A Big Tell on Muskrat Falls Exports #nlpoli

A meeting of the Eastern Canadian premiers and all the New England Governors and the provincial government here sends Keith Hutchings.

Who?

A finalized term sheet? #nlpoli

Nalcor and Emera signed a finalised term sheet to develop Muskrat Falls in November 2010.

The next step was supposed to be negotiation of a final agreement between Nalcor and Emera.

Oddly enough, Canadian Press reported on Monday evening that “[s]ources say a deal to finalize a term sheet to develop the Muskrat Falls hydroelectric project in Labrador has been reached.” 

CBC’s David Cochrane tweeted:

CBC has confirmed CP report that NS and NL will sign Muskrat Falls term sheet tomorrow. Multiple sources. Its [sic] final legal text.

“A deal to finalize a term sheet” and “will sign Muskrat Falls term sheet” when they already finalized the term sheet in 2010?

That’s a very odd way of putting it.  Now this could just be media inaccuracy.  If they had a “final legal text”, as Cochrane’s tweet said, then they’d do what they did in 2010 only even bigger because a final deal is…well… even bigger.  

Instead, Nova Scotia Premier Darrell Dexter is in Vermont at a regular meeting of government leaders from eastern Canada and the northeastern United States.  Kathy Dunderdale is MIA.

Instead, the Government of Newfoundland and Labrador issued a media advisory on Monday that natural resources minister Jerome Kennedy will hold a news conference on an “energy-related” subject at 9:45 AM Tuesday after a technical briefing for news media. The event will take place at the provincial government media centre.

The Nova Scotia government is reportedly planning a similar briefing in Halifax. There was no word on whether or not the companies that are supposed to be working out the deal would participate in either event.

The government media centre is not the venue for signing a major deal. Compare that to what happened in 2010.  It was a huge show for much less than the “final legal text” and  - incidentally - what they announced in 2010 was the final legal text of the term sheet. 

Just so that you know what a big deal they had a couple of years ago, here’s an official photo of the event:

The local Conservatives don’t screw around when it comes to major announcements.

In August 2008, the provincial government held a major show when they reached a final deal to develop Hebron. It was bigger than the announcement the previous August of a memorandum of understanding to develop Hebron.

And in August 2005, the provincial government announced a major decision on the Lower Churchill. Big show.

Funny how all these really big announcements come in August, isn’t it?

And funny how a supposedly bigger deal is being announced with a small show.

-srbp-

The Art of Budget Forecasting #nlpoli

The provincial government set its budget this year based on an oil price forecast of US$124 a barrel in 2012.

As we move up on the midway point in the fiscal year (it starts on April 1), oil is well below that.  The result is that the provincial government could wind up with a deficit of nearly three quarters of a billion dollars, according to the Premier.

Some people are amazed by this.

They shouldn’t be.

This fits a pattern.

Those friggers from [insert name of province] #nlpoli

Anyone steeped in the whole Quebec-Newfoundland fight over hydro-electricity exports will look at the whole Alberta-British Columbia fight over oil exports and see the connections.

Sure, they are there.

The most obvious:  one province wants to get somewhere to export its energy product and there’s another province standing in the way.

What else could there be?

Well, lots actually.

The Magic Number #nlpoli

“Nalcor’s position”, wrote the joint federal-provincial review panel on the Lower Churchill project, “was that up to 800 MW of energy from the Project would be required to meet provincial demand,…”.

And there are Nalcor’s forecasts that support the claim that out of the 3,000 megawatts potentially available from the Lower Churchill project, the province will need 800 megawatts.

There’s something about that number, 800.

Hmmm.

Demand Forecasts #nlpoli

Yesterday’s offhand reference to Nalcor’s electricity demand forecasts brought home a couple of points to your humble e-scribbler. 

The biggest one is that a great many people still do not know a lot of the basic information on this project despite the fact the provincial government announced it the better part of two years ago.

Well, never let it be said that this wasn’t a space where information was hard to find.

NL wheeling power through Quebec #nlpoli #cdnpoli

From April 2009, here’s Kathy Dunderdale – then the province’s natural resources minister – quoted in a news release on an historic agreement that saw Nalcor wheeling electricity from Churchill Falls through Quebec to the United States:

“This is a significant development for us to share our excess green renewable energy with the rest of North America through our transmission access through Quebec and our subsequent arrangement directly with Emera Energy,” said the Honourable Kathy Dunderdale, Minister of Natural Resources. “These markets are seeking clean, reliable energy, which we have in abundance. The recall block availability and this arrangement allows us to build our reputation and experience as a reliable supplier of clean energy now and into the future.”

Anything else you’ve been hearing is simply not true.

In the same news release, Danny Williams said the agreement was “free of the geographic stranglehold of Quebec”.

False information is pretty persistent, though.

-srbp-

There’s no greater yada than a yada yada #nlpoli

The Nunatukavut are a group of aboriginal people living in Labrador.  They used to be known as the Labrador Metis.

In October 2003, Danny Williams told them – in writing – that his Conservative administration “will involve the Labrador Metis Nation, as we will representatives of all residents of Labrador, in the process of negotiating a Lower Churchill Development Agreement.”

Almost a decade later, the provincial Conservatives under Williams’ successor Kathy Dunderdale have decided to take a different view:

“They don’t have established land claims in our province,” she said. “We have land claims with the Innu people and we have an agreement in principle with the Innu.”

Dunderdale said she would consult with the group, but as for any new negotiations: “We’re not getting into those kinds of discussions at this point.”

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Managing Electricity Demand #nlpoli

Nalcor’s forecast for electricity demand on the island of Newfoundland doesn’t really show a massive increase over the next couple of decades.

Earlier this year, Memorial University economist Jim Feehan suggested that one alternative to Muskrat Falls was demand management.  That is, he suggested that Nalcor try some ways of getting people to use less electricity.

Wade Locke, Feehan’s colleague, and staunch supporter of Muskrat Falls, laced into Feehan. He dismissed Feehan at the time and, by extension, the role conservation might have as part of a comprehensive energy policy in the province.  Locke did change his mind.

Equally dismissive of demand management, Nalcor boss Ed Martin tried on some pretty vicious rhetoric about old people and freezing in response to Feehan.

Gander at the goosing #nlpoli

Apparently, your humble e-scribbler got on Steve Kent’s nerves.

The Conservative politician and his friends have been bombarding Twitter and Open Line shows since the middle of July will all sorts of their old poll-goosing tactics.  So yours truly has been re-tweeting some of the little comments with an added remark like “Gee, you’d swear a poll was coming.”

Small stuff.

But apparently enough to go right up Kent’s nose in a bad way.

Some help for the St. John’s Board of Trade #nlpoli

…who have suddenly discovered that the provincial economy is in serious need of diversification: a 2010 series called the Fragile Economy.

• Staying the course (March 2010)
• Reductio ad argentum (April 2010)
• …and two steps back (April 2010)
• Now three steps back and loving it (April 2010)

If they really want to get a handle on economic diversification, BOT chair Steve Power and his colleagues could start by reading the 1992 Strategic Economic Plan.  What the Board of Trade has been slavishly been supporting since 2003 is diametrically opposite to the 1992 SEP and its call for diversification based on  – gasp! – entrepreneurship, competitiveness, and innovation.

Frankly, it’s been pretty bizarre since 2003 to have a bunch of business owners who endorsed excessive public sector spending and clammed up about entrepreneurship, competitiveness and other subversive ideas.  In November 2010, here’s what the chair at the time said:

Chairman of the Board of Trade, Derek Sullivan said government contracts give a competitive advantage for local businesses and “can be a very powerful and reliable revenue stream.”

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Repsol may sell New Brunswick LNG port #nlpoli

Spanish oil and gas company Repsol may be  looking to sell its  interest in the Saint John New Brunswick liquefied natural gas facility.  The New Brunswick Telegraph Journal reported the news on July 21:

On Thursday, the Spanish oil and gas giant told shareholders it was considering the idea of getting rid of some of its liquefied natural gas business to help shore up its finances.

This includes the potential sale of the Canaport terminal in east Saint John, in which it has a 75 per cent stake. Irving Oil, Limited, owns the other 25 per cent.

The move comes on the heels of the expropriation of Repsol’s majority interest in Argentinian oil and gas company YPF by the Argentinian government.  The government did not pay Repsol compensation for the seized assets.

Repsol is reportedly taking legal action and is looking at options to raise cash in the meantime.  One of those options includes divesting of North American natural gas assets.

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The tone at the top - federal version #nlpoli

Marni Soupcoff has got it right about the campaign finance scandal currently swirling around federal intergovernmental affairs minister Peter Penashue (pronounced Pen-ah-shoe-ay).  People should be concerned about the money Peter Penashue used to get elected:

The part that stands out is the involvement of a federal member of parliament who seems to have, in the absence of an ability to balance his own campaign books, used money that was meant for the Innu community to get himself elected. Not only has he has not been taken to task for this by his Conservative government. He remains a cabinet minister. Now that the media has discovered the loan and Mr. Penashue’s questionable campaign spending, he is finally being asked the sort of questions for which Innu residents surely would like some answers.

As Chief Justice Derek Green reminded us in his report on the the House of Assembly patronage scandal, the way officials and politicians respond to issues such as accountability is set by the tone at the top.

Soupcoff said:

If the Conservatives truly believed in maintaining a government of principle, they would be demanding answers from Mr. Penashue about why money that was meant for a deprived First Nations community ended up in his campaign coffers.

Let’s see what happens.

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There’s reality and … #nlpoli

Premier Kathy Dunderdale decided to talk about reality on Monday.

A reality check she called it:

“Everybody sees what’s happening with the price of oil, and I see every day what that’s doing to our budget,” the premier said.  [CBC online story]

Dunderdale warned that the provincial government’s deficit this year might reach $700 million. her forecast in the spring was $250 million.  Next year it could be a billion, she ventured.

Now that is on an accrual basis, of course.  On a cash basis, the current provincial government will face a deficit of more than $1.06 billion if oil actually manages to average US$124 a barrel.

Reality Check: drops and buckets version #nlpoli

Via labradore, a chart that plots Conservative unsustainable public spending since 2003 with recently announced controls on discretionary spending.

-srbp-

Magical Thinking and the Muskrat Falls Tax #nlpoli

Muskrat Falls seems to be intimately connected to magic, at least in some people’s minds.

For a while there, the gang at Nalcor sounded like they had found a way to make electricity and then ship it back upstream to Churchill Falls where it would be converted back to water. Sort of a water to wine to water miracle.

Not surprisingly, it turned out to be crap.

More Muskrat Falls Sunk Cost #nlpoli

That $350 million in sunk costs from Monday morning’s post wasn’t the whole story, of course. 

You’ll find more detail – and lots more cash – documented in the public utilities board’s final report on Muskrat Falls.

Rae backs Muskrat…sort of #nlpoli #cdnpoli

Big screaming CBC headline:

Federal Liberals support Muskrat Falls project:  Rae

Then you read the story.

Sunk Cost – Muskrat Falls #nlpoli

The chart below is taken from a Nalcor information hand-out describing the project’s capital expenditures to the end of March 2011.

What that covers are the various costs for engineering, staff, advertising and communications and anything else that the Labrador project office has spent getting ready to build the project.

The pre-2003 figures include $57 million spent between 1998 and the end of September 2004, the details of which the provincial government released in 2004.

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Ya wanna know what stupid is? #nlpoli #cdnpoli

According to information supplied to the news media – and widely reported already – the helicopter from 444 Squadron used for a training flight than ended with a bit of fishing for the crew six weeks ago was available for search and rescue missions.

And if that re-tasking wouldn’t have been enough, the squadron had another aircraft on stand-by anyway to meet any call for civilian search and rescue service, which, by the way, is not the squadron’s primary job.

None of that stopped CBC from turning a photo of the trip into a scandal.  But to complain about that though would be to complain about dogs barking:  that’s the shit they do especially when it comes to a potential ratings driver like a controversy spun entirely out of the imaginations of people in a newsroom.