Hebron benefits less than touted #nlpoli

The companies developing the Hebron oil field offshore Newfoundland and Labrador won’t be doing as much of the construction work in the province as some people might have believed.

According to the Telegram, Kiewit’s yard ay Marystown “is being looked at” to build the drilling support module, the accommodation module is supposed to go to Bull Arm, but a third module that could be built here is looking doubtful.

And as the news starts to mount that maybe the local benefits from Hebron are a lot less than some people believed, you should remember the golden words as they slipped so effortlessly from Hisself’s golden tongue:

… this agreement reflects our resolute determination to maximize the benefits that Newfoundland and Labrador receives from the development of all our resources.

Surely Hisself would not have said it were it not so.

But as it turns out he did and it wasn’t.

And what of Hisself’s former shield maiden in the fight to maximise benefits?  What did she say of the August agreement?

Kathy Dunderdale talked of unprecedented local industrial commitments and “ maximizing industrial benefits.” 

Surely she would not have said it, were it not so.

But it turns out she did and it wasn’t.

They both talked about the “co-venturers”, a wonderful bit of spin-speak about the companies who would develop the project and decide where the work would go.

One of those “co-venturers” is – of course – the provincial government’s own energy company.  that’s what the Hebron racket was really all about, as it turns out.

People should take another look at the Hebron agreement.  Well, at least the limited bits that have been made public. They should check the bits with the little stars by them in the news release issued by one of the co-venturers.

Then look again at what one of the co-venturers told us about maximising benefits and ‘unprecedented local commitments.

And then see if there’s a sale on salt down at Dominion because The Lord Hisself knows you’ll be taking every one of those rosy promises with as much Sifto as you can choke down.

There is the public interest and there is the interest of the oil companies.

The Hebron development agreement signed in 2008 turns out to be a very good example of what happens when the political party elected to protect the public interest deliberately and consciously places itself in a conflict of interest with its desire to run an oil company.

One of the interests will lose.

- srbp -

Suck it up, buttercup #nlpoli

Ocean Choice international is a local fishing company.  The key players in the company are from the Sullivan family.

You will recall one member of the family -  Loyola  - was a key cabinet minister in the Tory administration that started in office in 2003.  He is now used to be a federal fisheries ambassador.

Another offshoot of the family served as chief of staff to Tom Rideout – right, exactly as illustrated -  for the 43 days the fellow was premier.

Ocean Choice International, as a company, profited hugely while Tom was fisheries minister under Danny Williams.  The provincial government interfered left, right and centre in the fishing industry.  Rideout seemed to have it as a personal mission to torture one company - Fishery Products International  - to death. 

Rideout ranted about the company in every venue he could find .  Danny Williams joined in the assault.  Rideout started a prosecution against the company for supposed illegal export of fish from its Marystown plant for processing overseas. 

Williams and Rideout pushed changes to the law governing FPI through the House of Assembly to make running the company much more difficult than it already was given the unwarranted political attacks Williams, Rideout and the rest of the Tory administration waged against the locally-based international fishing company.

Ultimately, Rideout and Williams succeeded in smashing FPI to bits.

The profitable stuff, like the FPI brands, the marketing arm and an overseas subsidiary wound up going to fishing companies outside the province.

OCI scooped up a bunch of fish plants, some other odds and ends and the FPI headquarters Building in St. John’s with its large, beautiful boardroom.  OCI sold the building very shortly afterward. 

As the Telegram reported at the time:

According to a conveyance filed at the registry, OCI got $3.335 million for the building, located at 70 O'Leary Ave. in St. John's.

The buyer is Deacon Investments Ltd., whose sole director is local businessman Dean MacDonald.

OCI’s Martin Sullivan spoke to a board of trade luncheon on Tuesday.  Sullivan whined and moaned about the state of the province’s fisheries.  He bawled especially big tears over the heavy hand of government interference.

According to the Telegram’s account of the speech, “Sullivan pointed to yellowtail as an example” of the problems with government interference in processing and marketing.

This is an especially rich moment.  processing yellowtail flounder in China was a key part of Rideout’s ongoing persecution of FPI.  Ocean Choice and the Sullivans swooped in to take up the bits of FPI Rideout shook loose. 

A couple of years later Sullivan and OCI found themselves in exactly the same place FPI was. The provincial government is shagging around with the company over the exports yet again. 

No one should shed any tears over OCI’s current predicament.   They who live by the unholy sword of government interference can’t really expect sympathy when they start getting the same shaft right up to the hilt.

People like Sullivan who represent the fishery of the past ought not to have any say in determining the fishery of the future.  That is, not unless Martin and his friends are willing to compensate the public treasury for the occasions when they profited from the interference he now bitches about.

Otherwise, Sullivan and his compatriots and just suck it up and leave the future of the fishery to other people who have an ounce of credibility.

- srbp -

Related:  Liberal fisheries critic Jim Bennett wants equal time at the board of trade to rebut Sullivan largely with a dose of the same thinking that helped create the current mess.

What the crowd at the board of trade – proponents of the Maximum Government Interference school of free enterprise thinking – have already heard it all before.

What the board of trade could use is a dose of some original ideas, even if they wouldn’t like them.  That’s the only way we might build a successful fishery of the future.

Hebron Development Public Review – quick thoughts #nlpoli

The commission appointed to review the Hebron development application to the offshore regulatory started public hearings in St. John’s this week.

Most of the submissions are available on line.  They are a study in contrasts.

The City of St. John’s, awash in oil cash from the industry directly or via the provincial government, had probably one of the lightest and most superficial presentations anyone could make.

Their Earth-shattering observations:

• Mechanisms for ongoing exchange of current,  relevant information, as well as forecasts, would be advantageous.
• Benefits from previous projects have been considerable and extensive.
• It is important to work together and engage groups as we move forward to realize the many benefits that can be incurred and ensure a legacy for the future.

Lightweight, superficial, motherhood, apple pie, the flag and any other moth-eaten cliché.

The second bullet is a remarkable about-face for a city that waged political war against previous development agreements based entirely on what was – to be sure – partisan bullshit.

There’s an interesting contrast between the Board of Trade presentation and comments by NOIA, the offshore suppliers association.

The Board of Trade argues that one of the the real legacies of Hebron will be knowledge transfer and the development of a strong cadre of local companies that can compete globally for oil and gas work.

Each individual project gets us closer to a sustainable
oil industry in which we achieve benefits that extend  beyond any one project. Skills can be exported to other harsh environments, like the Arctic, which might provide more opportunities in the near future. Experience can be applied to building new industries that will provide employment and wealth creation after the oil runs out. Improvements can be made in how we do business so
that we are a sought after place for future investment and growth.

That is the potential project legacy if we make the right choices and investments.

But NOIA is complaining that the Hebron benefits agreement isn’t delivering as promised:

The Hebron benefits plan adds requirements that are beyond the scale of the current capacity of the local supply and service sector.  The use of the phrase “globally competitive” throughout the benefits plan sets a standard that a small, young industry like ours will
struggle to reach in its present state. In NOIA’s view, the proponent should focus efforts on advancing the local industry toward global competitiveness, rather than make it a condition of local participation in the Hebron project.

NOIA members expect each new project to “raise the bar” on local content and participation at all levels of development and operations – not just increase the person hours of work achieved.  We want to see an increase in the level of specialized work, technology transfer and expertise gained.

That’s actually not surprising.  When the provincial government unveiled the memorandum of understanding and then the final agreements, a number of local observers privately noted that the local guaranteed work components were things the province would get anyway.  Beyond that, the work was relatively unsophisticated work scarcely more advanced than the stuff they did on Hibernia 15 years ago.  What’s worse, other components that could have been developed here wound up going off to other places.

As it appears the provincial government fought hard to get a few things for itself – like an equity position – and left the other local benefits slide.  That’s a very significant departure from the standards set by the development agreements signed before 2003. Those would be the ones the City of St. John’s now praises.

If NOIA’s contention is true, incidentally, that basically means the provincial government oil policy has shifted radically under the Conservatives. As SRBP noted in 2006:

The Wells administration's 1992 Strategic Economic Plan, by contrast, emphasized government policy aimed at strengthening the private sector, diversifying the economy and increasing the ability of local companies, including in the oil and gas sector, to compete effectively on a global basis. Crown corporations were sold off or shut down.

…

Williams' new Hydro corporation returns to an older model based on government subsidy and government dependence. Beyond the attractiveness to some businesses of relying on whatever contracts they can secure from the new Hydro corporation, the political and financial muscle of the state-owned company will likely make it considerably more attractive an investment than a private sector venture, since it will always carry with it a government guarantee of its operations and expenditures. The end result will almost inevitably be a weakening of the local private sector.

 

- srbp -

Bedtime for Bozo…errr… Bonzo…errr…Rob #cdnpoli

- srbp -

A chance. A choice. #nlpoli #cdnpoli

Original idea comparing a Canadian political party to a hockey team, but Andrew Coyne’s metaphor for the problems confronting the federal Liberal Party works.

The Liberals think of themselves like a hockey team:

It has won several Stanley Cups in a row, but by the last of those cups, it was relying on a clutch of 43-year-old veterans. With their retirement, the team has no option but to spend a few seasons in the basement, rebuilding. If it learns patience, while the draft picks mature and the losses mount, the team may in time become a winner again. If it does not, it becomes the Leafs

The current state of the federal party mirrors that of the provincial one in Newfoundland and Labrador.

Not surprisingly on any level Coyne states more simply and eloquently what your humble e-scribbler observed about the provincial Liberal crowd back in October.

Your humble e-scribbler:

To get at the Liberal problem, you’ve got to get even more basic.  When people say the Liberal Party doesn’t speak to people any more what that means is that the party no longer gives people a reason to support it.

If they want their party to survive in the future, Liberals have to figure out why anyone should care about the Liberal Party.  It's a simple enough thing to state. The answer isn't implicit in it.  And it goes to the heart of what any political party is about:

Why should anyone care?

Coyne:

If it is no longer the party of power, then it will have to spend some time redefining itself. In ideological terms, this means sharpening the definition. The vagueness that sufficed so long as power was in view will no longer. So the first question Liberals will have to ask is: why? Why be a Liberal, and not a member of some other party?

Coyne’s advice is that the federal Liberals should be “the party that tells it like it is”:

The Liberals, …, can instead be the bold party, the party that takes the principled stands that other parties won’t. On occasion this will take them to the left; on others, to the right.

Coyne offers sound advice.  Having a political party that speaks plainly about any subject would be such a radical departure from the pre-packaged pablum of present day politics that the Liberals would instantly stand out. 

In Newfoundland and Labrador, the same thing could work.  All three political parties say the same thing.  Just take a look at the political panels on CBC’s On Point.  Really listen to the comments.  Get beyond the superficial jabs and pokes and you will be amazed at how often the New Democrats and Conservatives say the same thing or the Liberals agree with one or the other party or sometimes both. 

Refreshing is not a word anyone would associate with any political party in Canada at the moment. Coyne is suggesting the federal Liberals give it a try.

The provincial Liberals could do that as well.  But the situation here is far worse.  The provincial Liberals not only do not seem to grasp the implications of their situation, they don’t even seem to realise they are in a situation at all.

- srbp -

The Zazzy Substitution, political version #nlpoli

There’s the American presidential way:

President Josiah Bartlet:  You got a best friend?
Agriculture Secretary: Yes, sir.
President Josiah Bartlet: Is he smarter than you?
AS: Yes, sir.
President Josiah Bartlet: Would you trust him with your life?
AS: Yes, sir.
President Josiah Bartlet: That's your Chief of Staff.

In any political office, the chief of staff position is one of the lynchpins of the whole operation.  The person in the job needs bags of policy and political experience, judgment and a whole host of other qualities.  One of the big ones is a special, personal relationship with the party leader or the politico for whom he or she works.

That’s why the West Wing writers had Bartlet talk about the chief of staff to the president as his smarter best friend who the president would trust with his life.  Odds are the president’s friends are every bit as capable as he or she is.

So when you need a person with all those qualities and a whole bunch more besides, you would expect an organization to go out and find the specific person for the job that they need, the sort of quiet, low-key head hunting for the sort of senior executive plus a whole lot more that the job requires.

Or you can just place an ad in the newspaper, like the Liberals have done for their office.

Wanted:  One Chief of Staff.

Note one of the qualifications is the need for political “savvy”.  That sounds suspiciously like what Sheldon named one of his cats after he broke up with Amy Farrah Fowler.

Finding a chief of staff for the official opposition should be a big deal for the Liberals.  In the ordinary course of things, the chief of staff in the opposition office would be the potential chief of staff to the premier. The job requires extraordinary judgment and an extraordinarily close relationship with the Leader, to whom the chief is the single most important advisor.  The chief of staff can also be a key source of stability for the staff and even for new politicians who are unfamiliar with their jobs and the demands of their new world.  The chief of staff can provide direction for the whole organization. 

Bear that bit in mind when you look back on the past eight years.  The Liberals haven’t had anyone doing the chief of staff job or even anything vaguely like it – despite claims to the contrary - since they went to the opposition benches in 2003. The absence of an experienced and capable chief of staff didn’t help in the first period in opposition. 

After 2007, the Liberals decided not to fully staff the office at the senior level, again.  That created yet another source of instability in a caucus that proved to be largely devoid of direction and a party leadership that wasn’t any better.

And so in 2011, the Liberals are in no better shape. The party fill-in leader is waiting for his replacement to show up.  The leader he replaced, who has become the interim opposition leader – yet again – is waiting for her fill-in to fill-in. 

Meanwhile the executive board seems to be trying to figure out how long they can dither and delay making a decision on leadership.  Perhaps they are hoping that the caucus leader – Dwight Ball seems to be lined up for Opposition Leader -  could be named party leader, thereby avoiding any sort of leadership contest at all.

By the time they sort that out, Ball could well inherit not a staff of his choosing, but rather a bunch of people selected for him by others who may or may not know what should be going on.  Rather than hunt for the right person, the Liberals have decided to let people select themselves for the job.

The future leader’s fate  - whoever it may be - is sealed no matter what happens now. The Liberals have to pick one of the people who sends in a resume even if none of them is suitable, let alone qualified.  To do anything else would leave the party open to the same embarrassing, silly, public display that took place last year when some other party loyalist didn’t get the job to which he felt he was entitled.  Imagine what the racket over the erstwhile premier’s chief of staff job would look like.

Of course, the real message in this job competition is even more stark:  the Liberals have told the universe that they are not thinking for a second about rebuilding or the future or anything so grand.  They just want to flesh out the staff chart or hire on a defeated candidate who needs a job.

What the Liberals are doing today virtually guarantees that in 2015 they won’t be a political factor at all.

- srbp -

Inadvertent fiscal black humour

There’s something truly frightening listening to politicians and former politicians discussing the provincial government’s supposed plans to apply a surplus in the current fiscal year to the provincial debt.

They aren’t doing it.

Full stop.

The provincial government is not using any of the surplus to reduce actual government debt.

And if that wasn’t all bad enough, you get three panelists on CBC’s On Point – starting with Lana Payne  - talking about the need to have an “adult conversation” about the provincial debt and public spending. You cannot have an adult conversation about anything when the conversation is essentially based on fiction.  All six political panelists on the show had their own particular fictions they spouted.

Payne then demonstrated how hard it is to have such an informed conversation.  She justified the unsustainable increases in public spending and growth in the public service over the past seven years using the Tory lie about “catch-up”.  Then for good measure she promised that labour unions will resist any financial restraint in the public sector.

For the hat trick of dark humour, go back to last week’s financial update. Finance minister Tom Marshall said that we “need to start the debate around where Newfoundland and Labrador sees itself 10 to 20 years from now.

Too late.

Tom and his colleagues have already made that decision with Muskrat Falls.

The only discussion left to have is how future provincial governments will cope with the mess Tom and his pals have created.

- srbp -

Traffic for the New Dawn #nlpoli

1. Nalcor’s own studies back NG as Muskrat alternative
2. Quebec adds 300 MW of wind
3. Free advice
4. Court docket now online
5. One statement, three stories
6. The Truth Deficit
7. Typical
8. Economy to slow down?
9. Unseen wounds are no less real
10. Vote SRBP as best political blog in Canada

- srbp -

Fooled him, too, did they? #nlpoli

Celebrity economist Wade Locke thinks it’s just great that the provincial government is going to use any surplus on its current budget to pay down debt.

As he told the Telegram:

Putting it towards debt was the best thing, I think, you could do.

Too bad for Wade that he is praising them for something they aren’t doing.

Wade did have some comment about spending the cash:

Spending it would be wrong and it would create more problems in the future.

Wow.

Two for two in one quote.

Wade’s on a roll.

Hang on.  Wade did the hat trick:

“You still have to, when you’re doing your budgetary stuff, think about what is the long-term focus you want to have. What are your priorities?” Locke said Thursday. “We haven’t had that discussion, and I don’t think the government has had that discussion either.”

Of course, they’ve had the discussion, Wade, old man.

They had and then they had their decision ratified in the recent election, or so they thought.

Their priority is Muskrat Falls.

Wade can’t comment on that, though just like he wouldn’t comment on it when he made his earlier comments about the coming debt crisis.

Wade, you see, has done some consulting work on the project. That’s why he left it out of his debt analysis.

Maybe you should read Wade’s comments again about what a good idea it is to pay down debt.

But this time take an extra pinch of salt beforehand.

- srbp -

Pick an answer, any answer. #nlpoli

Tom Marshall can’t seem to make up his mind whether oil prices are easy to forecast or tough to figure out.

On Thursday, he seemed to tell the St. John’s Morning Show host Anthony Germain that figuring out what oil prices will be in the future is pretty much a blind guessing game. 

Prices could go up. 

Or as Tom joked, they could go down too.

Yep.

And if you think that’s bad, labradore noted Tom’s problem extends to  forecasting what his view was on forecasting oil prices.

- srbp -

The Truth Deficit #nlpoli

Tom Marshall made the rounds on Thursday talking up his latest financial update.

But after a call to Randy Simms on Open Line, Marshall likely felt likely he’d gone a few rounds in the ring.  Simms asked a few sharp questions rather than let Tom ramble on with his usual shite.  And in asking a few simple questions, Simms just had to sit there and listen as Tom tied himself in contradictory knots. Tom’s been in the state before – like on Muskrat Falls and Bay d’Espoir – but this time Randy wasn’t letting up on him.

Things started badly for Tom when he had to explain right off the bat that all his bullshit on Wednesday about applying the surplus to the net debt was, not to put a fine point on it, just bullshit. No surprise for regular readers of these e-scribbles as Tom explained that net debt is just a calculation of assets and liabilities.

When Randy pressed Tom on what the provincial government will actually do with the cash, Marshall said they’d be spending it on capital works rather than borrow, as planned.  Fair enough, but then he noted that the provincial government hasn’t borrowed for capital works in years.  Tom wound up going around and around before it became clear that his talk about using the cash to avoid borrowing was not what Tom was trying to make it out to be.

It was, in fact, far less.

To get a sense of what might have buggered up the finance minister, take a look at the Estimates. That’s the budget document that lays out the proposed spending on day-to-day operations and capital works for 2011.

And just so that everyone is on the same page with this, understand that Tom the Finance Minister reports the Estimates on what is called a cash basis while the budget speech and the financial update use accrual accounting.

One big difference in how the two different methods show the government’s financial performance comes right up in the front of the Estimates. 

In the budget speech, Tom Marshall talked about a $59 million surplus. What you can see in Statement 1 of the Estimates is a deficit of about $769 million.  In other words, when the finance department looked at the actual cash it would receive in 2011 and the bills it would pay, the government planned to spend $769 million more than it would actually take in.

The only way they’d make that up is to borrow cash.  Normally, governments would have to go to the bond markets or the banks and borrow the cash.

Over the past few years, the provincial government here has managed to pile up a couple of billions dollars or more in cash and short-term investments. Rather than borrow from the bank, they’ve covered off cash deficits by taking the money out of that pile of cash.

It’s still borrowing, of course, even though it would never get repaid.

And last spring, that’s what Tom Marshall planned to do:  borrow cash to cover a deficit.  He and his colleagues planned to overspend and they planned to borrow cash from every person in the province to pay for it.

When Marshall announced in May that the surplus would grow to $200 million, that was on the same accrual basis as the $59 million.

But on the cash basis, the deficit would have only dropped from the $769 million Marshall planned for down to a little over $500 million.

But it was still a deficit.

A real deficit.

And Marshall would have had to take a wad of cash from the piles hidden under his mattress to cover it off.

So now that Tom has boosted the accrual surplus to $755 million, some of you might be already leaping ahead.

Yes.

That’s right.

And for the rest of you who resisted jumping ahead, understand that if the new revenue projections hold, Tom Marshall will likely still have to borrow some cash to cover it off.  Another $755 million in cash would leave him short about $14 million on that $769 million deficit in the Estimates.

So that borrowing Tom talked about with Randy Simms likely wasn’t about capital works spending.  It was likely the borrowing in the Estimates.

When it comes to provincial finances since 2003, about the only surplus there’s been has been bullshit flowing from the provincial government’s spin machine.  The latest update is no different.

The provincial government’s financial truth deficit, on the other hand, continues to grow. 

- srbp -

Unseen wounds are no less real

Two new studies of Canadian soldiers who served in Afghanistan between 2001 and 2008 shows the prevalence of psychological casualties in modern combat operations.  The Globe and Mail reported that:

In one study of 792 frontline soldiers who fought in Afghanistan in 2007, some 20 per cent suffered from posttraumatic stress disorder, while 3.1 per cent suffered other mental illnesses such as depression.

In a larger national study, researchers examined medical records of 2,045 soldiers who served from 2001 to 2008 and found 8 per cent suffered from posttraumatic stress disorder and another 5.2 per cent suffered other mental-health illnesses over a follow-up period averaging five years. (Globe and Mail)

The studies also found that 98% of those experiencing symptoms had sought and received treatment. 

Things have changed radically since the first deployments to the former Yugoslavia almost 20 years ago.  But psychological casualties still turn up, even from older operations.  As the Globe story also noted:

“People are still coming forward from Chicoutimi and Swissair,” said Colonel Rakesh Jetly, head psychiatrist for the Canadian Forces. The Chicoutimi submarine fire killed one seaman in 2004, and the military was deeply involved in recovering bodies and wreckage after the 1998 Swissair crash.

- srbp -

Related:  Those interested in the history of the treatment of  psychological injuries in the Canadian Army can find a excellent account in Terry Copp and Bill McAndrew’s Battle exhaustion: soldiers and psychiatrists in the Canadian Army, 1939-1945.

Sadly, much of the experience gained in pioneering work done during the Second World War vanished in the years after only to be rediscovered – out of sheer necessity – since the end of the Cold War.

One statement, three stories #nlpoli

Finance minister Tom Marshall delivered his fall financial update on Wednesday.  Thankfully they no longer wind up being called mid-year updates since they appear long after the middle part of the fiscal year.

Having successfully lowballed some of their numbers from the spring budget, Tom’s officials have produced a surplus – on an accrual basis – of what they figure will be more than $750 million.

The extra cash is due to higher than forecast oil prices coupled with higher than forecast offshore oil production.

“This surplus will be applied directly to debt, decreasing the province’s net debt to approximately $7.7 billion, which is a significant achievement,” said Minister Marshall. “There has never been a better time to live in Newfoundland and Labrador. A robust economy is producing record employment, income levels and consumer confidence. Having said that, we must remain prudent in our fiscal management as there are challenges on the horizon that we must face.”

In a media interview, Liberal finance critic Dwight Ball clapped the minister on the back for paying down debt and gave him a bollocking for not being able to forecast things more accurately.

New Democratic party leader Lorraine Michael gave Marshall a dressing down for not spending all the extra cash. it was so predictable a statement one wonders why Lorraine is still hogging the spokesperson job.

One statement.

Three stories.

Wonderful stuff, of course, except that everyone seems to have missed the one gigantic fib in the whole thing.

No one is reducing any public debt whatsoever.

Tom Marshall claims he will do it.  he claims in the media release that he and his friends have been doing it all along.

But it is complete nonsense.

You can tell it’s nonsense because both the news release and the financial update itself refer to net debt.

And as regular readers of this corner know, net debt is nothing more than an accountants statement of all that you owe less anything you have on hand you could sell off to pay the debts.

This extra bit of cash that’s just turned up won’t actually be used to reduce any debt at all.  Most likely it will be set aside to pay for – Lorraine will love this – to cover off an increase in spending next year or to help pay for some massive cost over-runs on this, that or another infrastructure project. SRBP went through the whole thing back in May when Marshall forecast that he would have a healthy surplus.  As it turned out, his forecast of a bigger surplus than originally forecast still lowballed the final result.

- srbp -

Offshore board announces exploration bid results on three parcels

From the Canada-Newfoundland and Labrador Offshore Petroleum Board:

Call for Bids NL11-01 (Western Newfoundland and Labrador Offshore Region)

The following bids, based upon the work commitments bid, have been accepted:

Parcel 1 (218, 468 ha)
Ptarmigan Energy Inc.  100%
$1,501,000.00

Parcel 2 (135, 520 ha)
Ptarmigan Energy Inc.   100%
$501,000.00

Total: $2,002,000.00

Call for Bids NL11-02 (Flemish Pass/North Central Ridge)

The following bids, based upon the work commitments bid, have been accepted:

Parcel 1 (247, 016 ha)

Statoil Canada Ltd.                 50%
Chevron Canada Limited       40%
Repsol E & P Canada Ltd.     10%

$202,171,394.00

Parcel 2 (186, 780 ha)

Statoil Canada Ltd.                50%
Chevron Canada Limited       40%
Repsol E & P Canada Ltd.     10%

$145,603,270.00

Total: $347,774,664.00

Subject to the bidders satisfying the requirements specified in Call for Bids NL11-01 and NL11-02  and upon receiving Ministerial approval, the Board will issue exploration licences for all four parcels in January 2012.

- srbp -

Nalcor’s own studies back NG as Muskrat alternative #nlpoli

According to Nalcor’s final submission to the Canadian Environmental Assessment Agency review panel, the company dismissed natural gas as an alternative source of electricity instead of Muskrat Falls.

This alternative is purely hypothetical, as the current offshore operators have looked into the technical and economic feasibility of transporting and marketing their natural gas reserves and none have identified a viable business case. (page 20)

A Nalcor consultant that was asked to review Nalcor’s decision-making for Muskrat Falls agreed that studying natural gas was a waste of time because there was no commercial natural gas development already in place in the province. 

Purely hypothetical.

Not worth the time to review?

Well, not exactly.

According to documents filed by Nalcor with the public utilities board, the company asked consultants in 2008 to prepare a cost estimate to build a natural gas plant with different capacities.  According to the consultant’s report, the largest of the variants – capable of replacing Holyrood by producing 550 megawatts – would cost between $617 and $633 million.

According to another document tabled by Nalcor with its PUB submission, the company was still reviewing cost options for natural gas generators.  The estimate for a 50 megawatt turbine obtained by Nalcor in 2010 shows that the prices remain comparable to the 2008 study.

In Nalcor’s submission to the PUB, the company acknowledges that it studied and then dismissed natural gas as an alternative based on what turn out to be misleading claims about offshore natural gas.

First, Nalcor states that:

To date, no proposal for natural gas development, either export or “landing”, has been submitted  by the offshore operators despite years of technical and economic study. (page 58)

That’s grossly misleading though.  Nalcor officials know that at least one offshore company has expressed an interest in studying the economic feasibility of natural gas development offshore. 

The problem is that in order to assess the economic potential, the company would need to know the provincial government’s natural gas royalty regime. And – despite studying a natural gas regime since the late 1990s and despite a 2007 commitment to finalise the draft natural gas royalty regime contained in the province’s energy plan, the provincial government still hasn’t produced that crucial piece of financial information.

Four years later.

The provincial government still can’t tell offshore companies who want to develop natural gas what it will cost them.

And then the provincial government’s energy company uses the lack of development as justification for Muskrat Falls.

Talk about circular reasoning.

With that convenient bit of information out of the way, Nalcor’s next reason for ignoring gas – the lack of a domestic market in the province – also falls by the wayside. 

Then Nalcor claims that development of the natural gas resource would have to involve all four fields and, well, all four fields have different natural gas strategies:

Natural gas is associated with the Hibernia, Terra Nova, and Whiterose [sic] developments, but each operator has its own strategies for the gas associated with their respective development. Natural gas associated with the Hibernia development is re-injected into the reservoir in order to increase the recovery of oil from the reservoir. This re-injection is a form of enhanced oil recovery, or EOR. In the case of the Terra Nova development, natural gas is re-injected and is also used to reduce the viscosity of produced crude oil, an EOR technique known as natural gas lift. Finally, natural gas from Whiterose [sic] is being stored in an adjacent reservoir for future use. Each operator has developed its own strategy for natural gas use, and to date, no concrete plan for domestic natural gas development exists.

Ultimately, that’s just a restatement of the same original misleading Nalcor claim, combined a bit of additional misleading information along the way.

Hibernia does re-inject natural gas as part of its oil extraction strategy.  The companies also use some of the gas to power the platform. But the plan has always been to preserve the gas so that the companies can exploit the gas for commercial sale eventually.  After all, estimated reserves are on the order of 2.6 trillion cubic feet.

Ditto Terra Nova.

And, as Nalcor notes, at White Rose – that’s how the name is spelled – the developers are hanging onto the gas so they can exploit it when and if they find a market.

Three things stand out about this most recent revelation:

First, Nalcor continues to rely on misleading statements  to justify its decision to ignore lower cost alternatives to Muskrat Falls.

Second, work completed for Nalcor confirms estimates done in 2005 that proposed  natural gas as a viable source of electricity for the province and for export.  Nalcor makes no reference to the NOIA study.

Third, Nalcor did not disclose this information before.  In fact, the PUB submission seems to be nothing more than an effort to rebut a series of substantive criticisms of the Muskrat Falls project that turned up during the CEAA review. 

And that’s what is most disturbing of all:  Nalcor didn’t disclose this information about natural gas before now.  In fact, the final submission to the environmental review made no mention at all of the fact that Nalcor had cost estimates for a natural gas plant.

Given that the most recent disclosures to the PUB further undermine Nalcor’s central claim – that Muskrat is the only viable choice – it’s no surprise Nalcor has tried to hide as much information as they could for as long as they could.

No surprise either that as the public learns more about the project, their support for the Muskrat Falls project is dropping like a stone. 

Nalcor has given them good reason to doubt the company’s claims.

We all can’t be wrong.

- srbp -

Vote SRBP as Best Political Blog in Canada 2011 #nlpoli

Voting for the Canadian Blog Awards 2011 is underway.

There’s the usual wide range of categories and the usual wide range of blogs from across the country.

Before you vote take the time to check the blogs, reads some posts and check out categories you might not usually be interested in.

And when you’ve done all that, your humble e-scribbler is humbly asking for your vote.

Help make Sir Robert Bond Papers the best political blog in Canada for the second year running.

It’s readers choice so it all comes down to you.

Click the picture to vote!

(Opens in a new tab)

 

- srbp -

Economy to slow down? #nlpoli

The Canadian economy will slow in the months ahead, according to the Organization for Economic Co-operation and Development (OECD). As the Canadian Press reported:

Severe debt problems in Europe combined with slow growth in the United States, Canada’s biggest trading partner, to drop demand for the natural resources Canadian companies produce.

- srbp -

Free advice #nlpoli

Free advice, they say, is worth exactly what you paid for it.

And when it comes to free advice on the provincial Liberal Party leadership, Dean MacDonald is more full of it than usual.  CBC’s David Cochrane gave MacDonald free airtime this past weekend to share his insights into what the party needs to do.

Cochrane describes MacDonald as having “long Liberal ties” but that really isn’t an accurate description of MacDonald’s limited association with the Liberal Party.  Sure the guy spent some time as Brian Tobin’s bagman for Tobin’s abortive federal leadership run.  But other than that and raising some cash recently, MacDonald’s most significant act while associated with the Liberal Party was blading Roger Grimes as MacDonald’s old business buddy  - Danny Williams – strode toward the Premier’s Office.

And that, dear reader, is the extent of MacDonald’s association with provincial Liberals.  If that’s all that it takes to have not only ties, but long ones by some estimations, then perhaps that speaks more to the sorry state of the provincial Liberal Party at this point in history than anything else.

The guy, after all, hasn’t held any positions within the party, has an incredibly limited record of his own of making financial contributions to the provincial Liberals and, as far as it appears has absolutely no political experience whatsoever.

MacDonald acknowledges this point, by the way, when he talks about the need for establishing some street cred within the party. 

And aside from suggesting he could “help out” by fundraising or doing some other odd jobs, MacDonald doesn’t offer much else. 

What he does do is spout a phenomenal load of pure shit throughout the entire interview.  One of the choice moments is when Cochrane asks MacDonald about Dean’s criticism about Kathy Dunderdale’s “unsustainable” spending.  MacDonald quickly disavows any suggestion he was criticising the Conservatives. 

When Cochrane notes – quite rightly  - that Danny is the guy who started the unsustainable spending, MacDonald launches into an extensive Conservative apologia for Danny Williams’ unsustainable public spending.  It’s vintage Williams bullshit from a charter member of the Fan Club.

Beyond that, Dean doesn’t have anything to offer on the Liberal Party beyond the need to “rebuild”, bring in "new people and fresh blood.

And that’s it.

To describe this as amateur and superficial would be generous.  His own experience in fundraising is, by his own characterization, nothing beyond “arm-twisting” and organizing big dinners with high profile speakers.

On Muskrat Falls, MacDonald doesn’t do much better.  he exaggerates his own involvement with the provincial government’s hydro corporation.  His observations about the project and the issues involved are best described – again to be very generous – as superficial.  MacDonald does not even have substantive talking points on the subject. The best he can do to try and counter David Vardy’s critique is suggest Vardy is recycled from the 1970s. 

And that – you can see where this is going - is all there was.

If you want to talk about Liberal leadership politics, you’d be far better off looking at the federal party.  There, at least, you can find people with ideas and energy.  You can find people who have done a few things, taken a few for the team they were actually on, and who remain ready to do more.

The federal Liberals are talking about having a wide-open leadership race that lasts several months and involves a series of votes.  Some are likening it to the American primaries.  As the Toronto Star reported:

“This is not tinkering at the edges. This fundamentally changes how power in a political organization is exercised,” Liberal party president Alfred Apps told reporters on Thursday as the revival plan was released.

Some of the problems the federal Liberals have experienced are mirrored at the provincial Liberals:

• An “out-of-date” party structure, with “an approach to campaigning from a bygone era.”
• An “aging establishment elite” holding too much power at the party centre.

For the provincial crowd, you can add a third one:  a tendency to accept players from another team into their midst.  Some of them even wind up being touted as potential leadership material spouting tons of free advice.

- srbp -

Quebec adds 300 MW of wind #nlpoli

Enbridge will invest $330 million for a 50% stake in a 300 megawatt wind farm 400 kilometres northeast of Quebec City.

The Lac Alfred project will consist of 150 2MW REpower turbines with locally-manufactured blades, turbines and converters. Construction is scheduled to occur in two phases: the first began in June and will conclude in December 2012; the second will be completed in December 2013.

EDF EN says the wind farm after completion will supply electricity for about 70,000 homes. Provincial utility Hydro Quebec will buy the power under a 20-year agreement and also construct a 30km transmission line linking the project to the grid.

- srbp -

Typical

The Telegram’s Saturday edition carried a profile of Lieutenant Colonel Perry Grandy.

For those of us who know Perry, Alex Brannan’s description hits it squarely on the head:

“I have soldiered with him on a deployment. … He is a great role model who tears down obstacles so that others can advance. He sets the standard for staff work. He has an insatiable appetite for analyzing, preparing and executing plans,” Brennan said.

Brennan said Grandy is driven by the understanding that well-prepared plans reduce the chances for casualties.

“Canada is fortunate to have him and I am proud to count him as a friend. He is an asset to his employer and to our province.”

The word you’d use to sum up all those qualities and more is:  Perry

And for those who know the men and women of the Canadian Forces Primary Reserve, the word that comes to mind is: typical.

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