More fibre math

Ok.

How much is this fibre optic thing worth?

The proponents and the provincial innovation minister have referred to $82 million.

The deal announced last fall which includes the second link across the Gulf to Nova Scotia was supposedly worth $52 million. It's also been described as $37 million, but let's take the higher number since it seems to fit.

The only way to get the $82 million figure is to include a federal/provincial initiative announced in 2005 totalling $29.9 which included a total of $10 million split equally between St. John's and Ottawa with Persona tossing in $19.9 million of its own.

Ok. Following so far?

The provincial involvement in the deal last fall was pegged at $15 million.

Add to that the $5.0 million from the earlier project and you get a total of $20 million in provincial cash on a total cost of $82 million.

That gives the provincial involvement of 24% of the cost of the whole schmeer. If you look at the initiative last fall, the provincial government has a 28.8% stake (15/52 = 28.8).

Persona has previously stated that it's commitment in the whole enterprise is about $30 million. (presumably including the $19.9 from the earlier venture).

That puts Persona's involvement in the whole schmeer at 30%. If everything else follows, its share of the $52 million second project appears to be about $10 million, or 19%.

Maybe, just maybe the provincial government would consider providing a simple and straightforward accounting of the whole venture.

At the same time, maybe innovation minister Trevor Taylor would consider making a most obvious argument that so far he has avoided. We can call it innovative if that helps him see the point.

Federal de-regulation of telephone markets may give an unfair advantage to existing dominant players in small markets like Newfoundland and Labrador. Developing new infrastructure to which all potential new competitors can have access (Bell Aliant already owns its own) forestalls the prospect of creating an unfair competitive climate.

It's good for the market as a whole and, if the provincial government can acquire assets for its own emergency purposes in the process, then there is ample justification for a government investment in developing added infrastructure.

Maybe the bleeding obvious - like the s.60 argument for the Equalization racket - doesn't have enough of a fresh-from-the-package smell to attract the attention of people who want everything they've touched to be, well, new.

Sometimes, though, innovation would actually be stating the plainly obvious.

-SRBP-

FPI deal possible, but no quotas for Rideout

After a weekend meeting with the principals, federal fish minister Loyola Hearn is still optimistic a deal can be done.

There just won't be any quotas under the control of the provincial government and Tom Rideout, right.

-SRBP-

On the horns of a nationalist dilemma

Meanwhile, things in Newfoundland cannot be going too well, if columnists not normally given to doubting the Premier find themselves doing just that.

Williams had a genuine desire to lift Newfoundland out of its second-class morass when he was first elected. Having encountered all the usual obstacles along the way, however, he has become increasingly volatile. This is regrettable, since it gives the ever-present gallery of negative nellies ample opportunity to shift focus away from the issues and onto the person.

There are those of us who would contend that the volatile and hostile rhetoric has been present from the outset. As for the personal, well, that's what the man himself chooses to make the focus of everything. Those who have criticised him personally simply fall into the trap of the Premier's own rhetoric, which is calculated to avoid a discussion of the issues themselves and more particularly whether or not the Premier's approach is the appropriate one.

-SRBP-

Update: Once you've finished with Peter's dilemma, above, consider the silliness offered up as a self-described "brilliant" suggestion from Bill Rowe. For those who don't know, Bill is a non-practising lawyer who recently received his Q.C. and for a brief period was Danny Williams' personal emissary to Hy's.

Rowe suggests in his most recent column that Danny Williams should take a shot at becoming leader of the federal Liberals.

This is funny - fall-down laughing funny - for the following reasons:

1. The job of leading the federal Liberal Party is already taken, by a federalist. Williams' autonomist ideas wouldn't really fit.

2. Williams himself has made savage attacks on the Liberal Party in the past and continues to do so as circumstances warrant. Witness his recent speech in Toronto and the completely fictitious account of the Churchill Falls deal he gave.

3. This is the same Bill Rowe who, not so long ago, seriously proposed that Newfoundland and Labrador should abandon federal Canada and instead merge with an independent Quebec. Rowe didn't think the new state would be federal.

Nope.

Bill thinks it's a brilliant idea to have Newfoundland and Labrador ruled from Quebec City in a unitary state, undoubtedly in which French was the only official language.

Rowe's French is passable but apparently prevented him from reading a biography of Trudeau before writing a column on it. Thank goodness a Globe columnist printed her views two days before Rowe's appeared in print. Otherwise, all we'd have gotten was Rowe's personal reminiscences of the 1968 federal Liberal leadership convention.

Of course that was before Williams became a Progressive Conservative. Odd that Rowe didn't see fit to suggest Williams should revive the old PC party on a national basis. That's something well within the Premier's grasp and, ya know, there might even be a seat for Rowe to run in, if that's what he wanted to do.

It might be nice to see the two Rhodes amigos running as a tag-team of sorts.

Trudeau favours multi-lingualism over bilingualism

Justin Trudeau told an audience of 2,000 teachers that he did not favour bilingualism, favouring instead trilingualism and quadrilingualism.

He also compared separatists to schoolchildren, yelling to get attention.

Predictably, some people find this characterization of separatists upsetting.

-SRBP-

High flight

Conservative cabinet minister Jean-Pierre Blackburn spent almost $150,000 on aircraft charters, yet filed expense claims showing no airfares for these trips.

Mais, bien sur.

Blackburn has merely slipped the surly bonds of earthly accountability for expenses.

In fact, the majority of the flights on privately hired planes don't show up anywhere in Mr. Blackburn's public disclosure of ministerial travel and were only revealed through an Access to Information request by NDP researchers.

-SRBP-

FP backgrounder on the local oil and gas industry

From the Financial Post's Claudia Cattaneo, a feature piece on the local oil and gas industry over a year after the Hebron failure.

Your humble e-scribbler is quoted in the piece.

Even as people leave the province in large numbers to make a living they can't find locally, they support his bashing of outside interests, whether its big oil companies or the federal government, because he stands up for Newfoundland. They buy into Mr. Williams' claim that the government negotiated a bad deal on Hibernia and now must ensure the government takes a fair cut from future projects.

Mr. Gibbons, who signed the Hibernia deal nearly 17 years ago in an environment of low oil prices and greater risk, said it was a huge leap for the province.

"It's the deal that gave us the industry that we have today," he said.

After a decade with Jacques Whitford, Mr. Gibbons retired yesterday, but his interest in a thriving offshore hasn't diminished.

"Please, get at the table and negotiate, and let's get on with the next projects," he pleaded.

"We are going to lose the skilled people that are required even for the construction part. Today, they are flying to Alberta and flying back home. But in five years' time, they may move the spouse and the kids will do their education there. Then they might never come back."

As an interesting addition to that comment, check out Greg Locke's most recent blog entry. Locke is a professional photographer and journalist - as well as an avowed Newfoundland nationalist - who recently left the province to take up a management job with a string of Alberta weeklies.

His reports from Alberta on the real attitudes of ex-pats living there may give a clue to why people like Gibbons are so concerned:

Of my conversations so far with the Newfoundlanders, I'm hearing the "politically correct" phrases about returning to but it's not said with much enthusiasm. No mourning or homesickness to be heard. It's lacking that convincing little flutter in the voice. Indeed, those who have a decent paying job here are looking pretty happy. The flags may be flying proud but they are not ready to sacrifice their livelihoods or future to return to Newfoundland .

Locke's also got some observations on the Alberta government's royalty regime and its tax policy for those in this province who harbour more than a few delusions about how this province supposedly has signed bad oil development deals in the past or how this province is treated unfairly compared to Alberta.

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Telling fantasy from reality in the offshore

Premier Danny Williams is quoted by the Financial Post Saturday edition as saying that the provincial government is holding informal talks with the Hebron partners aimed at getting the project back on track.

Williams has made the same claim on several occasions since talks collapsed last April but there is no objective evidence the talks are occurring.

In the immediate aftermath of the collapse, Williams made a similar claim. His subsequent comments however, made it clear the operators had merely been contacting provincial officials to confirm the provincial position in light of the Premier's comments to news media. No talks took place.

Williams made the same claim to local news media recently, but as Offal News pointed out, no industry sources would confirm anything beyond routine contacts on unrelated matters.

It wouldn't be the first time Williams made a claim that turned out to be at odds with the facts. In 2004, Williams claimed to have the support of provincial premiers for his position
on Equalization offsets. No evidence to support the claim appeared and, in fact, the subsequent criticism both publicly and privately from other provinces - particularly Ontario's Dalton McGuinty - , suggest the original claim lacked foundation. A letter from McGuinty that Williams said was an endorsement of the position turned out to be little more than a routine letter that included general good wishes on talks between the federal government and the Williams administration.

Williams has also claimed that Prime Minister Stephen Harper has committed to a loan guarantee on the Lower Churchill. Harper has said nothing of the sort publicly. His written commitments - used by Williams in the current Equalization row - merely talk of a commitment to talks aimed at exploring possible support in the spirit of Hibernia.

The federal government initially provided loan guarantees to Hibernia but also invested directly in the project when one of the partners withdrew. As well, federal finance policy favours equity investment as opposed to loan guarantees.

According to the Post story, a Chevron spokesman "denied there are discussions or negotiations underway with the province."

A quick analysis of contending interests suggests there are no talks.

For a sitting Premier, facing criticism of his handling of the offshore in an election year, it bolsters his cause to claim that talks exist even if they are nothing more than rebuffed contacts initiated by the province.

For the industry, it would do no harm to confirm that there have been informal discussions but that obstacles remain.

Their continued denials of any talks suggest that they are simply stating the fact.Allowing the Premier to save face would be a simple and cost-free way of rebuilding a relationship that appears to have been damaged significantly in the wake of the Hebron collapse.

A sign of the bad blood between government and the operators came with the rejection by the province of the Hibernia South expansion. The province offered the public excuse that they rejected the application because it lacked crucial information. provincial officials glossed over the fact that they had failed to indicate they had any questions and took no action to find the information they sought, despite having the application in hand for the better part of a year.

In a related but unconfirmed story circulating in the local oil patch, senior officials of the province's Hydro corporation are said to have visited at least one of the Hebron operators last spring, after the talks collapsed, with a simple proposition: come back to the table, accept our position on Hebron and Hibernia South will proceed without a hitch.

If that story is true, it is a clear sign that talks ended in an atmosphere that can only be cleared with radical changes in position on both sides. If the story isn't true, its very existence suggests that feelings are running high and that the ill feeling on both sidesleft in the wake of the collapsed talks will take some time to disappate.

Obstacles do remain to Hebron talks, the same ones that existed previously. The provincial government continues to insist on a 4.9% equity position and has rejected any talk of investment tax credits or tax breaks. The provincial negotiating team is still led by Hydro's Ed Martin.

For the operators, the equity position remains a key problem especially so in light of the conflict of interest in having the future operating partner acting as the lead negotiator for the provincial treasury on taxes and royalties. To follow the Norwegian model of offshore management, as opposed to the Venezuelan or Nigerian one, that conflict of interest would definitely need to be addressed if talks could continue.

At least, the Andy Wells factor has been neutralized. Williams tried to install Andy Wells as head of the offshore regulatory board in a move that may have been aimed at stacking the deck in a manner more familiar in Venezuela or Nigeria than Norway. The related matter of fallow field legislation - which in Williams version appeared to be Venezuelan-style expropriation instead of Norwegain-style management - appears to be off the table entirely as well.

Those two elements would have given Williams his apparent preferred bargaining position: he holds all the options and the other party has no choice but comply. In the absence of that level of control of the situation, it is unlikely the provincial government would be eager to return to the bargaining table. The premier's rhetoric over the past year establishes his last position on hebron as his new minimum.

Since that exceeded what the companies were prepared to accept and in the absence of any legal means to force a deal on his own terms, it would appear highly unlikely there is any hope of getting hebron back on the rails.

That is until positions or players change.

-30-

Conoco drilling delayed in Laurentian until at least 2009

According to The Telegram, ConocoPhillips won't be drilling exploratory wells on its Laurentian basin properties until at least 2009 because of rig availability questions and problems in completing seismic surveys.

In addition to the global demand for deep water drilling rigs, the geology of the area is posing problems for seismic interpretation.

Seismic surveys are used to map what lies beneath the ocean floor. Waves of compressed air are shot toward the seabed, and the signal reflected back creates an image of rocks and pools of oil and gas that are found kilometres below the ocean floor.

In the case of the Laurentian surveys, the pulse bounced back multiple times and the images were unclear. What might have taken 10 months to evaluate took 18 months to clean up the images.

"The Laurentian Basin is an absolute frontier basin. There are no wells in the deepwater portion of that basin," said Hogg. "We are in our infancy in understanding the basin."

The Conoco land parcels are in water as much as 2,200 metres deep but only as shallow as 1100 metres. That puts them on par with the Orphan Basin and large portions of the Gulf of Mexico where the Jack 2 field was recently discovered. Even if commercial quantities of oil and gas are confirmed, the water depth involved would pose a challenge for current technology to exploit profitably.

Those practical challenges are one of the most potent arguments against any facile approach to land management such as fallow field that would demand development within as little as five or 10 years by a company or face expropriation. When it was originally discovered, Hebron was considered commercially non-viable since its heavy oil (circa API 21) and fractured structures posed significant problems for then-extant engineering and oil extraction ability. Only changes on the technical side coupled with changes in world oil demand made the project commercially viable some 20 years after it was discovered.

A Conoco spokesman also told the Telegram that

the company will continue to work with the province as it develops the royalty regime.

"That being said, it is important to us to have the royalty (regime) before we drill the well."

Premier Danny Williams told the Financial Post in an interview on Friday that the provincial government is working on a new oil and gas royalty regime. Key components of both will be a so-called "equity" position for the provincial government through its Hydro corporation.

Mr. Williams said the energy policy will require provincial equity stakes in both future oil and gas projects, but wouldn't reveal how much, other than it will be higher than the 4.9% negotiated for Hebron.

It will also include a natural gas royalty regime, which has also been expected for years, and cover environmental requirements and the electricity industry.

The gas regime has been completed and has been shared for feedback with Husky and ConocoPhillips Co., Mr. Williams said.

Unconfirmed reports put the equity demand at 10%. That could mean little to Husky, which is seeking to develop gas prospects on its White Rose project and which would be grandfathered through the equity provisions of the regime.

For companies like Conoco, however, such a demand, especially when the financial implications are still far from clear, could further delay exploration. Both Williams and his close associates have stated that the provincial government would pay for an equity position. They have yet to explain how the provincial government, supposedly labouring under an enormous debt burden, would find the hundreds of millions of dollars such a stake could cost. Nor have they stated how an equity position would provide any financial or other benefits to the province beyond the huge returns already received. Williams has consistently denigrated existing royalty regimes despite their delivering over 25% of the provincial government's own-source revenue.

if the province's royalty regime raises the cost of exploration and development beyond the company's profitability on a frontier field, Conoco's drilling program - now forecast for 2009 at the earliest - may well be pushed back further into the future.

-30-

Williams "a bumptuous blowhard"

The National Post weighs in:

Even if Mr. Williams disagrees with all this, he is at the very least guilty of coming off as a bumptious blowhard. It is unusual enough for a provincial premier to campaign against a sitting federal government (most confine themselves to championing federal candidates from their own party within their province), but it is unprecedented for a premier to advocate nationally for the defeat of a government in Ottawa of his own party.

This is not a sign of how bad the Harper government has treated Newfoundland. Rather, Mr. Williams’ latest outrageous proposals are a sign that he has become a captive to his own bluster. He has gone to this well so often, that each dip must be bigger and splashier than they last, until now he has no credibility left.

And if that wasn't enough, there's Don Martin's take:

Of course, there's a wingnut factor to be factored into any Williams damage assessments.

This is, after all, the premier who yanked down Canadian flags in protest, howled at Paul Martin with identical vitriol and stormed out of his first First Ministers conference with little provocation.

Williams makes the point that Newfoundland is on the verge of achieving economic independence, an overdue prosperity from offshore oil that could be short-lived.

-30-

Williams' Toronto speech dissected

From Offal News.

Clearly the needs of the personal trumps the partisan and the public policy. This is amateur politics.

Sound familiar?

From a decade ago, a Canadian Press story on Brian Tobin's version of the Lower Churchill:

Labrador's hydroelectric project is fated to be a failure, says analyst

Monday, March 9, 1998
by Michelle MacAfee, Canadian Press

A new hydroelectric project in Labrador would be "economic craziness" for the Newfoundland and Quebec governments, as well as for Ottawa which is being asked to provide up to $2 billion, says a national energy watchdog.

"This deal has the makings of a major financial mistake," said Tom Adams of Energy Probe, a consumer and environmental lobby group.

"It will be generating high-cost power at a time when we are coming into a glut of low-cost power."

Newfoundland Premier Brian Tobin meets today with Quebec Premier Lucien Bouchard in this small Labrador town to outline how formal negotiations will proceed on a second power project on the Churchill River.

It's believed the negotiations will be framed around a $12-billion development that includes the construction of two dams and a $2-billion, 800-megawatt transmission line to the island portion of Newfoundland. Power would flow by 2007.

A source close to the project said the $12-billion plan will involve a large hydraulic generating station about three-fifths the size of Churchill Falls that will be built downriver closer to Goose Bay.

The source said two additional units will be built, increasing the station by about one-fifth, and some major water diversion dams will be built in Quebec to bring more water into Churchill Falls.

Even with few of the details announced, Adams says such a massive undertaking is simply not feasible given the current market and expectations for the future.

Small, local power stations throughout Quebec, Ontario and the northeastern United States would be able to produce power at about half the cost -- and with less risk of transmission problems -- of their Churchill competitor, Adams said from Toronto.

Newfoundland and Quebec are out of step with international power players, who are trying to reduce their exposure to financial risk, he added.

"They would have to cut their costs by about half to make this deal even start to appear attractive enough to be worth talking about."

Newfoundland Energy Minister Chuck Furey countered that two important external factors helped make this the perfect time for such a mammoth power project:

-- a hydroelectric project the size of the Lower Churchill would push the Canadian government as much as 20 per cent closer to meeting its international commitment to reduce greenhouse gases.

-- the American power market was recently deregulated, which is expected to make the industry more open.

"As you see a displacement of old forms of energy based on new-world realities, the new power entering the marketplace will be received in a very timely, very positive and very competitive way," said Furey.

At the heart of any new deal is the $2-billion transmission line. Among other things, the line would provide power to a nickel smelter expected to be built on the island by Inco.

Tobin has said he is seeking the federal government's help, and a source within the provincial government said today's announcement will include a commitment from Ottawa to at least formally explore the issue.

It could be a tough sell, however.

Some fear Newfoundland could be seen as getting more than its share of federal dollars, since it is also seeking continued aid for unemployed fishermen.

Added to that is a continued reluctance by government to invest in so-called megaprojects.

Adams said such an investment of federal tax dollars would be terrible and unnecessary because the island of Newfoundland has enough power sources without the underwater link.

"If the province was offered $2 billion for a transmission line or $1 billion for schools and hospitals, I'd take the $1 billion because it's worth more in cash than a transmission line," said Adams.

For Newfoundland, no economic study of a Lower Churchill deal would be complete without looking at the mistakes that were made negotiating the first project, located further upstream at Churchill Falls.

Under a deal signed in 1969 that did not include a price-escalation clause, Quebec continues to buy electricity at cheap prices and then sell it at a profit to the United States.

The issue has united Newfoundlanders in fierce patriotism as government after government tried and failed to renegotiate the deal.

Furey said this deal being negotiated must produce "unbalanced benefits" in favor of Newfoundland as compensation.

However, he added that both provincial economies will benefit from job creation and increased revenues.

Persona sold to Bragg

From the Nova Scotia Business Journal:

Bragg Communications Inc. and Persona Communications Corp. announced on Friday that a purchase and sale agreement has been signed which will result in Bragg Communications acquiring Persona.

With more than 260,000 customers, Persona provides communications services to customers throughout British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Québec and Newfoundland & Labrador.

Bragg Communications co-CEOs Dan McKeen and Lee Bragg expressed their enthusiasm in concluding this agreement. "This purchase represents an opportunity to significantly grow our business, to build upon our success as a telecommunications and entertainment company, and to work with the management and employees of Persona."

The transaction, according to the Friday press release, establishes Bragg Communications as the largest privately held cable and communications company in Canada, and the only cable provider operating systems in all 10 provinces.

The agreement to purchase the shares of Persona is subject to regulatory approval.

Persona is currently held by a consortium of private equity funds including HM Capital Partners, Birch Hill Equity Partners and CIBC Capital Partners. CIBC World Markets Inc. served as financial advisor to Persona.

Persona provides digital TV, hi-speed Internet and telecom services to residential and commercial customers in non-urban communities throughout British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Québec and Newfoundland & Labrador.

Financial terms of the agreement will not be disclosed.

The original release is here.

Newfoundlanders and Labradorians in need of self-esteem

It's not separation that we crave, but respect. Self-respect builds self-confidence, self-determination, and self-reliance, economically and socially.

Premier Danny Williams
speech to the Economic Club of Toronto
May 3, 2007

Apparently, Newfoundlanders and Labradorians are lacking self-respect.

To support the Premier's point of view, here is just a smattering of people who supposedly are seeking the ever illusive quality called self-esteem.

Debbie Hanlon, real estate entrepreneur

John Crosbie

Dr. Raymond Blake, historian, University of Saskatchewan

Dump Denis

First, there was the defence thing.

But this?

And yes, Inkless said it first.

Hearn's complete statement

Find it here, along with a link to the letter to Tom Rideout.

I am concerned about any proposed solution that would see major allocations in the hands of governments rather than in the hands of industry. If this were something that provincial governments and industry wished to consider, it would need to be done in consultation with all coastal provinces, and not as a special deal with one province.

Instead, my approach will enable us to achieve the right balance of allowing Newfoundland and Labrador companies to compete in an increasingly challenging international marketplace while ensuring fish are landed in our province.

Ultimately, this is about people. The lives of thousands of people and their communities have been put on hold for too long as they have waited for this issue to be resolved. As governments, we always need to remember that everything we do is about people, families, and communities.

-30-

Surprise: Hearn refuses to transfer quotas to provincial government

Federal fisheries minister Loyola Hearn's letter today to his provincial counterpart Tom Rideout, right, puts the blocks to the provincial government's plans to acquire - free of charge - groundfish licenses currently held by Fishery Products International (FPI).

Hearn said Thursday he would not agree to Newfoundland and Labrador's demand to take over the groundfish quotas from St. John's-based Fishery Products International, which has reached tentative agreements to sell its plants to two other companies.

"I have always stated that those who fish should hold the quota, not governments or anyone else," Hearn said

"In other words, those who run fishing enterprises, large or small, should not be subject to third parties telling them what to do."

The decision apparently came as something of a surprise to Rideout.

It shouldn't have.

A letter provided to media earlier this week - by Rideout or his office - made it clear that Hearn wanted to "ensure that the federal minister's discretion is not fettered" or perceived to be fettered and that Hearn was "concerned about any precedents that this may have for other fisheries."

What CBC news refers to as federal "conditions" on a quota transfer really don't appear as such. Rather they simply expressions that the federal government would wish to see the FPI matter resolved as quickly as possible, and that a solution to the current FPI problem would ensure, as CBC put it, that "landings stay in Newfoundland and Labrador and that the plan have endurance over time."

Rideout has never clearly explained the public policy behind putting groundfish quotas under control of the provincial government except to ensure that the provincial government could dictate where and how the fish were to be processed. it appears the goal was to enable the provincial minister to spread the quotas out and ensure as many fish plants were kept open as could be supported by the quotas, with the fishplant workers depending on a combination of work and federal employment insurance payments for income.

Under the Rideout scheme, highly lucrative shellfish quotas would stay with the companies purchasing FPI assets.

-30-

A tale of two vidies

Consider the youtube popularity of this video launching the province's awe-inspiring brand compared to this other video.

At time of posting, it was 2314 versus 9062.

-30-

Mercury astronaut Wally Schirra dies at age 84

Wally Schirra, the only astronaut to fly each of the first three American spacecraft died on Wednesday in California. [Photo, right: the-rocketman.com]

Shirra was the fifth American in space, piloting Sigma 7 , left, [Photo: NASA] on a six orbit flight that lasted nine hours. He also served as command pilot on Gemini 6 and on Apollo 7, the first orbital flight of the spacecraft that eventually took men to the moon.

Retiring from NASA and the United States Navy in 1969, Schirra had a successful career in business, finishing his life as a consultant.

Schirra launched a website, wallyshirra.com, in 2005.

-30-

Blind, deaf, mute and no sense of smell

I am amused by the Opposition House Leader’s newly-acquired sense of smell. We do not do things by smell over here; we do them the right way.

Natural resources minister Kathy Dunderdale,
on the Joan Cleary affair,
House of Assembly, 12 December 2006

The saga of Joan Cleary, untendered contracts at Bull Arm, her resignation, her $40,000 in severance and now her candidacy for the Progressive Conservative nomination in a provincial electoral district has gone through a bit of an evolution.

What happened depends on when you ask the question, apparently.

For example, try to figure out the circumstances surrounding Cleary's resignation from the patronage job.

Here's the version told last December 7 by Kathy Dunderdale, minister of natural resources:

Thank you, Mr. Speaker.

I will endeavour to find the answers to those questions.

Mr. Speaker, I have been providing information in this House since last Wednesday with regard to the security shed contract. I have maintained, and still maintain, that everything was done within the Public Tender Act, although there were two oversights, which we take very seriously. Because of the uncovering of those two oversights, I instructed my staff to review all recent contracts with the Bull Arm Corporation. As a result of that review, I have found an instance of where work was let at the site and the proper process was not followed, although, I have determined, to my satisfaction, that there was no intentional wrongdoing or political interference. This government is committed to transparency, accountability, openness, and we are fully committed to the Public Tender Act. As a result of the concerns that have been raised on this piece of work, I have asked for and received Ms Cleary’s resignation.

Note that last part. Dunderdale is clear. Let's skip the fact that she blurted out the de facto firing in the question, not as a news release or any other major statement.

Dunderdale's investigation turned up problems, so she asked for Cleary's resignation. Asked for it. That has implications for any severance. If a person resigns, there may or may not be severance, depending on the contract.

If someone is fired for cause, then there wouldn't be severance. And frankly, if your boss asks for your resignation, odds are good you are only a hair's breadth from being punted.

Fast forward to May and here's the story as told on Wednesday by intergovernmental affairs minister John Ottenheimer:

Mr. Speaker, yes, in accordance with the terms and provisions of an employment contract, Ms. Cleary is and was entitled to severance. It was done. It was clear, in accordance with the terms and the provisions of the contract, that she would be entitled to severance. There were some concerns, Mr. Speaker, at the time. Ms Cleary tendered her resignation. Her resignation was accepted by my colleague, who is in Houston today at an oil show. It was accepted by my colleague, the Minister of Natural Resources, and in accordance with the terms and provisions of an employment contract, severance was paid, as she was duly owed.

There's more than a little significance to the missing detail in Ottenheimer's version of events. Dunderdale asked Cleary to resign, at least according to Dunderdale's accounting, and there is no question that Dunderdale took the action as a result of what her officials found in a review of tendering practices at the Crown corporation.

Now, Cleary appears to have just tendered her resignation of her own volition. Of course there were "some concerns", as Ottenheimer soft peddles but those concerns were apparently not too significant, at least by the implication of how Ottenheimer put it.

Why is that important? Well, it may affect the entitlement to severance under the terms of Cleary's contract - if we could see the contract. It also minimises the magnitude of what occurred that triggered Cleary's departure. It would be very important politically for the government running Cleary as a candidate in the next election to downplay the episode or obscure the details.

And, ya know, it's not like they haven't done that before.

Take a look at Dunderdale's answer again.

The trigger for the resignation was "an instance of where work was let at the site and the proper process was not followed". Dunderdale assures us all of government's commitment to the Public Tender Act.

But it took five working days - indeed the next day the legislature sat for Dunderdale to spit out the full story:

Mr. Speaker, on Thursday of last week, we realized that there had not been any pubic call for bids, tenders, or Request for Proposals. That was a very serious situation outside the Public Tender Act. As a result, there were very serious actions taken.

A complete violation of the Public Tender Act. Work done without a contract, as it turned out, let alone a tender. Dunderdale admitted to the legislature that the work had been completed and government lawyers were then trying to write a contract with the company involved after the whole business was ended.

Bond Papers went through the whole sorry business when it occurred. There's a tick tock at the end of one post that traces the evolution of what Dunderdale admitted at what points in time on the Cleary affair.

The story as it finally emerged before Christmas was substantially different from what government disclosed at the outset.

And it is dramatically different than the apparently routine business Ottenheimer described in the House on Wednesday.

Of course, when you read all of the details, as admitted in the legislature over time, go back and consider the other comments Ottenheimer made about Cleary.

It would make one think that government actually does its business by smell. If something smells bad - as this entire Cleary affair does - then they assume the public are not merely without any sense of smell, but, as the phrase goes blind, deaf, and mute as well.

The only thing Mr. Ottenheimer and his colleagues should hope for is that Cleary is soundly defeated for the nomination. Only then will this be truly put to the end it deserves.

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Offshore drillers profits rise on demand surge

Operators of offshore drill rigs are reporting substantial increases in profit in the first quarter of 2007 based on surging demand for rigs.

Net income climbed to $553 million, or $1.84 a share, from $206 million, or 61 cents, a year earlier, Houston-based Transocean said today in a statement. Revenue jumped 63 percent to a record $1.33 billion.