Lower Churchill decision up in the air, indefinitely

The provincial government’s energy plan  - released in 2007 - committed to a sanction decision by 2009 and first power by 2015 but in an interview with the Telegram published in the Saturday edition, premier Danny Williams said he has no idea when he might be in a position to decide on whether the project goes or not.

Asked for a firm timeline on when the provincial government will decide how to move forward with the project, Williams said:

I can’t give you that.  That’s a question that I ask as well with NALCOR and we’re not there yet.

The Telegram story follows up on comments in Friday’s Telegraph-Journal by new Brunswick Premier Shawn Graham that the cost of Lower Churchill power is a factor in whether or not his provincial energy company will buy from the Lower Churchill .

The Telegram quotes New Brunswick energy minister Jack Keir:

My view would be: show us your business case.  Show us what it would be to get here and when that’s going to be…

It could be 10 years, it could be 15 years.  And maybe 16 cents at that point is a great number.  Who knows?

That’s the first time anyone has given any hint of the sort of prices NALCOR may have floated in talks with any potential power customer.  Williams told the Telegram that NALCOR has had preliminary talks with New Brunswick.

That’s also the first time that anyone has publicly acknowledged what many know privately, namely that the Lower Churchill is at least a decade or more away from construction and may well be held up even longer.

So much for juice by 2015.

Williams also confirmed to the Telegram that NALCOR isn’t ready to talk seriously about an energy sale from the Lower Churchill with any potential customers.

We can only sell that power when we’ve got it – when we’ve built the generation and built the transmission.

He admitted, for the first time, that the province’s energy company is still working on project cost estimates.  Power purchase agreements are crucial to securing enough financing for the $10 billion energy megaproject.

This information also confirms why NALCOR balked at making a firm commitment to run power through Quebec for the Lower Churchill.  If there is no project, then there’s no reason to commit provincial cash to building  billions of dollars in transmission lines or buying up space on the Quebec grid.

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Fact Check: CBC and political party leadership

In the House is not a home, former opposition leader Erik Neilson pointed out that the news media had a habit of calling him the interim leader. 

That is, of course, completely wrong:  Neilson was the opposition leader in the Commons, full stop.

Now cbc.ca/nl has pulled a similar gaffe:  “The [provincial Liberal] party hasn't had a full-time leader since the last provincial election in 2007.”

The Liberal Party has had a full-time leader since 2007.  The leader’s name is Yvonne Jones.

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Principal beneficiary

Newfoundland and Labrador’s royalty take from the offshore in 2009 (entirely based on 1985 Atlantic Accord and deals negotiated pre-2003): $1,826.3 million

Federal government take from Hibernia 8.5% share:  $107 million. 

That’s not bad for a bunch that supposedly couldn’t negotiate deals.

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Every nickel counts

Officially, the Old Man noticed the thousands of people affected by the nine-month old strike at Vale Inco.

So he calls his buddy the Premier of Ontario.

Danny of NewfoundlandLabrador and Dalton of Ontario are concerned.

"I am extremely concerned with the impact these strikes are having on the women and men employed by Vale Inco and their families during these frustrating labour disputes," said Premier Williams. "Both strikes have gone on far too long, and the impacts are truly devastating and can be felt throughout the communities involved. It is time for both parties to reach a fair deal for those involved so that the hard-working employees can finally return to work and resume their lives.

And that’s true.  It’s been tough.

A month ago, Kathy Dunderdale was in charge of the file.

Now the Old man Hisself has it.

Things must be bad.  Not just for thousands but for millions.

The Vale Inco strike continues to be a major kick in the financial ghoolies for the provincial government. And at a time when oil prices are heading down instead of the hoped-for up, every nickel counts.

Mining royalties for 2010 are already forecast to be half what they were in 2009 and about 20% of what the provincial government raked in during 2008. Dropping to $60 million from over $300 million in a couple of years isn’t financially pretty.

So while no one should doubt the Premiers’ sincerity and their concern for the families of the striking workers, not to mention all those who depend on the companies for business, the provincial governments have a pretty wicked financial stake in this one as well.

Maybe Danny will expropriate Vale Inco’s holdings in the province if they don’t comply with his demand to end the strike immediately.

According to him, it worked before.

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Are you smarter than a cheese grater?

You have to wonder sometimes how the province’s natural resources minister might fare if she had to go up against a crowd of fifth graders in the popular television game show.

Wednesday people were agog at her blinding ignorance about when the provincial government negotiated major offshore oil deals that delivered all the cash she and her colleagues have been spending the past seven years.

On Thursday, she pulled not one, not two, but three enormous gaffes at the same time in an exchange during Question Period:

Mr. Speaker, let me say it is very difficult to have a discussion with the Leader of the Opposition about responsibility for the environment when she demonstrated in the House earlier the week she does not even understand what level of government environmental responsibility for the offshore comes under. She was attributing to the Minister of Environment and Conservation, who has no responsibility beyond the high water mark.

It is really disturbing, Mr. Speaker, when it comes from a former Minister of Fisheries for the Government of Newfoundland and Labrador who should have understood that her responsibility did not go any further than that either as far as the offshore was concerned. [Emphasis added]

1.  The federal jurisdiction adjacent to coastal provinces is the low water mark, not the high water mark on the shore. 

2.  Of all the provincial governments in Canada bordering water only one has a jurisdiction which goes beyond the low water mark.  Hint:  It’s Newfoundland and Labrador.

Under the Terms of Union, and as affirmed by Supreme Court decisions on the offshore, the boundary of Newfoundland and Labrador extends out to sea a distance of three miles, the territorial sea recognised by international law in April 1949.

3.  Now that doesn’t mean the provincial fisheries minister can suddenly regulate cod stocks inside three miles.  The reason is that fisheries regulation is a federal responsibility.

But – and here’s where Dunderdale made her third gigantic shag-up – the conservation and environment minister can exercise her responsibilities out to three miles. Johnson can and certainly should take an interest in a variety of environmental issues related to offshore oil operations.  After all, the provincial government manages the offshore jointly with the federal government through the appropriately named Canada-Newfoundland and Labrador Offshore Petroleum Board.

The federal government may have the law-making power for the offshore but under the 1985 Atlantic Accord  - that is, the real Atlantic Accord - it has a right and responsibility to exercise co-management on behalf of the people of the province. Johnson and her officials can work with their colleagues on matters of local concern.  It isn’t just up to the feds, as Dunderdale seemed to be saying on Tuesday.

It is no surprise that the current administration lacks a fundamental understanding of the powers and responsibilities it does have under the land-mark 1985.  They demonstrated that ignorance before in the argument over unilateral changes to  Equalization offsets under the 1985 Accord. So profound is the ignorance of the current crowd on these subjects, by the way,  that no less a person than Witch-Hunt Willie Marshall  - he of the sooper sekrit investigations squad - made an oblique and derogatory remark during recent events marking the 25th anniversary of the Accord signing about his successors not understanding the powers they have.

Now to be fair, the average fifth grader anywhere in Canada isn’t likely to know these things about the local offshore oil business.

But then again, the person hand-picked by the Premier’s to sub for him when he is under anaesthesia is supposed to know these things. We’d imagine that the person the Old Man felt is the best one to tackle what is arguably the second most important portfolio in the provincial cabinet after health care, would display a much greater level of knowledge about the fundamentals of so important an issue as the offshore than Dunderdale has shown.

Dunderdale is surrounded by an army of bureaucrats and lawyers all of whom are supposed to know these things and who are obliged to keep her briefed.  Either they aren’t doing their job or Dunderdale just isn’t up to hers. 

Given her track record, from the Joan Cleary fiasco in 2006 through the Abitibi fiasco to this latest bundle, odds are good is isn’t the bureaucrats who are a wee bit slack in doing their jobs.

Nope.

It’s the Old Man’s choice who is slack in the jaw.

Of course, by extension, you’d have to wonder about the Old Man’s judgement on this and other similar choices.

But that’s another story.

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May 28 - fixed typos "grater' and fare", deleted a wayward period and added another one that went missing.

Williams to address Canadian Club in Ottawa

June 9 at the Chateau Laurier.

Topic: The Province We Are; The Province We Aspire To Be

Mel Gibson Update:  The World the Old Man Lives In is about to get weirder than usual.

One of the sponsors of the Premier’s luncheon speech in Ottawa will be none other than Ogilvy Renault.  Now for those who may have missed this little detail, OR is one of the law firms who’ve been helping the evil conspiracy – in this case fronted by AbitibiBowater – to thwart the aspirations of no less a personage than the Old Man Hisself.

Arguably, Ogilvy Renault is itself part of the gigantic, possibly global conspiracy centred in Quebec.

Now this should all make things very interesting if the Old Man’s speech includes his recently offered opinions about “Quebec lovers”. 

Incidentally, Ottawa news media may get hand-out copies of the speech.  But if they don’t, copies are available under the province’s Access to Information laws for a not so-nominal nominal fee.

According to a recent decision by the Premier’s Office, backed by the access commissioner, copies of speeches delivered publicly must be first read and redacted – you cannot make this stuff up -  with all the applicable charges for editing and deleting sections from speeches which were delivered in public.

One recent requestor found himself on the receiving end of an initial estimate of $10,000 for copies of the Premier’s public speeches since 2003.  Williams even bitched about the request during a scrum. And no, they aren’t available for free download from the government website.

Such is the World the Old Man Lives In.

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The Search for Meaning Challenge

In this case, the challenge is to find any place in either the official French or unofficial English versions of a recent decision by the Quebec energy regulator that says that NALCOR can’t wheel electricity through Quebec.

Anywhere.

Either language.

Or words that say the Regie turned down an application to wheel power through Quebec.

Bonus points if the person presenting the information works for the Canadian Broadcasting Corporation which persists in claiming that’s what the decision says.

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Make Shit Update (May 28):  CBC adds to the list of its unfounded claims with this one:

Nalcor, Newfoundland and Labrador's Crown-owned energy corporation, has been developing the $6.5-billion Lower Churchill project in central Labrador, but does not yet have a route to bring the energy to market.

There, in fact, two major routes.  The first is overland through Quebec.  it still exists, hasn’t been wiped off the map by anyone.  The second is the technically feasible but financially problematic route down through Newfoundland into Nova Scotia.

Within Quebec, there are at least five specific overland routes to five specific targets.  They are neatly listed in the Regie decision in both the English and French versions.

The problem for NALCOR isn’t a lack of routes to markets.

It’s a lack of markets.

So long. It’s been good to know you.

If Danny was sticking around, Steve likely wouldn’t be leaving.

When long-serving staffers take a hike from a political office it usually means others will follow, including the Old Man Hisself.

And when junior staffers get promoted to senior jobs, it’s the sign of an office not keen on renewal or reinvigoration.  Today’s announcement from the 8th floor screams of a crowd just killing time until the movers arrive.

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There’s crap. There’s bullshit…

And then there’s natural resources minister Kathy Dunderdale:

Mr. Speaker, when the members opposite sat over here they certainly had no expertise in developing deals, negotiating contracts, as we saw on a number of occasions in the fourteen years of their mandate.

Of course not, Kathy.

After all, Hibernia, Terra Nova and White Rose didn’t happen in those 14 years.

And they didn’t produce every single nickel of the billions that have raised the public treasury to unprecedented heights since 2003.

No.

And it’s not like those original deals not negotiated by Dunderdale’s boss will produce the bulk of the money she claims will come from Hisself’s efforts:

…three major oil deals that we have negotiated with a value to this Province over the life of those projects, Mr. Speaker, of $35 billion.

Let’s not even remind Kathy that the figure $35 billion is pure fabrication.

All Dunderdale did today in the legislature was confirm her profound, undeniable, astounding ignorance.

There’s no other word for it.

 

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Don’t mention the war

It could be an episode of Fawlty Towers.

Then again mentioning Germans and industrial development in Newfoundland and Labrador is more likely to conjure up images of the numerous colossal failures of the Valdmanis/Smallwood industrialization program from the 1950s.

The Germans are coming to central Newfoundland.

As natural resources minister Kathy Dunderdale told the House of Assembly on Tuesday:

I am happy to say that we have had an Expression of Interest from Germany last week, principals in, looking at what we have to offer in Central Newfoundland. We are very hopeful about that prospect, Mr. Speaker.

Well, maybe.

Outside the House, though, Dunderdale was somewhat less enthusiastic.  As the Telegram reported:

Outside the House, Dunderdale told reporters the company was a reputable pulp and paper company.

But she cautioned people in the province — especially those in central Newfoundland — not to get their hopes up.

Dunderdale said even though the company has seen the former mill and gotten some information about operating a pulp and paper operation in this province, it’s too early to tell if the company will submit a proposal to set up shop in the province.

That’s pretty much the state of things in central Newfoundland these days where the provincial government keeps insisting its expropriation of Abitibi assets was not a disaster yet has a hard time proving otherwise.

There are Germans coming but no one should count on them.

Such a bizarre concept:  perfidious Germans.

It’s like the shifting definition of “assets”.  In December 2008, the assets were the hydroelectric generating stations and the transmission lines.  The rights to the land and the timber leases all reverted back to the provincial government anyway once Abitibi stopped making paper.

Fast forward two years and the assets now include all the land.  As Danny Williams put it on Tuesday:

By way of example, and this is a very simple example, the land that we recovered, the land alone that we recovered for the people of Newfoundland and Labrador - forget the water rights, forget the timber rights - is three times the size of Prince Edward Island.

Of course, as Williams knows, the water rights and the timber rights  - as well as the mineral rights he didn’t mention – are what make the lands themselves valuable.  Their size is irrelevant.  The fact he is now citing them as assets to offset liabilities for environmental damages is likely to turn up being used by Abitibi’s smart lawyers to further demolish whatever defence Williams and his apparently not-quite-so-swift lawyers try to fend off Abitibi’s claims against the provincial government over the expropriation.

This danger – that his words will colour the legal action -  is something Williams is acutely aware of, of course, since just before he identified the land as an asset he cautioned New Democrat leader Lorraine Michael that “anything that I may say in answer to that question would only help the Abitibi case in the NAFTA dispute.”

So he carried on and gave them something just as juicy to use against him. 

This is the essence of this entire matter:  a hasty decision followed by bungling, then excuses and then unsubstantiated claims.  Laced through it all is the lecturing and condescension from the premier and his ministers.  none of that really comes off, of course, since the entire gaggle of them have shown they have a very tenuous grasp on most of the facts of these matters themselves.

Here one need look no farther than the hydroelectric assets which people have been led to believe have some means of generating cash for the provincial government or, more particularly, its energy company. 

Turns out that, as Dunderdale told a legislature budget committee recently, there isn’t enough demand on the island to warrant generating power from these hydro sites.  Meanwhile, on the island east of Sunnyside (on the Isthmus of Avalon), there is demand.  Unfortunately, the existing transmission lines are at capacity.  NALCOR has no plans to add more transmission capacity unless the Lower Churchill goes ahead.  As a result, the central Newfoundland hydro assets won;t be shunting power to Long harbour and the Vale Inco smelter. That is going to be powered by, among other things, the Holyrood thermal generating plant and its oil-fired generators.

So much for closing Holyrood as a public policy goal.

So much too for fears the hydro assets would benefit the whole province rather than keeping them tied to central Newfoundland.  Some people thought that the cash from the hydro power would be a nice nest egg for economic development. They were concerned about the benefits flowing outside the region.

Once upon a time, back before the rest of us learned of the mill expropriation fiasco, the provincial government refused to tie the hydro assets to local economic development funding in central Newfoundland. As industry minister Shawn Skinner put it:

“However, as with any investment, the collective impact on the province as a whole must be measured as these resources are provincially owned."

Well, now that everyone knows there really isn’t any use for the hydro facilities – and hence they have no revenue-generating ability at the moment – the provincial government is going back to its old line that the hydro assets will be used to lure potential new industries to the region.  As Dunderdale said in the House on Tuesday:

Mr. Speaker, we are not writing off Central Newfoundland. We may not have an industrial customer at the moment looking for that power, but that day will come, Mr. Speaker. When that day does come, we will have the assets to do something with, to drive economic development in that part of the Province, Mr. Speaker, once again.

Assets are not assets. 

Non-assets are, in fact, assets.

There are Germans, unnamed but apparently respectable, but they can’t be counted on to deliver the goods.

And we predicted everything but couldn’t predict disaster, which of course it isn’t because the current situation is the one we foresaw after examining all the potential outcomes, but we didn’t really foresee it at all. The whole thing is unfolding as we knew it would but in completely unpredicted ways. 

Just imagine the mess if we hadn’t done what we’d done to produce the mess in the first place.

And for God’s sake, don’t mention the war.

In next week’s episode, more hilarity ensues.

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Hail poetry, that heav’n-born pain

Christopher Lockett writes:

…all language is rhetorical. All language is designed to convince us of something. In moving from political oratory to poetry, I hoped to illustrate how that "something" is not necessarily specific, and can in fact possess a multiplicity of meanings—and [in?] that very multiplicity resides an exercise in reimagining the world.

That is the value, and necessity, of poetry to the contemporary moment: poetry is the antithesis of propaganda. The same can of course be said of literature more broadly, but poetry is the most overt expression of this principle….

How superbly put.

After all, what is life without a touch of poetry in it?

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That’s gotta hurt, too: oil prices edition

The provincial government’s 2010 budget – due to pass the House of Assembly by next Monday – is based, in part, on crude oil average about US$83 a barrel for the entire year.

Just to make sure everyone is keeping a sharp eye on the unsustainable Tory financial ball, the budget forecasts a cash deficit of about $1.0 billion. That would eat up just about all the surplus cash on hand.  As a result, the net debt, which was hidden from prying eyes by all the surplus cash would spring back into full view in all its $10 to $12 billion splendour.

And if the following year’s budget needed some propping up, the provincial government would be back in the markets looking for some bank will to see the public debt balloon even larger.

But oil is trading this past week down in the neighbourhood of US$70 an the dollar is still pretty close to par.  Production is slightly below last year’s so there doesn’t seem to be much hope extra production would generate extra cash.

Oil is now the major source of provincial government income by quite a margin.  It’s about twice the amount the government gets from federal transfers which  - when piled together is the next biggest source of income at about $1.2 billion.  Oil royalties, forecast at $2.1 billion is about two and a half what personal income tax, the next largest provincial government’s own revenue source, brings in.

There are a couple of things to take away from all this.

First of all, when Danny Williams talks about putting the province’s finances in order such that there is less dependence on Ottawa, he’s pretty much jerking everyone in the province around. 

Nothing – and let’s say that again for good measure – n-o-t-h-i-n-g, not a single, solitary, flipping thing Danny Williams and his cabinet have done in provincial government spending since 2003 has put the provincial government on a secure financial footing.  To the contrary, they have put the provincial government in an incredibly precarious financial position even compared to when they took office.

The facts on this speak eloquently for themselves in both the fragility of the economy and unsustainable level of public spending. When he announced in early March that balanced budgets were no longer a target for his administration he pretty much confirmed that none of his claims about sound fiscal management were close to being accurate.

Second of all, bear in mind if oil stays at current prices, the cash deficit is more likely than not going to be about $1.0 billion and we are yet again staring at the prospect of one of the largest if not the largest cash deficits in provincial history.

Put all the faith you want in people who forecast triple digit oil prices as the way of the future.   Oil is not going to be the saviour of this province if its government keeps spending the way it has been spending.

It’s that simple.

So as all things out there go sour for the current administration, as it faces the prospect of hundreds of millions of dollars in costs from the Abitibi expropriation fiasco, as investment interest in the province dries up, the parlous dependence of the provincial budget on oil prices just adds to the pressure.

Imagine what things will be like a year and a bit from now when voters troop to the polls.

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The Week’s Toppers: May 17-21

For those who missed them, here are the top 10 individual posts at Bond Papers for the past five days:

1. The World the Old Man Lives In (with larger picture) 
2. Reach for the Screech
3. Tail-gunner Bob:  equality is not a “realistic philosophy”
4. Protocols of the Elders of Laurentia
5. Cartoon U (might not be what you think it’s about, mainlanders)
6. Buchans Saga Deepens:  Johnson claims credit for Abitibi Work
7. All we want is fairity
8. The Old Man defines The Solution
9. Tie:  Resting on his laurels and hardys and Lower Churchill:  Imaginary Project. Imaginary news Stories.

Some of these were one day wonders.  Kevin O’Brien’s masterpiece of political hara kiri took  the idea of “fairity” to number one with a guffaw but that was just on the day it appeared.

Ditto Charlene Johnson and her nonsense about Buchans.

The Lower Churchill post – tied for number nine – is one that is still drawing hits a week or so after it first appeared.

This week, the Premier and his wing man managed to score a series of multi-day hits.  The Premier’s contemptible effort to scapegoat the people of an entire province and his despicable use of language in the process scored multiple hits over multiple days.

By far and away the biggest was the chart in “The World the Old Man Lives In”.  Sometimes things just line up right:  there was no way of knowing that was the day he would chose for his appalling display.  But it fit and it resonated with readers like very little else ever has.

Here’s the way your humble e-scribbler put it in a comment on one of the posts:

When political leaders attempt to smear entire groups of people based on their ethnicity or language, to use them as scapegoats then we are headed for a very dangerous place.

We have already seen too much of this sort of extremist language - "traitor" and "quisling" for example - over the past few years. Over the past couple of days the language has sunk to a whole new level particular in the extent of the scapegoating, the mocking use of French, and the claims about some gigantic ethnic conspiracy against people who live in this province.

Something say that people weren’t reading those posts because they agree with the Premier’s views.

Not to be outdone, the Premier’s parliamentary secretary went on a commie hunt during his speech on the budget.  Not to be limited, though, he also took the chance to let us all know that while equality is a nice idea, it just isn’t “realistic” in the society in which we live.

It’s a good thing that after seven years, Ridgeley finally gave us some insight into his own political philosophy.  It would be interesting to see him knocking doors in the next general election defending that idea, but your humble e-scribbler is going out on a limb here to predict that Tail-gunner Bob won’t be running again.

You have to wonder, though, if these two in their views – the Premier and his wingman – really do represent the views of Newfoundlanders and Labradorians, as the Premier once claimed?

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Cartoon U 4 – the fishery (part the second)

By the time this cartoon appeared, the thing was a full-blown scandal.

And…

Murphy had learned to draw Walter Carter so he didn’t look like Jim Morgan.

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Local company inks Latin America contract

The release:

The world's largest advertising database will now include data from 13 countries in Latin America as well as introduce global content to Latin America

St. Johns, NL (May 20, 2010) - Newfoundland-based Global Ad Source has signed a strategic agreement with IBOPE Media to launch and market a new portal including data from 13 Latin American countries. The Creativos Global portal will be a Spanish language interface to the Global Ad Source database and will be marketed to Latin American ad agencies and advertisers via IBOPE Media throughout the continent. The subscription based service will allow users to review metadata associated with global advertisements as well as access high-resolution version versions of the ads.
"We are very excited about our alliance with IBOPE Media. They are clearly the leader in the Latin American advertisement and media measurement services and have a fantastic roster of blue chip clients. We feel our unique content set will be well received by IBOPE clients and allow a deeper insight into global advertising and creative strategies," explained Ed Clarke, President of adfinitum, the developer of Global Ad Source.

"CreativosGlobal.com users will have access to over 7 million high resolution advertisements from over 50 countries. At our current rates we fully expect to surpass the 10 million ad mark by the end of this year. This content will enable users to research and plan with competitive marketing intelligence from all over the globe," added Clarke.

Additionally, IBOPE will offer through Global Ad Source, Latin American data to clients in Europe, North America and Asia. IBOPE's data currently includes over 100,000 ads and 5,000 new ads are expected to be uploaded monthly.

"This is another market driven action by IBOPE. Globally, companies are growing more and more interested in Latin America. Parallel to the recent economic growth in the region, both the FIFA World Cup and the Olympic games will be hosted in Brazil during this decade which always serves to create a bullish environment. We are also very excited about IBOPE being able to offer its clients a unique look into the global advertising trends." added Antonio Wanderley, Regional Director, Business Development, IBOPE Media.

Media contact:  Ed Clarke      Tel:   +1 709 753 1000  or +1 709 749 9928

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The Old Man defines The Solution

Hisself, on May 20, in the House of Assembly:

Quebec lovers, if we could only keep the Quebec lovers quiet, Mr. Speaker, it would be nice.

Such is The World the Old Man Lives In.

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Cartoon U 3 – the fishery (part the first)

Specifically a gear replacement program funded by the provincial government and used by many fishermen as a subsidy to help them upgrade their equipment.

Walter Carter, the newly-appointed fisheries minister, holds up a stinky left-over from his two predecessors, John Crosbie and Harold Collins.  All three men held the fisheries portfolio in succession in 1974.  It used to be an important department.

Children and those with very short-term memories will notice that in those days cabinet ministers could actually operate without instructions from the Old Man of the day.

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Fortis and Enel getting special treatment from Williams gov under expropriation bill

At least two of companies whose long-term power purchase agreements were ripped up under the December 2008 expropriation bill will still get all their cash under long-term power purchase arrangements, according to natural resources minister Kathy Dunderdale.

Abitibi is not included in the arrangements, apparently.

Dunderdale told the House of Assembly on Thursday that:

…we made a commitment to both of those companies [Fortis and ENEL] that regardless of what happened with Abitibi, at the end of this process we would ensure that they were kept whole, that they were properly compensated for fair market value for the assets. The PPAs that they have with Abitibi would also be honoured, Mr. Speaker.

Dunderdale said that the provincial government’s energy corporation  - NALCOR  - is still discussing arrangements with the two companies. The power purchase arrangements date from 1997 and 2001. The exact duration is currently unknown to your humble e-scribbler but would typically be in the range of 20 to 30 years.

ENEL partnered with Abitibi on the Star Lake project to supply electricity to Newfoundland and Labrador Hydro. Bill 75 seized all the generating and transmission assets of the Star Lake partnership and revoked all the agreement related to it, as listed at Annex E of Bill 75. 

Dunderdale made no reference to the other companies also affected by the seizure:

• Clarica
• Sun Life Assurance
• Mutual Life Assurance
• Standard Life Assurance, and
• Industrial Life Assurance.

Fortis – the other company Dunderdale discussed – was a partner in the Exploits Hydro Partnership.  Under a long-term power-purchase agreement, Exploits partnership sold power to Newfoundland and Labrador Hydro.

Dunderdale also admitted what Bond Papers readers already knew:  the provincial government is paying for a long-term loan for the Exploits partnership.  The outstanding balance on the loan is $59 million.  The provincial government paid the 2009 instalment.

The hydro-electric assets are likely the only ones seized in 2008 that could generate any reliable revenue to offset the costs of environmental clean-up at former Abitibi sites in the province.  Payment of loans and royalties to the companies other than Abitibi as if the expropriation never happened would significantly reduce any revenue NALCOR could gain from the assets.

Dunderdale’s admission today could also further undermine any legal cases the provincial government is pursuing.  One of the problems government faced in recent Quebec court decisions on the Abitibi bankruptcy protection proceedings is that its environmental clean-up actions appeared to be aimed solely at Abitibi and were not part of the routine administration of provincial environmental laws.

Dunderdale’s admission makes it pretty clear that the government is treating some of the companies affected by the expropriation very differently from Abitibi.

Colouring the expropriation as aimed solely against Abitibi could also colour the move and undermine any defence of Abitibi’s NAFTA challenge.

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Special oversight for deep water drilling offshore Newfoundland and Labrador

From the Canada-Newfoundland and Labrador Offshore Regulatory Board:

“It is prudent practice for a regulator to conduct an internal review following an incident like the one in the Gulf of Mexico to determine if more can be done from an oversight perspective to address concerns about the risks of offshore drilling. Chevron’s plan to drill the Lona O-55 exploration well in the Orphan Basin, which was spudded on May 10, 2010, has undergone two levels of environmental assessment in accordance with C-NLOPB’s requirements and the company has met the regulatory requirements for drilling in the Newfoundland and Labrador Offshore Area. However, in light of the situation unfolding in the Gulf of Mexico and heightened public concern over drilling operations currently underway in the Newfoundland and Labrador Offshore Area, the C-NLOPB has taken the following measures for overseeing well operations at Chevron’s Lona O-55 well. We have met with Chevron in St. John’s and advised them of these measures, which are in addition to requirements contained in the Drilling and Production regulations and associated guidelines. Chevron has confirmed that they will facilitate the C-NLOPB’s oversight.

A team has been established within the C-NLOPB to provide regulatory oversight of Chevron’s operations. This team is comprised of the Chief Safety Officer, the Chief Conservation Officer, members of the Board’s Management Team and selected senior staff with extensive experience in the regulatory oversight of drilling programs. Chevron is expected to ensure the timely posting of daily reports (seven days a week) so that up-to-date information is always available to this team.

Chevron is required to meet with the C-NLOPB’s oversight team every two weeks to review matters of interest. The Board’s Chief Safety Officer will chair these meetings.

Chevron is required to provide the C-NLOPB’s Well Operations Engineer with copies of the field reports prepared in respect of the following: testing of the blowout preventer (BOP) stack; function test of the acoustic control system; function test of the Remotely Operated Vehicle (ROV) intervention capability and function test of the automode function (AMF) system, together with an assessment of the readiness of the ROV system in terms of equipment, procedures and spare parts.

Chevron is expected to monitor developments at the Deepwater Horizon incident and provide periodic assessments on the impact of any lessons learned from that situation to operations at Lona O-55, in particular any lessons learned with respect to well operations, BOP equipment or spill response readiness.

The frequency of audits and inspections onboard the Stena Carron will be approximately every three to four weeks. Normally, audits and inspections are conducted on offshore operators every 3-4 months.

Prior to penetrating any of the targets, Chevron must hold an operations time-out to review and verify, to the satisfaction of the Chief Safety Officer and the Chief Conservation Officer, that all appropriate equipment, systems and procedures are in place to allow operations to proceed safely and without polluting the environment.

Prior to penetrating any of the targets, Chevron should assure itself and the C-NLOPB that all personnel and equipment for spill response identified in its oil spill contingency plan are available for rapid deployment.

Chevron must also make arrangements for a representative of the C-NLOPB to be onboard the Stena Carron to observe the cementing operations of the last casing string set prior to entering any target zones. The observer will also be present to witness the BOP testing, well control drills, and results of the pressure test of the cementing job.

In the case of the BOP testing, a representative of the Certifying Authority will also be present.

In due course, Chevron must provide, for review and assessment by the C-NLOPB’s oversight team, a copy of the proposed well termination program to be issued to field personnel for implementation.

Chevron must also make the necessary arrangements for a representative of the

C-NLOPB to be onboard the Stena Carron to observe the well termination program.”

-srbp-

The Protocols of the Elders of Laurentia

In Hisself’s own words, in the House of Assembly, dutifully and accurately recorded by Hansard, the Old Man describes the nefarious forces that circle around him.

In response to this question about the Abitibi expropriation  - “Are you planning to seek leave to appeal this court loss to the Supreme Court of Canada at this time?” – he begins:

Mr. Speaker, let’s do a little history lesson first of all, and what this is all about. This goes back to the late 1960s when we had the best project in the world that we wanted to develop but we could not do it on our own because we were a poor Province - because of what happened as a result of Confederation and everything else. We were the poor and the weak sisters of Canada. So, we basically entered into a partnership with Quebec in order to develop that particular project. For that, they acquired at least one-third of the company which developed that particular project.

Then, when it got down to the short strokes and we were months away from concluding it and we were out of money, the company was basically out of money, they squeezed us. That is when they squeezed us for another twenty-five years on a contract that already was a complete giveaway of a very valuable hydro resource. They squeezed us for another twenty-five years at a lower price -

So based on that history, Newfoundlanders and Labradorians, particularly this Newfoundlander and Labradorian, and all these Newfoundlanders and Labradorians here and all the people in this Province, feel very, very strongly about the way Quebec has treated us. So if we have to fight them in the courts or fight them at the Régie, or if I personally got to get down and go toe to toe or roll around on the ground with them to fight them, we will do it.

…

And then after discussing Churchill Falls for all that time he answered the Abitibi question:

…we are now reviewing it.

But he couldn’t just state that simple answer to a simple question without further embellishment:

We are looking at asking for leave to appeal to the Supreme Court of Canada. I think that, as a Province, we have to keep fighting Quebec because if we don’t they will take away everything we have.

In response to the second, simple question - What is the recourse for the Province to now be added to the list of unsecured creditors? – came a further rant:

Of course, what we are dealing with is obviously a very biased court.

When you look at the Quebec courts, you look at the decision that was given here. The opinion, of course, that we have from our solicitors on this is that the court dodged a central legal and policy issue. So we had constitutional and factual arguments and the Court of Appeal completely and totally avoided that. In addition, they completely ignored the same rationale which has been used by the Ontario Court of Appeal, B.C. Court of Appeal, the Alberta Court of Appeal, and the Supreme Court of Canada. So, basically, these courts are doing whatever they can to try and stop us.

The same thing with Judge Gascon, we just saw the Régie ruling which came out of Quebec, which is one of the most horrendous, absurd rulings that I have ever seen. They ignored facts. They said that what Hydro-Quebec was doing was discretionary. They ignored the evidence - a complete abuse of process. So, throughout this process we will just keep hammering away.

Yes, folks, there was a duplicate key to the wardroom icebox where they kept the  strawberry ice cream.  The only thing missing was the ball bearings in his hand.

At that point, opposition leader Yvonne Jones asked exactly the same question over again (The Old Man didn’t come close to answering it the first time, after all).  There followed another diatribe in which the Premier noted the holding company set up to deal with the two properties the provincial government didn’t expropriate:

Instead, Mr. Speaker - if I may have a moment -of what they have done in Botwood and Stephenville, put those assets in a shell company so that they could go bankrupt so that we get nothing.

Not exactly what happened, nor does the Premier explain why his lawyers consented to the arrangement, but that’s another issue.

At that point, the question of costs deflected off to justice minister Felix Collins.

A question about an English translation of the decision by the Quebec energy regulator brought Hisself to his feet once more to fulminate about Quebec:

Mr. Speaker, I said it last week, and I can say it again in all honesty today, I have not seen an English copy of the Régie decision. We are waiting on the Régie to provide us with an English copy.

It is really interesting, too, when you go on their Web site, pretty well everything that they have is always in English and French, but on this particular one we have not been provided an English copy. That tells me a lot about the Régie, the attitude of Quebec against Newfoundland and Labrador.

Basically, while the Premier’s parliamentary assistant is on a hunt for Commies, the Premier himself is fighting against the evil machinations of the seething nest of anti-Newfoundland conspiracy that is Quebec.

To conclude, some simple observations:

• The chart was not an exaggeration, as anyone can plainly see. The World the Old Man Lives In is populated by enemies everywhere, linked together by secret ties.
• This is not the way Danny Williams felt for the five years he tried  - entirely out of the public eye, one might add - to interest Hydro Quebec in taking an ownership stake in the Lower Churchill, without any redress for the 1969 contract.

You could not make this stuff up if you tried.

-srbp-