste any time issuing a "news" release proclaiming his trip to Alberta a great success.
Don't look for anything concrete mind you, like a contract.
Nope.
The oil industry in Alberta is looking forward to their buy-sell forum in March which, incidentally, is where NOIA will be focusing much its energy on behalf of its members. NOIA likely figured out that junkets usually don't produce much except the palaver seen thus far.
Danny didn't include NOIA in his entourage for some unfathomable reason.
But I digress.
Speaking of vacuous comment devoid of meaning, though, the official government release quotes a representative of Production Services Network:
Don't look for anything concrete mind you, like a contract.
Nope.
The oil industry in Alberta is looking forward to their buy-sell forum in March which, incidentally, is where NOIA will be focusing much its energy on behalf of its members. NOIA likely figured out that junkets usually don't produce much except the palaver seen thus far.
Danny didn't include NOIA in his entourage for some unfathomable reason.
But I digress.
Speaking of vacuous comment devoid of meaning, though, the official government release quotes a representative of Production Services Network:
"I was very pleased to meet with the business and community leaders of Edmonton and Fort McMurray to discuss ways we can help each other grow our businesses," said Roger Clarke of Production Services Network. "I believe that this mission will provide long term benefit to our company, the oil and gas industry of Newfoundland and Labrador and the economy in general. I thank the Government of Newfoundland and Labrador for this opportunity."Great company with tons of expertise both here and abroad, but it isn't like a former division of Halliburton needs Danny Williams to introduce the company to the oil business.
Turning the clock back on economic development
Q: What's the distance from Newfoundland and Labrador to Alberta?
A: 40 feet.
That's the length of a standard shipping container.
With the slowdown of the oil industry offshore Newfoundland and Labrador, grace a M. Williams, the local supply and service industry association organized a workshop. NOIA has continued to work steadily on promoting the business connections between this province and Alberta. There was a scouting mission in December and there is another workshop coming in March.
Interesting to see in the news coverage from the trek by four Atlantic provincial premiers to Alberta this past week, there were few mentions of the companies the four wise ones were supposedly there to promote.
Well, there is reference in stories about New Brunswick but not much about Newfoundland and Labrador. Stories about this province, like this one from the Edmonton Sun, talk about the potential that will come eventually from industrial development in the easternmost province.
And reading Danny Williams' comments, you'd think were were in 1977 or maybe 1982, listening to Brian Peckford painting pictures of future glory. But those were the days long before there actually was an oil industry in Newfoundland and Labrador.
The problem for Danny Williams is that the oil industry he inherited in 2003 was well-developed, not the green field he seems to imagine it was. Expertise abounds in the local oil patch in everything from the engineering and other supply and service industries to the geologists, engineers and other at the offshore regulatory board. They know the industry here and abroad. Many of the local companies have parleyed their local experience into solid working relationships with the oil majors - Big Oil - and into contracts in the Gulf of Mexico and in central Asia among other places. Even Danny's own company has been known to work overseas for ExxonMobil.
All thanks to the oil and gas industry in the province that was well developed by the time Williams got to the Premier's Office.
In 2003, the local oil industry could look forward to Hebron: $2.0 billion in construction work, the bulk of it coming to this province through the small gravity-base structure the proponents had already selected as the mode of production. They looked at about $10 billion in revenue for the provincial government with - inevitably - more to come from development of adjacent fields.
By 2005/2006, those same companies were looking forward to development of Hibernia South. Even with a limited additional construction work if the companies used tiebacks to produce the oil, there would be tons of other work and a longer life for Hibernia.
According to the most recent statistics from the Canada-Newfoundland and Labrador Offshore Petroleum Board, the addition of the possible and probable reserves at Hibernia would give the project another 20 years of life.
And for the provincial government the bulk of that production would come at a time when provincial royalties would leap from 5% to 30%. The cash for the provincial treasury? Probably as much as Hebron.
Not any more.
Overnight in April 2006, the oil industry in Newfoundland and Labrador went from looking forward to staggering growth to being staggered by the virtual shutdown of activity. Sure, oil will continue to flow and the provincial government coffers will be stuffed with oil money. But at Hibernia, work is already slowing down thanks to government's decision - apparently taken when the Hebron talks failed - to veto any further development.
In early 2006, a company involved in industrial development in Newfoundland and Labrador could look forward to an almost unprecedented series of major work projects. Hebron, then the Long Harbour smelter. Hibernia South tossed in for good measure. As the construction phase of each of those slowed, the Lower Churchill would be running up. A steady period of growth lasting from 2006 up to 2015.
In place of that, there is now nothing but promises of future glory. Strange promises too, since Danny Williams seems to think that all the projects in the slings are being actively pursued. Almost every news story coming from Alberta this past week talked about projects in this province that don't actually exist.
Strange promises, given the very first sentence of the famous Danny Williams plan for Newfoundland and Labrador said that "[o]ur goal is to grow our economy and provide new job opportunities for Newfoundlanders and Labradorians."
There was no mention of resetting the province's economic development clock to 1984.
A: 40 feet.
That's the length of a standard shipping container.
With the slowdown of the oil industry offshore Newfoundland and Labrador, grace a M. Williams, the local supply and service industry association organized a workshop. NOIA has continued to work steadily on promoting the business connections between this province and Alberta. There was a scouting mission in December and there is another workshop coming in March.
Interesting to see in the news coverage from the trek by four Atlantic provincial premiers to Alberta this past week, there were few mentions of the companies the four wise ones were supposedly there to promote.
Well, there is reference in stories about New Brunswick but not much about Newfoundland and Labrador. Stories about this province, like this one from the Edmonton Sun, talk about the potential that will come eventually from industrial development in the easternmost province.
And reading Danny Williams' comments, you'd think were were in 1977 or maybe 1982, listening to Brian Peckford painting pictures of future glory. But those were the days long before there actually was an oil industry in Newfoundland and Labrador.
The problem for Danny Williams is that the oil industry he inherited in 2003 was well-developed, not the green field he seems to imagine it was. Expertise abounds in the local oil patch in everything from the engineering and other supply and service industries to the geologists, engineers and other at the offshore regulatory board. They know the industry here and abroad. Many of the local companies have parleyed their local experience into solid working relationships with the oil majors - Big Oil - and into contracts in the Gulf of Mexico and in central Asia among other places. Even Danny's own company has been known to work overseas for ExxonMobil.
All thanks to the oil and gas industry in the province that was well developed by the time Williams got to the Premier's Office.
In 2003, the local oil industry could look forward to Hebron: $2.0 billion in construction work, the bulk of it coming to this province through the small gravity-base structure the proponents had already selected as the mode of production. They looked at about $10 billion in revenue for the provincial government with - inevitably - more to come from development of adjacent fields.
By 2005/2006, those same companies were looking forward to development of Hibernia South. Even with a limited additional construction work if the companies used tiebacks to produce the oil, there would be tons of other work and a longer life for Hibernia.
According to the most recent statistics from the Canada-Newfoundland and Labrador Offshore Petroleum Board, the addition of the possible and probable reserves at Hibernia would give the project another 20 years of life.
And for the provincial government the bulk of that production would come at a time when provincial royalties would leap from 5% to 30%. The cash for the provincial treasury? Probably as much as Hebron.
Not any more.
Overnight in April 2006, the oil industry in Newfoundland and Labrador went from looking forward to staggering growth to being staggered by the virtual shutdown of activity. Sure, oil will continue to flow and the provincial government coffers will be stuffed with oil money. But at Hibernia, work is already slowing down thanks to government's decision - apparently taken when the Hebron talks failed - to veto any further development.
"But the goal is to stagger the projects so people don't have a job for 18 months and then have to turn around and leave the province again," Williams added.That was the goal, or at least the expectation.
In early 2006, a company involved in industrial development in Newfoundland and Labrador could look forward to an almost unprecedented series of major work projects. Hebron, then the Long Harbour smelter. Hibernia South tossed in for good measure. As the construction phase of each of those slowed, the Lower Churchill would be running up. A steady period of growth lasting from 2006 up to 2015.
In place of that, there is now nothing but promises of future glory. Strange promises too, since Danny Williams seems to think that all the projects in the slings are being actively pursued. Almost every news story coming from Alberta this past week talked about projects in this province that don't actually exist.
Strange promises, given the very first sentence of the famous Danny Williams plan for Newfoundland and Labrador said that "[o]ur goal is to grow our economy and provide new job opportunities for Newfoundlanders and Labradorians."
There was no mention of resetting the province's economic development clock to 1984.
28 January 2007
Building the New Jerusalem - eventually
Interesting that Premier Danny Williams spent a lot of time during his trip out west telling people about the oil, gas and hydro-electric projects under development in Newfoundland and Labrador.
Odd that people in this province wouldn't know what the heck he is talking about.
In Newfoundland and Labrador, the last poll showed the economy was the number one issue for people in the province.
62% of those polled disapproved of Danny's handling of the economy.
There's good reason for their view:
Hebron is dead.
Hibernia South is not completely dead but Carnell's is warming up the hearse as we speak.
Yes, the Lower Churchill is being studied but until Danny can come up with $9.0 billion, it remains exactly the same as the Frank Moores development 30 years ago: a promise.
There are no gas projects under development since there is no gas royalty regime. Government has been sitting on that for a decade, although there is a possibility Danny Williams will finally issue it sometime this year.
There is a liquid natural gas plant being studied for Placentia Bay but studies don't count. Ditto the oil refinery study.
Outside of the CVRD smelter/refinery for Voisey's Bay that CVRD wants to fast-track, there isn't anything in the development pipeline. Danny stopped it all.
So what is the Premier talking about?
Only he knows, apparently, like only he knows about this fish plant collapse thing he kept to himself.
Interestingly enough, Danny Williams talks about having an economy here in about 10 years.
That's interesting because Danny won't be around in 10 years. He'll be out of office in three, satisfied at progress and off to some new adventure. That is, if he isn't out by Easter frustrated at all the scandals and resignations in his administration. (That was the mood in early January, people; it could come back.)
Williams' "10 year" comment is interesting because three years ago he said it would take him two terms - eight years - to start producing results. Now with five years to run on that promise, he suddenly slides the time scale back to another decade from now. Danny Williams is always ready for a better tomorrow. Seems like the farther away tomorrow is, the better.
What's most interesting of all though, is that if Williams had been able to close the deal on Hebron, done his job on Hibernia South and produced the energy plan already - as other governments have done before him - we wouldn't be looking at a decade before people could think about maybe returning home.
Nope.
Things would be happening right now.
Instead, Danny Williams is still talking about how good things will be in his New Jerusalem.
Eventually.
Odd that people in this province wouldn't know what the heck he is talking about.
In Newfoundland and Labrador, the last poll showed the economy was the number one issue for people in the province.
62% of those polled disapproved of Danny's handling of the economy.
There's good reason for their view:
Hebron is dead.
Hibernia South is not completely dead but Carnell's is warming up the hearse as we speak.
Yes, the Lower Churchill is being studied but until Danny can come up with $9.0 billion, it remains exactly the same as the Frank Moores development 30 years ago: a promise.
There are no gas projects under development since there is no gas royalty regime. Government has been sitting on that for a decade, although there is a possibility Danny Williams will finally issue it sometime this year.
There is a liquid natural gas plant being studied for Placentia Bay but studies don't count. Ditto the oil refinery study.
Outside of the CVRD smelter/refinery for Voisey's Bay that CVRD wants to fast-track, there isn't anything in the development pipeline. Danny stopped it all.
So what is the Premier talking about?
Only he knows, apparently, like only he knows about this fish plant collapse thing he kept to himself.
Interestingly enough, Danny Williams talks about having an economy here in about 10 years.
That's interesting because Danny won't be around in 10 years. He'll be out of office in three, satisfied at progress and off to some new adventure. That is, if he isn't out by Easter frustrated at all the scandals and resignations in his administration. (That was the mood in early January, people; it could come back.)
Williams' "10 year" comment is interesting because three years ago he said it would take him two terms - eight years - to start producing results. Now with five years to run on that promise, he suddenly slides the time scale back to another decade from now. Danny Williams is always ready for a better tomorrow. Seems like the farther away tomorrow is, the better.
What's most interesting of all though, is that if Williams had been able to close the deal on Hebron, done his job on Hibernia South and produced the energy plan already - as other governments have done before him - we wouldn't be looking at a decade before people could think about maybe returning home.
Nope.
Things would be happening right now.
Instead, Danny Williams is still talking about how good things will be in his New Jerusalem.
Eventually.
CVRD looking to speed up Long Harbour
This report from the Toronto Star states CVRD is looking to speed up construction of its Long Harbour smelter/refinery to bring it on line before 2011.
Absolutely no sign though, that the company wants to build a second refinery in Labrador.
Wonder where some people get strange ideas like that?
Of course!
They make them up.
Absolutely no sign though, that the company wants to build a second refinery in Labrador.
Wonder where some people get strange ideas like that?
Of course!
They make them up.
Quarterback Harper: Game on!
It's SuperBowl Sunday and what better day to launch a political campaign.
The Globe is reporting the Connies, led by Stephen Harper, will be taking the field with a series of what sound like attack ads.
Yes, the Prime Minister who decries other people's attacks will reportedly "mock Stephane Dion's leadership abilities." If ever there was a more obvious admission that the Connies are just a tad afraid of Dion, this would be it.
Of course, attack ads are nothing new for Stephen Harper. This is the same prime minister who brought you "balloon fear". The link is dead - no point in reminding people of your hypocrisy - but you'll get a reminder of previous Connie negative ads from the rest of the post. Of course, Connie advertising tends to be completely ineffectual, especially between campaigns as this post from August 2005 will remind you.
Anyway, we can all know that the 2007 election campaign is on, whether we go to the polls this spring or sometime in the fall.
The first run of campaign ads tells me so.
The Globe is reporting the Connies, led by Stephen Harper, will be taking the field with a series of what sound like attack ads.
Yes, the Prime Minister who decries other people's attacks will reportedly "mock Stephane Dion's leadership abilities." If ever there was a more obvious admission that the Connies are just a tad afraid of Dion, this would be it.
Of course, attack ads are nothing new for Stephen Harper. This is the same prime minister who brought you "balloon fear". The link is dead - no point in reminding people of your hypocrisy - but you'll get a reminder of previous Connie negative ads from the rest of the post. Of course, Connie advertising tends to be completely ineffectual, especially between campaigns as this post from August 2005 will remind you.
Anyway, we can all know that the 2007 election campaign is on, whether we go to the polls this spring or sometime in the fall.
The first run of campaign ads tells me so.
27 January 2007
Fishery reform needed: scientist
Sometimes it takes an extreme presentation to grab attention.
Not so any more, but many will likely scoff at the idea that entire species will disappear within the next half century if we continue not just current fishing practices but also our overall approach to the marine environment. You can find a summary of Worm's collaborative work with other scientists here and the complete paper, from the magazine Science, here.
This is not Worm's first foray into this research area . In 2003, he authored a paper with Dr. Ransom Myers on the decline of predatory fish species, including cod. They concluded, among other things, that "the global ocean has lost more than 90% of large predatory fishes."
The chart [right] demonstrates the rapid decline of biomass on the southern Grand Banks, but this is only one of
several areas showing a dramatic and rapid biomass depletion in the same relatively short space of time. [left]
Undoubtedly some, predictable, voices will rush forward to blame the entire thing on the federal government and demand compensation for what has been done to "our" fishery. They will note Worm's comments - quoted in the Globe - about Iceland's handline fishery for cod and likely use that as a further argument against the supposedly evil federal government.
What these voices miss - aside from, in one case, complicity in destroying local cod stocks through overfishing - is that the changes required in local fishing practices go far beyond the transient issues of who owns a fish processing company in this province or how many fish processors can work for poverty wages, topped off with federal hand-outs.
The fish processing sector in Newfoundland and Labrador has long employed considerably more people than needed. That economic demand was one of several factors that contributed to the intense fishing pressure placed on stocks throughout the last half of the 20th century. That demand continued right up to the cod moratorium in 1992.
The demand for quota is no less driven by the pressure from fish harvesters in all sizes of vessels. The current fishing management system - evolved over 50 years - continues to press harvesters to harvest more, to increase pressure on new species such as shrimp, and generally to contribute to the drastic decline noted by Myers and Worm. The demand to keep all plants open, the constant cry for a food fishery - and a commercial fishery on a damaged stock like cod - are all indications that many in Newfoundland and Labrador simply have not grasped the magnitude of the problem nor the folly of their own efforts.
Neither the federal nor provincial governments alone or together decimated fish stocks. The current state of the fishery in Newfoundland and Labrador was driven by many factors. Fixing the problem will take a deliberate effort in which established interest will have to be put aside.
The answer does not lie in simply copying Iceland's hook and line fishery. Neither does it rest with developing a collective marketing effort: surely better advertising is a suggestion from people who truly have no grasp of the issue at hand. Nor does the answer lie in encouraging migrant labour for local fishplants. Such actions are simplistic.
Changes needed in the Newfoundland and Labrador fishery will be sweeping and touch every aspect of both current operations and our collective attitudes toward the industry. it will require leadership from politicians and others in the community with a clear-eyed view of both the problem and the solution - or at least the way to achieve a solution.
Sadly, there seems to be no one in Newfoundland and Labrador - neither in the government, the opposition, the union or among processors - who can provide that leadership. We may be in as desperate a spot as we were nearly a century ago when one man's ideas for reform were rejected across the board in the then-country of Newfoundland, only to adopted elsewhere with great success.
At least then, someone in Newfoundland and Labrador seemed to have a clue about what to do.
Boris Worm, co-author of a controversial report that projects the collapse of all of the world's commercially fished stocks within 50 years, said there is still a chance for already fragile fisheries to rebound if certain measures are introduced.Only two decades ago, the idea of species collapse would have had Dr. Worm laughed off the podium right after the guy who said Men in Black was a documentary.
Not so any more, but many will likely scoff at the idea that entire species will disappear within the next half century if we continue not just current fishing practices but also our overall approach to the marine environment. You can find a summary of Worm's collaborative work with other scientists here and the complete paper, from the magazine Science, here.
This is not Worm's first foray into this research area . In 2003, he authored a paper with Dr. Ransom Myers on the decline of predatory fish species, including cod. They concluded, among other things, that "the global ocean has lost more than 90% of large predatory fishes."
The chart [right] demonstrates the rapid decline of biomass on the southern Grand Banks, but this is only one of
several areas showing a dramatic and rapid biomass depletion in the same relatively short space of time. [left]Undoubtedly some, predictable, voices will rush forward to blame the entire thing on the federal government and demand compensation for what has been done to "our" fishery. They will note Worm's comments - quoted in the Globe - about Iceland's handline fishery for cod and likely use that as a further argument against the supposedly evil federal government.
What these voices miss - aside from, in one case, complicity in destroying local cod stocks through overfishing - is that the changes required in local fishing practices go far beyond the transient issues of who owns a fish processing company in this province or how many fish processors can work for poverty wages, topped off with federal hand-outs.
The fish processing sector in Newfoundland and Labrador has long employed considerably more people than needed. That economic demand was one of several factors that contributed to the intense fishing pressure placed on stocks throughout the last half of the 20th century. That demand continued right up to the cod moratorium in 1992.
The demand for quota is no less driven by the pressure from fish harvesters in all sizes of vessels. The current fishing management system - evolved over 50 years - continues to press harvesters to harvest more, to increase pressure on new species such as shrimp, and generally to contribute to the drastic decline noted by Myers and Worm. The demand to keep all plants open, the constant cry for a food fishery - and a commercial fishery on a damaged stock like cod - are all indications that many in Newfoundland and Labrador simply have not grasped the magnitude of the problem nor the folly of their own efforts.
Neither the federal nor provincial governments alone or together decimated fish stocks. The current state of the fishery in Newfoundland and Labrador was driven by many factors. Fixing the problem will take a deliberate effort in which established interest will have to be put aside.
The answer does not lie in simply copying Iceland's hook and line fishery. Neither does it rest with developing a collective marketing effort: surely better advertising is a suggestion from people who truly have no grasp of the issue at hand. Nor does the answer lie in encouraging migrant labour for local fishplants. Such actions are simplistic.
Changes needed in the Newfoundland and Labrador fishery will be sweeping and touch every aspect of both current operations and our collective attitudes toward the industry. it will require leadership from politicians and others in the community with a clear-eyed view of both the problem and the solution - or at least the way to achieve a solution.
Sadly, there seems to be no one in Newfoundland and Labrador - neither in the government, the opposition, the union or among processors - who can provide that leadership. We may be in as desperate a spot as we were nearly a century ago when one man's ideas for reform were rejected across the board in the then-country of Newfoundland, only to adopted elsewhere with great success.
At least then, someone in Newfoundland and Labrador seemed to have a clue about what to do.
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