No kittens were harmed… yet #nlpoli #cdnpoli

It is wonderful to be proven right.

Sometimes being wrong is nicer.

In this case, wrong would be the prediction from this corner that the Great VO Muskrat Falls debate would be like tossing kittens off the overpass into oncoming traffic. 

The reaction to the hour-long radio program seems to be that the thing was alright.  No one scored any huge knock-out blows.  No one let slip some gigantic new piece of information.  And no one died.

That last bit understates the case.  Recently minted Liberal leader Dwight Ball impressed some people by holding his own with his more experienced colleagues.  Surviving would have been good.  Keeping pace with the others was better.

Now make no mistake about it.  Neither the Liberals nor the NDP have decided to oppose the Muskrat Falls project.  Their comments, as related by VOCM or the Telegram, raise some questions about how government is handling the thing, not with the proposal itself.

In the scrum afterward – here’s a short clip via the Telegram – note that natural resources minister Jerome Kennedy goes after the NDP.  As SRBP noted before, that’s a sign the Tories think the NDP are the main competition.  It’s also an incredible NDP weakness.  Lorraine Michael scrummed on environmental contamination. Odd then that she didn’t think of that before she campaigned for a loan guarantee to make the project happen.  Maybe Kennedy will make a sharper slice in the future but he let Michael off easy in the “debate”.

Other than that, Kennedy fell back on a few items that are so utterly ludicrous that it is amazing none of his colleagues laughed him off the stage. Among the gems (taken from the VO account:

• “He says gas right now at $3/million BTU's is not economically feasible to be developed, Kennedy says it would have to be more in the range of $10-12/million.”  In other words, offshore gas is too cheap for us to use.  makes no sense.
• “Kennedy says until Labrador industry needs the power it can be sold to the United States, and then taken back as need be.”  Well it could be if they had markets.  Truth is Nalcor can’t find anyone to buy Muskrat Falls electricity.

Kennedy’s whole discussion of Labrador power was largely fictional, at least as far as having Muskrat falls meet any needs was concerned.  It’s telling that neither of the other parties seem to have belted that one out of the park.. 

As for Ball and the Liberals, he asked a good question of Kennedy.  Ball wanted the price per kilowatt of the electricity at Soldier’s Pond.  Kennedy wouldn’t provide it.  Either he can’t because they don’t know what the numbers will be or he won’t because the number will frighten the shit out of people.  There’s no upside to that for the Muskrat proponents.

This is an old issue, though.  And it’s long beyond the point where this was the most significant one.  We know the thing will be a costly one for the public.  We know there are cheaper alternatives.  we know Nalcor hasn’t done its homework.  We know they are basically making this up as they go along.  T

The PUB documents show Nalcor and the provincial government started looking at this configuration in mid-2010 only a few months before they announced it was a done deal.  They cobbled together their basic documents from a bunch of different studies that may or may not cover needed work on this particular configuration of Lower Churchill development.  Manitoba Hydro pointed to some glaring management issues, any of which would cause people to slow down the project if not abandon it altogether.

Anyone who firmly opposes this project can safely make broad statements about repeated failures by government and Nalcor. The whole discussion is at the point now where the case against Muskrat Falls is made.  We can cut to the only sensible conclusion:  scrap the “Infeed” plan and send ‘em back to the drawing board.

The fact that the NDP and Liberals keep shying away from the blatantly obvious conclusion on Muskrat Falls gives the provincial government the room they need to slide the whole thing through.

While no kittens were harmed in the Great Debate, the 514,000 who will pay for this mess of a proposal might get crushed later on, if Jerome gets his way and Lorraine and Dwight can’t get their thumbs out.

- srbp -

Jumpin’ Jack Flash #nlpoli

It’s-uh gas, gas, gas


An 824 megawatt combined cycle gas turbine electricity generator plant would cost roughly CDN$950 million.

The gas to power the plant is readily available from the local offshore.  It can be landed using a conventional gas pipeline that would cost around CDN$500 million to build.  That’s based on a 2001 2005 engineering estimate.

The cost of the gas itself would be functionally zero if the provincial government took the supply of gas as  part of royalty payments for offshore production.  Alternately, Nalcor could take its equity share of White Rose and other fields in kind, i.e. in gas, rather than in cash. 

The only question to be settled would be the valuation the provincial government would apply to the gas for the purpose of calculating royalty.

That works out to about $1.5 billion, all up.  Since you can build it on the island near existing power lines, the cost to hook it to the grid would be negligible.

The Oil and Water Option


By comparison, the hydro-electric generating plant proposed for Muskrat Falls would be rated at 824 MW but would only produce the equivalent of about 570 MW on average. You can find the numbers in Manitoba Hydro International’s recent assessment.

Nalcor estimates that the Muskrat Falls dam and plant  would cost about $2.9 billion, or about three times the cost of the 824MW CCGT plant.

In addition, you have to build a transmission line from Labrador to the island at a cost currently estimated at about $2.1 billion.

That works out to about $5.0 billion, all up.

Then  you have to add about $1.4 billion to cover the cost of 520 MW worth of oil-fired generation Nalcor plans to build, along with the cost of the fuel to go with it.

Manitoba Hydro puts the all-up cost, including fuel at about $6.6 billion.

Neither Nalcor nor MHI looked at natural gas as an option.

When you look at the numbers, you have to wonder why they didn’t.

- srbp -

Response and Responsibility #nlpoli #cdnpoli

“How satisfied are you with what they [DND officials] had to say?”

And with those words, CBC Here and Now’s Jonathan Crowe asked the man whose officials were responsible for directing the search for a missing 14 year old boy in Makkovik last week what he thought of explanations offered by people who weren’t directly responsible for the search efforts.

Municipal affairs minister Kevin O’Brien took the opportunity in his reply to obfuscate, to hide provincial responsibility for directing the search either through Fire and Emergency Services or through the police.  His officials were just responding to requests from the police, in this case the Royal Canadian Mounted Police.

The uninformed – and there are plenty of those out there – might assume that because the RCMP are a federal police force, therefore this was a federal option.  The provincial officials were just helping out as good citizens.  That’s not the case at all:  the police work for the province, but O’Brien was apparently quite content to slough this off on the feds, even if implicitly.

A federal failure is an implicit theme local media reports have taken up and O’Brien went right along with it.  He talked about the need for clarity, by implication from the Canadian Forces, on timelines and why they made key decisions.

Over the past couple of days, other politicians have taken up the same sorts of commentary.  For his part, Crowe, was just running with the same tunnel vision that has gripped some local media in covering the story of a search that ended in tragedy with the discovery of the young boy’s body.

There’s nothing new in any of that.  The politicians and the media have tried to pin responsibility for other tragedies – like Cougar 491 – on the air force search and rescue teams as well.  Then, as now, though, the effort to find a scapegoat for a tragedy is powerful and wrong.

National defence officials didn’t help themselves on Wednesday.  In a joint news conference with the acting commander of the Royal Canadian Mounted Police’s B Division, Rear Admiral David Gardam talked about the military role in the mission.  Gardam and his senior air staff officer talked about when things happened and why the military did certain things.  You’ll find the raw video in this CBC story.

But while Gardam may have understood where he fit into the scheme of things, you could tell by their questions, reporters didn’t.  As a result, they never really figured out who was really supposed to answering questions about how the search went and why things happened.

Gardam also appeared tense and uncomfortable. At the end of the newser, as if it wasn’t already bad enough, Gardam interrupted the air staff officer who was answering a simple question simply.  Gardam then took responsibility for deciding to use CH-146 Griffons, instead of CH-149 Cormorants, as if that made a fundamental difference.

Gardam may have thought he sounded leader-like with his abrupt “I’ll answer that” interjection. He was wrong. His reference to moving air assets around to meet the mission may work in the mess, but the talk of what he does during lobster season – in Nova Scotia – came off as a load useless macho posturing.  The mainland reference and his complete inability to pronounce the name of the community grated on ears and confirmed for local audiences that the feds are out of touch with anything in this province.

The real answer was not that Gardam’s balls were big enough to make the tough decisions.  It was that the 444 Squadron aircraft were closer to the scene and had the capability (apparently including forward-looking infrared) to get the job done. By cutting off the questions and walking out, Gardam just made a bad situation that much worse. 

As a result of the DND newser, the Department of National Defence wound up taking it on the chin for something that they didn’t do. Gardam didn’t cut off the story.  He guaranteed the anti-DND turn the story has taken will have legs and the controversy will grow. 

His political masters will be still be dogged out by the likes of Jack Harris and Ryan Cleary. Since Gardam took responsibility for aircraft movements, someone will soon wonder why he thought it a good use of Cormorants to heli-lift the defence minister out of a fishing camp but that a search for a 14 year old boy would compromise his primary mission.

No one should be surprised if Gardam’s Career Indicator Light blew out in the gust of wind as he left the room.

Most of that is Gardam’s fault, not because he’s the boss but because he just screwed up so badly.  What isn’t Gardam’s fault belongs to the idiot who thought it was a good idea to use people to talk to the media  who didn’t actually direct the operation.  The old axiom for military public affairs stills works:  the closer to the pointy end, the better.  The people who do the job know best at every level.   Everyone else is a know-nothing REMF, and it usually shows in embarrassing ways. 

For all the political posturing by the ghouls and for all the media tunnel vision on this, nothing will change the simple tragedy that is at the centre of this:  A young boy died cold and alone.  He died not because of anything anyone did or failed to do but because sometimes really bad things happen no matter what you do.

The family will grieve.  Time will help them move on but they will never get over their loss.

For the police, volunteer searchers, provincial officials, sailors, air crew and all the others who tried desperately to find young Burton Winters, they know they tried and that sometimes this is what happens despite all the good efforts. That may be true but it won’t help them sleep at night.

As for the ghouls and the REMFS and the other shitbirds?

All the rest of us can do is just carry on.  There is nothing you can do about them anyway. They hold no real responsibility and they deserve no better response.

- srbp -

Perspective, and the lack thereof #nlpoli #cdnpoli

Take an elementary level classroom in small town school on the northern coast of Newfoundland.

Add a bunch of 10 year olds.

Toss in some smoked capelin one of them had for lunch.

A few taunts and a squirt or two of Febreze later and you had a fine batch of bullshit stew for the talk radio fanatics in Newfoundland to chew on all day Tuesday.

All this agitation because a teacher sprayed a little air freshener on a boy in her classroom who was suffering the taunts and jeers of his classmates over the fact he smelled of cooked fish.  She did it outside the classroom, discretely as it seems, but that was not to be the end of the tale.

The young fellow told his mother about the incident when he got home. And mom, not to be denied a scalp, called the teacher to berate her, then called the school the next day and wasted no time at all in getting herself on the local media. 

Her only goal?  To get the teacher fired from her job.

Mom was evidently not thinking much about her son.  After all, the louder that Mom screamed the more people knew about the story. By the time Mom got into full fury, little Christian’s few capelin became an incident known around the globe.

If he had been embarrassed by the jeers and the freshener, he must well be on the way for extensive psychiatric treatment after Mom got on the job.

Scarred for life.

Post-traumatic stress disorder.

Every time he looks at a plate of the little fish? 

Instantly paralysed with fear.

From now on trout may send him into a catatonic state from which he may never recover.

Let’s not even talk about what herring might do to him.

The majority of callers thought that firing the teacher was not good enough. Skinning alive might have satisfied some, such was their bloodlust.  The young teacher had insulted their nationalist honour, defiled the birthright of the nation, spat on her own heritage.

Fired, disgraced and never allowed into a classroom again would have been letting her off lightly.

Hysterical is one word for the comments. 

Absofriggin’lutely-nutso-out-of-all-proportion-to-the-incident would be much closer to reality.

Take the comments on this news story as typical. Note the number.  On Tuesday night, it was rapidly creeping up on 400.

Meanwhile, the government agency responsible for looking after injured workers revealed this week that one of its employees had been accessing confidential client records he wasn’t supposed to be looking at. They talked about a dozen files over the course of three years.

According to CBC, the chief executive at the agency said this was the first incident of its type at the agency. Take the numbers of comments on this story as typical of the public interest in a pretty significant privacy breach.

As for it being the first of its type, that seems to be true.  But it certainly isn’t the first privacy breach at the agency.  Four years ago, the same agency suffered a significant breach.  How the agency and its government masters handled the story was as amazing as the incident itself.

The Febreze teacher story is going viral on the Internet, the teacher is suspended and the school board is apologising left and right as they start a full-on investigation into the incident.  If the teacher keeps her job it will be a miracle at this point.

In the privacy story, the whole thing is just sliding quietly on by with very little notice.  Odds are very little of consequence will happen to anyone involved.

Take a look at these two stories and you get a very interesting perspective on Newfoundland and Labrador and what matters to people.

- srbp -

It just smacks you between the eyes #nlpoli

Digging back through some old posts on Monday evening, your humble e-scribbler came across one titled “Abuse and power”.

This sort of thing happens every now and then when you start skimming back through old posts:  a pattern starts to emerge out of what prompted the post in the first place.  It could be something you saw before and were conscious of at the time.  Or it could be some old issue that looked like a one-off at the time but instead turns out to be linked to other events or issues.

The thing is almost exactly one year old and it is amazing how easily things slip out of your mind.

The issue at the heart of the post is very much the same as the one this year involving the Auditor General and secrecy:

On the face of it, what the people of Newfoundland and Labrador are seeing here is yet another example of how the current administration has steadily reduced, muzzled or eliminated any means by which someone may question its decisions.

Sometimes stuff like that just leaps up and smacks you between the eyes.

Just take a second and go back and read the post from last year.  See if it strikes you.  The writing’s not bad either.

- srbp -

Thriller it ain’t #nlpoli #cdnpoli

Transcon’s Michael Johansen on the latest twist in the Lower Churchill saga:

Creak, creak, creak … rattle, rattle, rattle … snap! Screeeeeeech … kerplunk!

Hear that? That’s the sound of the wheels once again falling off the Newfoundland government’s 30-year-old Lower Churchill campaign bus.

Meanwhile, the Chronicle-Herald editorial crew think that the Nova Scotia government should send the Muskrat Falls deal off to their utilities review board for an assessment.

They’re worried about getting stuck:

But from a Nova Scotia viewpoint, there are other options, like imported power from Quebec or access to swelling U.S. supplies of natural gas, that were not examined by the PUB. So it makes sense for Mr. Dexter to frame some reference questions of his own for our URB, to address whether Muskrat Falls is the best bet from a Nova Scotia perspective.

And for those who think there could be exports to help pay for Muskrat falls, guess again.  Ontario is facing such a glut in generation that they may have to shut down some of their nuclear power plants temporarily.  That’s significant because nukes give 57% of Ontario’s generating capacity and you can;t spool them back up quickly.

Last June 8, for example, … Ontario was exporting “everything we could to keep supply in line only to declare an energy emergency alert just 12 hours later. Demand climbed to the point where we were using every available megawatt in Ontario to meet that demand.”

- srbp -

Literacy plan still MIA #nlpoli #cdnpoli

Newfoundland and Labrador has one of the highest illiteracy rates in the country.

There’s a huge demand for skilled labour in the province and that illiteracy level doesn’t help.

The 1992 Strategic Economic Plan recognised the connection between literacy and economic development:  it’s not like government officials weren’t generally aware of the concept.

And yet:

“There are no province-wide initiatives to deal with family literacy, aboriginal literacy, English as a Second Language, GED (General Educational Development) preparation or workplace literacy and essential skills,” [Literacy NL executive director Caroline Vaughan] said.

That’s a killer quote taken from a story the Telegram ran Monday about a news release from Literacy Newfoundland and Labrador.  They are wondering where the heck the strategic literacy plan went. 

The Telegram again:

Literacy NL said is was told by the province last September the plan would be released in the 2011 calendar year.

In case you are left scratching your head, be assured that the provincial government started work on a literacy plan in 2008.  They even had consultations.

As you can see from the picture, they started work on it so long ago that the link is dead from the news release announcing the consultation to the consultation document. In fact if you try and find anything on “literacy” in the education department, you’ll find yourself out of luck.  Most the links in this search your humble e-scribbler tried on Monday night turned up 404s – page not found. Ditto another search run from the front page of the government website.

You really couldn’t make this shit up.

If you want a strategic literacy plan from the government, you can find one.

It’s a link to one developed 11 years ago when Judy Foote was education minister.

You really, really couldn’t make this up.

And if you want to find the adult learning and literacy section, you will have to guess that it is now part of Joan Burke’s new department of advanced learning and skills development.  The government’s website won’t tell you where it is, though.

A search of the advance education department website for “literacy plan” redirects to a search of the old human resources, labour and employment department. That’s foolish since adult literacy belonged to education before the recent re-organization. Luckily for the government types, people who have a problem with literacy likely don’t have enough computer knowledge to get totally frigged up by the government’s website. They wouldn’t be able to get to the advanced education site to get misdirected by the search engine.

You really, really, really could not make this stuff up.

That’s not to say that successive ministers of education haven’t done something about adult literacy.

In 2010, education minister Darin King issued a news release that endorsed an awareness program on literacy being launched by the four Atlantic provinces.

In 2009, the education department issued a news release on behalf of the Council of the Federation to announce the Council had recognised someone here for achievement in adult literacy.

Aside from those news releases, though, the education department hasn’t been able to deliver the latest update to the provincial literacy plan. 

Regular readers of these e-scribbles will be noticing a familiar pattern here.  For whatever reason, the current administration cannot seem to deliver anything. They’ve got a chronic problem.:

• Serial Government:  the “Northern Strategic Plan” that was out of date before they released it.
• Serial Government:  the original business department.
• What plan was that again? The NSP also wasn’t much of a plan;  it was pretty much just a list of spending.  Sounds suspiciously like the $5.0 billion infrastructure “strategy” in the most recent Auditor General’s report.
• A list as long as your arm:  Check the section on building maintenance in the AG report and you’ll find another example of government’s fundamental management problems.  Hundreds of buildings need repairs.  Some need so much overdue maintenance work it would be cheaper to tear the buildings down and build a new one.
• The missing oil royalty regime:  according to the energy plan from 2007, the Tories were supposed to deliver a natural gas royalty regime (under development since 1997) as well as a completely new oil royalty regime.  They posted something called a gas royalty in April 2010 but the thing isn’t back by regulations.  Is it real or just a fake?
• There’s also the churn in senior management.
• And the fact that massive cost over-runs and delays are now the norm in provincial government public works.

The literacy plan joins a long list of commitments that are missing in action or went missing for years.

You can read Literacy NL’s  submission to the consultation on the literacy plan here.

- srbp -

Duty of care defined

18.   [Defendant] also owed plaintiff ... a duty of care not to drink under age, or to file bottle rockets out of his anus.

This seems like one of those things that just didn’t really need to be stated.

You kinda think people would understand either bit of it separately.  Certainly you’d think that people would appreciate that underage drinking and shooting rockets out of your arse are not good ideas if put together.

Maybe the obvious things are just not so obvious after all.

The Toronto Sun ended its coverage of this story with a reminder that “[s]tatements of claim contain unproven allegations.”

- srbp -

Ridiculous is all the rage #nlpoli #cdnpoli

Fresh from her triumphant speech about co-operation and consultation as the way to develop the north, the potential for developing uranium in Labrador and  - of course – the glories to come from Muskrat Falls, Premier Kathy Dunderdale is off to Atlanta as part of an Atlantic provinces’ trade mission.

Regular readers will recall then-business minister Paul Oram’s insightful interview on Newfoundland and Labrador history during one of his trips to Georgia.

Yes, friends, this is not the first time people from this province have gone off to the southern United States to see if we could increase trade with the Americans.  It has been a popular destination.  Danny Williams took one of his last over-seas trips to Mississippi as part of one of the trade junkets.

As you can see from that post on Williams’ trip, the Americans are looking for people to come to their states, invest money and start creating jobs for their people. There could be no better time to talk to them about investing in our province and creating jobs here.

Obviously.

And if you wanted to find some place to sell stuff we make then surely there can be no better time to do that than when our largest trading partner  - the United States – is struggling to come out of a recession. 

Again, a bit obvious, but apparently not quite so obvious to some people.

In a province where even the finance minister said the economy was fragile,  the provincial government can’t quite seem to get the concept that looking for new markets might be a good idea.

Other people certainly get the point.  Prime Minister Stephen Harper has been talking about expanding trade with Asia and Europe.  In British Columbia, they’ve got a new natural gas strategy  - h/t to David Campbell in New Brunswick – that talks about developing natural gas as an export to places like Asia.

Meanwhile, in Newfoundland and Labrador, there’s no serious interest in finding new markets for stuff. A couple of years ago, the current provincial government refused to take part in trade talks with the Europeans.  The locals were more interested in the seal hunt than in creating jobs. Just last year, one local politician said it would be like doing a “back-room deal with a group of serial rapists”.

You can see the level they are working at.

As for natural gas, developing it for any practical use at all is about as popular an idea in government circles as a one cheek sneak sliding across the pews on Sunday morning.

Any talk of it as a means of generating electricity gets them raising the completely absurd idea of buying liquefied gas from somewhere else and importing. 

Too expensive, the government’s favourite economist clucked, to be a viable alternative to the favourite economist’s preferred project. He didn’t really even need to hold a match to his straw-man to watch it burst into flames.

And the local natural gas? 

Well, it’s just not possible.

Because, well, it just isn’t.

Never mind that you wouldn’t have to liquefy the stuff to bring it ashore.

Never mind that there is enough of it out there to power a 500 megawatt plant all day long, every day, all year long for a century.

Never mind that they could get it from one field today where it is getting costly to re-inject the gas they get during oil production. 

Never mind that the provincial government need take only as much gas as they needed to run a gas-to-electricity plant. 

Never mind they could put a price on it and take the gas as a partial credit for offshore royalties.

Never mind there’s likely tons of it onshore Newfoundland.  The same people pushing the very expensive electricity scheme actually found gas in 2011 in not one but two wells drilled at Parsons Pond. Nalcor shut down drilling on a proposed third well because they found gas, not the oil the company hoped for.  And, as CBC reported:

Vice-president Jim Keating said there is no need for a third well as it would likely produce the same result.

Same result being gas.

Gas?

What could they possibly do with gas?

Sheesh!  <insert eye rolling>

The government crowd want to go with their Labrador project and that is really the end of it as far as they are concern.

It is a green project, you see.

Just don’t bother to notice that their “green” scheme includes building – wait for it – more oil-fired generation than the current plant they want to replace with the hydro one.

Not gas.

Oil.

Yes, their argument is ridiculous, but then again, it’s no more ridiculous than giving up a market worth billions for new products in order to posture about a product almost no one wants any more.

Or heading off to the sort-of recessionary United States for the umpteenth year in a row to talk trade with people we already trade enough with.

Ridiculous, you see, is all the rage.

- srbp -

Here kitty, kitty #nlpoli

Apparently natural resources minister Jerome Kennedy, Liberal leader Dwight Ball and NDP leader Loraine Michael will debate Muskrat Falls on VOCM this week.

Okay, leave aside for a second the fact it is Jerome versus party leaders and not the three party leaders or Jerome and the natural resources critics for the other parties.

How do you have a debate among representatives of three political parties who,  at worst actually all support Muskrat Falls.

In order to debate you need to have some sort of genuine disagreement.

At best, VO has a party that supports the project openly (The Tories),  one that pretends it doesn’t back the project unequivocally now that people are starting to oppose it (the Dippers) and a third party that can’t figure out WTF its position is (the Liberals).

Telegram columnist Bob Wakeham dared the Ceeb to organize a genuine public debate or discussion to promote awareness of the project and the issues around it. 

Voice of the Cabinet Minister took the challenge instead. What VOCM is offering looks to have both the information and entertainment value of throwing kittens off the overpass into traffic.

- srbp -

That’s the best he’s got #nlpoli

As a rule when you start attacking the other guy’s character or attributing motives to him, you’ve admitted you don’t have much of an argument of your own

Natural resources minister Jerome Kennedy went back to the line on Wednesday that critics of the Muskrat Falls project are “politically motivated” and therefore can never be satisfied.

Uh huh.

Some of the leading public critics of the provincial Conservative government’s plan are – wait for it – provincial Conservatives. 

Cabot Martin was a senior policy advisor for Brian Peckford in the 1980s and before that worked for Peckford when he was energy minister in Frank Moores’ Tory administration.

Ron Penney?  Tory.

John Collins?  Tory finance minister once upon a time.

What they share with others of other political backgrounds and some with no partisan affiliation of any kind ever, aside from a concern for the best interests of the province and its people, is an extraordinarily rich body of personal knowledge about Hydro and the Lower Churchill from the very first talk of it down to the current day.

The signatures at the bottom of a letter in the Thursday Telegram come from people of different political backgrounds.  Their common interest, aside from what’s best for the province, is assuring that this project go through due process:

A refusal to give the Public Utilities Board the time it requires is unacceptable because the validity of a proceeding that does not follow due process of law will be unreliable.

As criticism of the project mounts, as the arguments in favour of the project crumble, Jerome Kennedy wants to try and impugn the integrity not of the arguments against his project but the people presenting them.

Argumentum ad hominem.

That’s the best Kennedy’s got.

Take that for the admission of failure it is.

- srbp -

Inadvertent humour, the MHI report edition #nlpoli

The Telegram editorial on the Manitoba Hydro review of Muskrat Falls is a tidy bit of work with some sound advice:

The bottom line? Anyone who wants to say anything — either for or against — about this project should read the whole report carefully, and with an open mind.

Read the whole editorial, though.  It also notes a key point missed by so many reporters in the past 48 hours.  They are the ones who say that the report concluded Muskrat Falls is, indeed, the “least-cost” option to meet the power needs.  Even accomplished writers buggered up the simple logic behind the grammar.

Least-cost suggests the Muskrat Falls bested more than one alternative.  It hasn’t. it is the lower of the two choices, based, as the Telegram notes, on the parameters and assumptions MH got from Nalcor.

Then there was a “but”.  It’s the stuff after the “but” you need to pay particular attention to.

What’s funny about that?  Well, nothing, actually.

What’s funny are comments under the editorial in the online version.  A few government agents using pen names or pseudonyms proclaim their support for the project.  One even says he read it;  after all the MHI report was short.  Evidently he confused the e-mail from his boss with the talking points for the actual report.

If the report had condemned the project those fellows would not have read it or cared.  They’d simply be cranking out the same drivel they are handed.

Another commenter, a critic of the project, goes on at length challenging the demand forecasts.  That’s pretty much a mugs game.  We will need power just as we need air.  We need to replace Holyrood with something.

The question is what we do (how much generation and what mix of types) and when we do it.

The MHI report makes it plain that the current proposal – a big hydro plant built first coupled with more thermal generation than we currently have – ain’t really all it’s cracked up to be. it has plenty of big risks, some really faulty assumptions and way too many serious  management shortcomings in the project thus far.

Of course, to even get that bit about what the project really entails (about more thermal than we currently have) you’d have to read the report, something that too many people evidently haven’t done.

- srbp -

Get politics out of fishery: report #nlpoli

A strange as it may seem after years of evidence that political interference in fisheries management has caused nothing but grief, there are still people – all politicians – who think the answer is yet more political interference.

Expect all of them to be out in force responding to this fisheries report because it appears to criticise only federal politicians.  The usual band will be pointing fingers and proclaiming ‘Aha!”.  But make no mistake:  they stand steadfastly for more political interference in the fishery.

You know who they are.  you know because you have heard them on open line shows and the Fisheries broadcast.

The Royal Society of Canada report is on the mark.  If Gus and Phil will take a chance to let this sink in, they’ll know why cod stocks remain in dismal shape:

“But the re-openings took place at the discretion of the minister. They were not based on science, they were not based on an overall recovery plan consistent with our national and international obligations,” Hutchings said.

And all those discretionary re-openings came from the plaintiff bleating of the voices in this province who insisted that the scientists knew nothing, fishermen knew better, there were a few fish in the bays and people should be left to get them while they could.

If Climb-down Cleary wanted to do something constructive about the fishery and the people who depend on it for a living, he’d ditch the sealskin bowtie, stop making a complete arse of himself and push for fisheries management based on scientific principles.

No one should hold their breath for that. Buffoonery from the backmost bench is still too fashionable.

- srbp -

So haunted by ghosts #nlpoli #cdnpoli

Hear what comfortable words our Premier sayeth:

For generations gone by, the undeveloped hydro-power resources of the Lower Churchill were, for Newfoundlanders and Labradorians, like a treasure just out of reach, tantalizingly close but never close enough to enjoy. The gatekeepers of the natural transmission route through Quebec were denying us fair opportunity to get the power to market, and having been burnt once on the Upper Churchill, we were determined not to let that happen again.

Churchill Falls remains as powerful a totem for some politicians in this province as it ever was.  The crowd currently running this place use it more frequently as their beloved Muskrat Falls project encounters more and more problems.

Their only problem is that they know only the illusion of the thing, not the reality.

Take that bit from Premier Kathy Dunderdale’s marathon oration a couple of days ago as a case in point.

At the time of the 1969 contract to sell power from Churchill Falls to Hydro-Quebec, the Lower Churchill was supposed to be a source of energy for the province itself. You can find the very idea in a piece from the People’s Paper from back in the day, as the hideous saying goes.  Only later on did politicians think about trying to sell the bulk of the power outside and use any  money from those sales to pay for a line to bring electricity onto the island, if need be.

The idea of Quebec as an obstacle is an old one, as well.  The truth is that since the early 1990s they haven’t been a problem.  No one developed the Lower Churchill because they could never make the economics of it work out.  The fools never thought of making the people of the province foot the bill for the whole thing  so they could ship the discount juice outside.

In any event, Kathy Dunderdale herself should know that Quebec isn’t an obstacle any more. In April 2009, her predecessor announced a deal to sell electricity from Churchill Falls to the United States through Quebec.  Surely the Premier remembers these words attributed to her in the official news release three years ago:

“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.”

There it is in black and white:  “through our transmission access through Quebec”.

Not around Quebec.

Not under Quebec.

Not over Quebec.

Through Quebec.

Through the "natural transmission route", in the words of the craftsman who put them in Kathy’s mouth.

Nalcor has been losing money on the deal, though.  Electricity prices have dropped through a combination of lower demand in the United States and abundant cheap energy from natural gas.  The reason Nalcor isn’t developing the Lower Churchill for export is that no one wants the power at the prices Nalcor would have to charge for it.  As it is, Nalcor had to promise Nova Scotia a block of power for 35 years for free to get them on board the Muskrat Falls Express.

But through it all, dear friends, based on all that stuff which turns out wasn’t exactly fully, totally and completely in correlation with what we colloquially know as true, “we were determined not to let that happen again.”

And so determined was Kathy Dunderdale “not to let that happen again” that she and her boss tried for five years to lure Hydro-Quebec into taking an equity position – an ownership stake, if you will – on the prized Lower Churchill with the electricity going into Quebec and through Quebec.

We know this because Kathy herself told us all, even if no news media in the province have ever reported it lo these two and a half years later.

Hear what comfortable words Kathy sayeth back then:

Y’know, the Premier has gone to Quebec, and gone to Premier Charest, and, y’know, we’ve had NALCO(R) visit y’know Hydro-Quebec, I’ve been meeting with Ministers and so on. And we say to them, okay, y’know, we’ll set the Upper Churchill to one side, but, y’know, let’s sit down and have a talk about this Lower Churchill piece. Y’know, we know that we have to have a win-win situation here. Because we, as I’ve said earlier this week, we know that if you don’t have win-win you have win and poison pill. Because that’s what we’ve got with the Upper Churchill. So we can have a win-win situation. We know that if you come in here as an equity player that you have to have a good return on your investment. And we want you to have a good return on your investment. But it also has to be a good deal for the people of Newfoundland and Labrador. Now we have been with that message back and forth [i.e. to Hydro-Quebec] for five years. No, sir. No, sir. There is no takeup on that proposal.

In fact, so determined was Kathy that she not let that 1969 contract happen again, so firm was she in her resolve on the matter that she and Danny Williams told the folks at Hydro-Quebec to forget all about it:

we’ll set the Upper Churchill to one side, but, y’know, let’s sit down and have a talk about this Lower Churchill piece

For good measure, Kathy wanted to make sure that Hydro-Quebec actually got a “good return” on their investment in the Lower Churchill.  How good?  Maybe as good as Nova Scotia will get – free power – but alas we will never know. 

Hydro-Quebec, as it turned out, just wasn’t interested.

There are some people, as it seems, who are haunted by the infamous Upper Churchill contract.  They see its ghost at every turn, beckoning them onward. 

And so they follow, mesmerised by the rushing of water and the humming of generators,  deeper and ever deeper into its lair until they can no longer tell what is real and what is illusion.  They talk as though one was the other and that both were the same.

It is then  - and only then – that you know the Ghost in the Turbines has claimed another victim.

- srbp -

Rumpole and the Better Half #nlpoli

You likely won’t hear much mention of this provincial first but in the midst of the hoopla over Muskrat Falls on Wednesday, the justice minister announced a first for Provincial Court:  a husband and wife will sit as judges at the same time.

Former director of public prosecutions Pamela Goulding, Q.C. will sit in St. John’s. 

Her husband is Chief Judge Mark Pike.

The scuttlebutt in the clerk’s room at Number 3 Iniquity Court has it that Pike and Goulding also have the distinction of being the first married lawyers to take silk at the same time. 

Well, sort of. 

In 2008,  the list of new Queen’s Counsel appointments included Pike and Goulding.  A few days later came the announcement of Pike’s appointment to the bench.  As it turned out, Pike got to the bench before the ceremony to hand out the silk robes.  As a result, he never really got the chance to wear them.

Sometimes judges have to do a spell in the hinterland before getting the plum spots in Sin Jawns.  One of Goulding’s predecessors sat in Harbour Grace for the longest while waiting patiently until a spot opened up in town.

Included the announcement with Goulding was Laura Mennie, Q.C. who will sit in Stephenville.  Mennie took silk in June 2011.  At the time of her Q.C. appointment, Mennie was working for the child, youth and family services department in western Newfoundland and also completing the requirements for a master’s degree in family law at Osgoode Hall Law School.

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The trap of fossil fuels #nlpoli #cdnpoli

Muskrat Falls green.

Right?

Get rid of Holyrood.

Holyrood bad.

No more oil burning.

Must be true.

After all, natural resources minister Jerome Kennedy tweeted a couple of weeks ago that:

The cost of oil makes Holyrood so expensive. At peak it burns 18,000 barrels of oil per day. Experts tell us that oil will continue to rise.

…

MF cont'd. Cost of fixing up Holyrood is $600M. Forecasted cost of oil between 2017-36 is more that $7B.Hydro avoids the volatility of oil.

And Premier Kathy Dunderdale told the St. John’s Board of Trade not even 48 hours ago of the glorious future when there are no more fossil fuel plants in Newfoundland, thanks to the wonders of her Muskrat Falls project:

What is the best thing we can do for our children 30, 40 and 50 years from now? It is to escape from a thermal future, taking our economy off the trap of fossil fuels, where we are hostage to rising oil prices. We will deliver a secure, sustainable economy to our children, and that is a legacy we can all be proud of.

Yeah well, hang on to your long johns, there, kiddies.

According to Manitoba Hydro International, the Muskrat Falls plan includes the construction of seven new oil-fired  - i.e. thermal – generating plants between 2036 and 2037.

The total cost for these additional facilities is estimated to cost a total of $1.4 billion in the MHI documents on thermal generation. Is that included in the $5.0 billion cost estimate for this project, less the connection to Nova Scotia?

Sharp eyes will notice that Holyrood doesn’t shut down in this plan until 2030.  That’s with Muskrat Falls.  it will run as a line condenser to help with the transmission and, if you follow the discussion, as a small back-up generator for a short period.

Don’t think too hard about those dates, though.  The entire Muskrat plan anticipates that construction has already started.  They begin counting time in 2010 and have initial power flowing by 2017.  You can already slide that back by at least 12 months and possible 18 months or more.

And don’t you recall reading somewhere official that with “Muskrat Falls, the Newfoundland and Labrador electricity system will be run on 98 per cent renewable, emission-free energy?”

You can take that to the bank.

That is copper-fastened.

Well, maybe more like brass, with a bit of tarnish on it. According to Manitoba Hydro International’s financial assessment:

By 2067, the generation capacity mix for the Infeed Option will be based on 65% hydroelectric and 35% thermal.

Good thing we will escape the trap of fossil fuels.

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Dunderfalls #nlpoli

This is a screen cap of the picture VOCM is using on their front page to illustrate a story on Muskrat Falls.

C’mon guys.  This isn’t artsy.  This isn’t creative.

This is just unflattering to the Premier and therefore inappropriate.

Next thing you know she’ll be slicing into the evil people at VOCM who always treat her like shit after she criticises them.

What’s more creepy though is that there is a right hand holding a recorder and another – maybe left -  hand holding the VO mike and the camera appears to be in between.

Helmet cam?

Seriously.

This is just weird.

It’s starting to look like NTV circa 1974 or something. 

Seagulls flying around.

Captain Kangalini or whatever his name was.

Next thing over in The Valley, they’ll be bringing back the VOCM logo girl.

If they do, run for the hills.

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It’s a nice project, but… #nlpoli #cdnpoli

Manitoba Hydro’s limited review of Muskrat Falls is now available publicly.

Manitoba Hydro concluded that the project is indeed the lower cost option of the two they were limited to studying and using all the assumptions they had to use under the question set for them by the people behind the project.

But…

Let’s take a look at a couple of areas of the report.  There’ll be more to follow.

The opposite of good practices

Nalcor should have completed an alternating current integration study before clearing Decision Gate 2 but didn’t.  (Executive Summary, p. 10 and Vol. 2, Ch.4 )

That study would look at how all the bits of the generating and transmission system would play together given the physical characteristics of different parts of the system. The study would look at things like back up systems, load balancing and similar operating requirements needed to maintain power across a range of possible events (e.g. equipment failures, weather problems etc)

As Manitoba Hydro put it:

Good utility practice requires that these integration studies be completed as part of the project screening process (DG2). MHI considers this a major gap in Nalcor’s work to date. These integrations studies must be completed prior to project sanction (DG3).

This stands out for two reasons.  First, it’s the type of study Tom Adams pointed to in his second post on Muskrat Falls.  Ed Martin will have a much harder time now dismissing Adams’ critique.

Second, Nalcor was very proud of the review of clearing Decision Gate 2  done by Navigant.  How did they miss this?  Are there other equally serious problems with Navigant’s other reviews and endorsements of this project?

Manitoba Hydro didn’t look at the Nova Scotia link.  It wasn’t part of their terms of reference.  They did note however, that Nalcor also doesn’t comply with current North American Electric reliability Corporation standards.  Those are the ones that allow the North American network to fit together.

Those are two big reviews that need to be done.  Nalcor says the system review will be done by March 2012.

Lower cost?

One of the most obvious criticisms of the Muskrat Falls project is that Nalcor simply didn’t look at all the reasonable alternatives.

The second one has been the basis for the cost estimates for the two options that Nalcor did assess.  According to its proponents, Muskrat Falls is the right option because:

1. It costs about $2.2 billion less than the alternative, and,
2. That cost differential is all about fuel prices.

You can find that sort of analysis in Wade Locke’s recent presentation in which he endorsed Muskrat Falls.  Not surprisingly, the current administration loves Wade Locke because he agrees with them so often.

Manitoba Hydro’s Cumulative Present Worth Analysis  (Summary and Vol 2,  Ch. 12) show just how vulnerable those claims are to shifts in their underlying assumptions.

MH asked Nalcor to review their assessment in light of a theoretical closure of the Corner Brook paper mill and the consequent availability of its generating capacity for use by the island system.  The Infeed advantage dropped from $2.2 billion to about $400 million.

Similarly, a change in world oil prices dramatically changed the cost differential.  Nalcor uses forecasts prepared by the internally respected analysts at PIRA Group.  Using PIRA’s March 2010 forecasts, the Muskrat falls advantage drops from $2.2 billion to $120 million.

A change in capital costs – up to a 50% cost over-run on the project – would leave Muskrat Falls a mere $194 million cheaper than the isolated island option.

MH also performed assessment’s in which they varied several factors using reasonable assumed changes.  They reduced the Muskrat advantage in the reported scenarios to less than $200 million and in one instance had them equal. 

Bear in mind that this does not compare Muskrat Falls to other options such as natural gas generation using local supplies.  The preliminary reviews are promising, but neither Nalcor nor its supporters have bothered to do the work.

Also, MH did not run an analysis using a marginally lower fuel price assumption than the one Nalcor used but with a 50% cost over-run on the project.  That’s actually a likely scenario given recent capital cost experience in places like Manitoba.

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Terawatts for Terra Nova and other fun #nlpoli #cdnpoli

Energy analyst Tom Adams points to some problems with the Muskrat Falls project and, in the process,  turns out one of the biggest bits of critical commentary on Muskrat Falls in a while.

You know because the good folks at Nalcor took the time to write a post for their corporate blog that responded to the Adams piece.  Nalcor CEO Ed Martin wrote at the beginning:

I'm compelled to correct the statements made by you, and request the prompt apology you said you would make if your arguments were wrong.

“Correct the statements.”

Remember that phrase.

Ed Martin made the rounds of the local call-in shows, especially the unquestioningly government-friendly afternoon one. No accident that. The Telly ran a story on Tuesday. NTV ran it on Monday night as a blog fight. 

The funny thing is that Ed Martin didn’t actually correct anything.  Sure he claimed that Tom Adams didn’t get his facts straight.  Sure Martin claimed Adams didn’t cover all the information.  After all, there are hundreds of thousands of pages. 

Persuasion by the ton

You can tell this point, the amount of information Nalcor has pumped is so important – and convincing – because Martin and natural resources minister Jerome Kennedy and just about anyone else backing the project will point you to the boxes of documents like they are auditioning for a shot to replace Vanna on Wheel. 

There is all this information, they will say.

Surely we must be absolutely correct in all our claims because there is this pile of  paper.

Try and lift it.

We dare you.

Can’t? 

Then we must be right.

How much weight is it?

A shitload, for sure.  Some people don’t recognise that one shitload is  the average monthly output of “Minister paves road in district” or ”Premier hands out keys to new fire truck” new releases from a typical provincial government department.

One shitload. 

It’s the internal performance measurement for promotions and bonuses in the public service:  “Nelson produced 13 shitloads of happy-crappy releases this year instead of the quota of 12 usually produced by departments of this size.”

It could all be meaningless garbage that no one understands, but that isn’t important in government circles.

Government types measure persuasion, like work: by weight.

But all that is digression…

Your humble e-scribbler has already demolished Ed Martin’s suggestion that the Smallwood reservoir is really there to feed Muskrat Falls. The actual words on the water management agreement as well as 2007 amendments to the Electrical Power Control Act make that pretty clear.

So what about the other big issue, the question of energy from Muskrat Falls? 

How much will there be?

Terawatts for Terra Nova

According to Ed Martin:

Muskrat Falls will generate 4.9 terawatt hours of energy per year.

Adams comes at it another way in his first post.  He looks at a graph of water flows in Nalcor’s own environmental impact study and draws his conclusion:

My area under the curve estimate of the average production rate over the year is 577 MW (taking into account the nameplate capacity). Assuming a theoretically perfect 100% load factor, this corresponds to 5.05 TWh of production — i.e. pretty close to the project estimate of 4.9 TWh of production.

Adams actually gives Muskrat Falls with credit for slightly more energy (5.05 TWh) than Ed Martin does (4.9 TWh) if the water flows are right. No conflict or contradiction there. So let’s take that and work with it.

Terawatts and megawatts and martins:  oh my!

Some of you have no doubt noticed Tom Adams used a figure of 577 MW while the official rating for Muskrat Falls is 824 MW of installed generating capacity.  That comes from installing four generators each with a rated capacity of 206 MW.

Four times 206 is 824.

Simple math.

To figure out the terawatt hours per year involved, you need to multiply that 824 by the number of hours in a year (8760).  So theoretically, if you ran Muskrat Falls flat out all year, the plant should crank out 7.0 TWh.  That’s what you get when you multiple 8760 by 824.

But Muskrat Falls will produce 4.9 TWh according to Ed Martin.  We can also use another Nalcor figure of 4.5 TWh.  Divide that by 8760 and you get rough numbers to compare megawatts, in this case 570 or thereabouts

How does that compare to Holyrood?

According to Nalcor, Holyrood has generators that cumulatively produce 490 MW.  That gives us a theoretical maximum energy output of 4.3 TWh.  Nalcor’s numbers for Muskrat Falls - 4.5 and 4.9 TWh – are only  marginally above what Holyrood does.  To a layman, like your humble e-scribbler, that looks like Muskrat Falls doesn't push out much more than Holyrood, despite the difference in installed capacity.

Now check out the Nalcor’s own water flow chart.  It is based on average monthly flows. 

The period when Nalcor will need water the most to feed domestic demand and at the same time feed Nova Scotia just happens to be the same time when average monthly water flows on the river are lowest.

Now this is not a question of whether they need new water studies or not.  This is also not about the water management agreement. It’s about when the most water is available to make electricity compared to when Nalcor will need to make electricity the most.  They don’t match.

Could it be possible that Nalcor missed something that important?

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Adams and Nalcor: Second Round #nlpoli #cdnpoli

Energy analyst Tom Adams’ latest blog post on the Muskrat Falls project takes direct aim at the water studies used by Nalcor to support its claim that the plant will produce 4.9 terawatts of electricity each year.

Adams writes:

it appears that Nalcor took a study that estimated the energy production available from Muskrat Falls as delivered to an unconstrained interface at the Quebec/Labrador border and applied those study results to the Integrated Island/Nova Scotia system instead. Since the constraints of the Integrated Island/Nova Scotia system bear heavily on the potential output of Muskrat Falls, I believe that there is no basis for you to assert that Muskrat Falls will ever generate close to 4.9 TWh given the system you are now seeking approval for.

Adams appeared on VOCM Nightline and explained his concerns.  Your humble e-scribbler talked to Adams afterward and got more details.

His comments are based on information Nalcor provided to the public utilities board. They are a 1999 study by SNC and an Acres power study done in 1998 and apparently re-affirmed by more recent work described in a four page summary that omits any details.

Adams notes that the water flow studies were based on particular configurations, including building Muskrat Falls as part of a complex including Gull Island. No one has looked at a river system consisting of only Muskrat Falls below the Churchill Falls complex.

Take a look at the table from the Acres study filed with the PUB.  You can see someone’s simple calculation for Muskrat falls.  He or she just looked for the difference between Churchill Falls and Gull and another scenario with Churchill Falls, Gull and Muskrat.

Does that make a difference?  Adams thinks so. 

Your humble e-scribbler might go a bit beyond that.  The higher energy numbers for Muskrat Falls in this table – the ones closest to current estimates – come from a scenario that includes water from two river diversions planned for 1998 but subsequently abandoned. That’s more curious than anything at this point but it suggests Adams may be onto something.

When it comes to delivering electricity to Nova Scotia, Adams has a new point.  He notes that the Nalcor claims about Muskrat’s output come from a different transmission scenario:  one way into Quebec or into Quebec and onto the island.

Adams suggests that congestion on the island lines, especially routing through the hydro lines through the central part of the island, may produce significant congestion.  That congestion could adversely affect how much electricity flows to Nova Scotia.

Is Adams right?

Let’s see if Nalcor answers him this time with something more enlightening than simply claiming that he’s wrong.

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Born Again Fiscal Virgins #nlpoli #cdnpoli

Premier Kathy Dunderdale is singing the usual Tory song before contract negotiations and a provincial budget. 

Yes, folks, in a speech to the St. John’s Board of Trade the Premier was talking about the need to control spending.

We’ve all been down this road before.  Of course, the same people who talk the talk don’t walk the walk.  They’ve been the ones who caused the current fiscal problems the Premier was talking about. 

In this corner, your humble e-scribbler has been warning about the Tory fiscal imprudence since 2006.  It’s one they’ve acknowledged being vaguely aware of since about 2008, at least.  That’s when the Auditor General  of the day warned about it. In 2009, the finance minister and the Premier of the day admitted their spending was unsustainable.

And yet they continued to crank up spending to record levels.

So basically there is nothing in Kathy Dunderdale’s speech on Tuesday that the Tories haven’t said before.  Kathy Dunderdale’s strategy to deal with the problems she and her colleagues created is the same one the Tories have talked about since 2003.  And that’s the one that created the problem she claims she wants to fix.

Think of it like make-work for politicians.  First, you create a problem. Second, announce that you plan to tackle the problem.  Third, tell everyone the strategy you will use is to follow all the policies that caused the problem in the first place.  Repeat annually as needed.

Anyway, just look at one part of the speech if you want to know how seriously out of touch with reality a politician can be:

What is the best fiscal policy response in the face of this reality? Some may suggest that a balanced budget is the best goal in order to avoid taking on debt. However, this would require a dramatic reduction of spending.

If they can’t balance the budget without a dramatic reduction in spending then they are already spending way more than they are bringing in.

D’uh!

So if you are spending beyond your means – and don’t stop -  you cannot really get spending under control, reduce public debt and all the others things that genuinely responsible governments do.

And if you reject balanced budgets because it would mean spending cuts, then obviously you just aren’t serious about all that talk of spending cuts, controls or that thing called fiscal prudence.

After eight years, the unions know all about the born again fiscal virgins.  They aren’t fooling anyone.

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Hebron, the Lower Churchill and Local Benefits #nlpoli #cdnpoli

Apparently, this whole Hebron work thing is much ado about nothing.

Premier Kathy Dunderdale spent some time Monday afternoon chatting with On the Go’s Ted Blades about a recent decision by Kiewit to take a pass bidding on a second topsides module for the Hebron project.

Labour was tight. The company was having trouble delivering on time and on budget.
 
At one point, the Premier said there would be more work.  The size of the topsides has apparently gone from the original estimate of 11,000 tons to 18,000 tons.

So, sez the Premier, there’ll be 18,000 tons of work.

You know, that’s something that always puzzled humble e-scribblers.  When people say there’s tons of work, now you know what they mean.  Don’t look for the number of people on the job.  Forget the number of hours of labour.

Work now is measured in tons.

You cannot make this stuff up.

You wouldn’t.

You’d be afraid to make something like that up because people would never believe that the Premier of the province could say such a thing.

But she did.

Dunderdale also tried to claim that the crowd what has been running the place since 2003 were the first ones to copper-fasten the amount of work to be done locally on an offshore project.  Others, she said, had settled for “best efforts.” 

Kathy didn’t say copper-fasten but that’s one of her favourite little bits of meaningless jargon.  Like referring to something as a piece.  Like the Hebron piece.  Or the Kiewit piece.

But anyway, first time for nailing stuff down right to the gram or work that had to be done in the province.

All that would be wonderful, of course.

Splendiferous even, except that it isn’t true.

Construction of the gravity base for the project was always going to be done in Newfoundland.  That’s the cheapest way to do things.  The provincial government didn’t get anything there they didn’t already have going into the meeting.

And then there is a bunch of small time stuff like a tube called the flare boom. Low tech metal bashing, for sure, and again, nothing of any difficulty to get done in someone’s back yard welding shop.

But the topsides modules, utilities and process module and other big stuff covered in Sections 5.5 B, C,and D of the benefits agreement, well those are all subject to conditions. The conditions are secret. They are considered to be commercially sensitive.

They are not copper-fastened at all.

As for the rest of the project, the Hebron final agreement has more than a few give-aways in it. 
The companies got a huge break on financing research and development.  Kathy and her former boss let the companies skate with a pittance of a cash commitment compared to what the offshore regulatory board rules required.

On royalties, Kathy and her old boss gave the companies a break up front as well.  Instead of an escalating percentage of revenue, Kathy and Danny gifted the companies with a flat one percent for as long as it takes to pay off the project development costs.

When Roger Grimes talked about such an idea, back when oil prices were forecast to stay low forever, Danny tore great strips off Grimes’ hide.  As it turned out Danny gave the oil companies a gigantic break when prices were high.  And Kathy Dunderdale totted out in front of the cameras to tell news media it was a way of giving the oil companies some protection against changes in oil prices.

Just think about that, in hindsight.  Back then  - in 2008  - Kathy was running to protect oil companies against the chance oil prices might drop. 

The poor old multinational multi-trillionaire oil companies. 

Too fragile to take the risk.

A couple of years later – in 2010 – oil prices were going to be high forever.  That is the justification for Muskrat Falls. And what about protecting taxpayers from the possibility oil prices might fall?  Out trots Kathy and then Shawn and now Jerome to say there’s no chance of that happening.

And so the taxpayers of Newfoundland and Labrador, the people who own the oil and gas and the water, having given the oil companies a break must now dig ever deeper into their own pockets to ensure their electricity prices are high. Nova Scotians, meanwhile, will get their power for free, except for three months of the year when Muskrat apparently can’t deliver the juice.

Not much of a local benefit in that. Sure,  Tory supporters will tell you all about what Danny got in exchange.  Like equity stakes.

Hang on a second.

Equity.

No small irony that the two big issues in the province are the Lower Churchill on the one hand and Hebron on the other.  Those equity stakes, including the one in Hebron, were always about one thing:  financing the Lower Churchill. Local benefits were entirely secondary. 

Don’t believe it?

Williams broke off Hebron talks in 2006 because he couldn’t get an equity stake.  Nothing else.  After 18 months of public pissing matches and private suck jobs, Williams  got a deal on Hebron. 

But he didn’t pick up any local benefits that weren’t already on the table in 2006.  The so-called super-
royalty won’t add much beyond what the province would have received under the same royalty regime that is delivering in spades on projects like Hibernia and Terra Nova and White Rose.

Equity was the thing.

The first thing.

The most important thing.

So important that Danny even told Arnold about it:

The Premier also discussed the province's Energy Plan objective of using non-renewable resource revenues to fuel a future based on renewable sources of energy.

At times like this, it is always interesting to go back and see what was running around at the time.  This time look at August 2007 and the rather convenient election announcement of a Hebron deal:

6. Shortage of workers means shortage of work.   

In the last round of negotiations, the provincial  government insisted that any work that could be done in Newfoundland and Labrador had to be done there or the companies would pay a penalty. Reportedly, the companies noted that Long Harbour plus the Lower Churchill would outstrip the local labour and engineering pool making it almost impossible to complete Hebron using only local resources.

Cancellation of Hebron last year meant that workers who would have started work on Hebron have already headed west to the higher wages of Alberta. That made the predicted situation worse, not better and therefore will make it harder for the province to stick with that bargaining point. 

Expect that provincial demand to drop off the table or for Hebron to get preference over the Lower Churchill. Otherwise, the cost of the project will be forced up.

Your humble e-scribbler had plenty of people from the local oil and gas community point that out.  The companies talked about labour force shortages and costs, they said. The final Hebron agreement reflected the limited capacity in the local market to do some of the bigger components for Hebron.  The only things the companies had to do here was what they absolutely had no choice but do here.

Not surprisingly, that old demand for guaranteed local benefits or suffer a penalty disappeared.

And equally unsurprisingly, the provincial government’s news release talked up the GBS and the small stuff – “outstanding local benefits” – but only after they played up the equity.

Makes you wonder why Kathy Dunderdale is talking about Kiewit and Marystown like it was some kind of surprise to her.  She’s known about the whole thing from the beginning:  Hebron, the Lower Churchill, jobs, local benefits and the equity.

The equity.

It’s always been about the equity. That’s what ties it all together.

- srbp -

Cleary on the Move #nlpoli #cdnpoli

Noob Bloc-NDP member of parliament Ryan Cleary is on the move.

Backwards.

In the most recent seating plan for the House of Commons, Cleary’s seat goes all the way down the opposition side of the House down to the seats right next to the Tories, up in the back row.

The orange arrow shows how far he’s been shuffled.

There are a handful of Conservatives on the opposition side because there aren’t enough seats for all the Tories over on the side normally reserved for government members.

Ryan’s new digs are in the same desk pairing as an independent member of the House.

If you want to get a sense of direction, the Speaker would be towards the bottom of this seating plan.  The government benches are to the right.  The only thing between Ryan’s new seat and the hall outside the House is not much more than a curtain.

- srbp -

Muskrat Falls: more pesky details #nlpoli #cdnpoli

Tom Adams’ blog post is attracting much attention in Newfoundland and Labrador on Monday.

No surprise in that, given that Adams’ did some calculations of water flows and came to the conclusion that for at least part of the year, Muskrat Falls wouldn’t be able to meet its commitments to ship electricity to Nova Scotia.

But Adams hit such a nerve that Nalcor boss Ed Martin posted a comment on his own corporate blog that purports to correct Adams’ inaccurate comments.

Martin doesn’t really provide anything concrete.  He just points to the mass of stuff filed with the public utilities board.  Some of it comes from the best minds available, donchyaknow. Lots of well worn lines but nothing that specifically refutes anything Adams said.

And then Martin points to the water management agreement imposed by the public utilities board on Nalcor and Churchill Falls (Labrador) Corporation in 2009:

I’m not sure if you are aware of legislation in our province that requires a water management agreement to be in place between Nalcor and Churchill Falls (Labrador) Corporation (Churchill Falls). The legislation requires the two power producers to use available storage, primarily in the Churchill Falls reservoir, and their respective generating facilities to optimize the production of power while maintaining the contractual obligations of Churchill Falls to its customers.

The first sentence is a bit condescending but look at the last bit:  “optimize the production” while maintaining the contractual obligations of Churchill Falls to its customers.”

Priority for Churchill Falls

Not exactly.

Clauses 3.1 and 3.2 of the water management agreement give Churchill Falls customers more than an equal status with Muskrat Falls.

While we can’t be sure Martin is aware of the actual words in the water management agreement and their implications, here they are for greater certainty:

3.1 No Adverse Effect

The parties acknowledge that pursuant to Section 5.7 of the Act, nothing in this Agreement shall adversely affect a provision of a contract for the supply of Power and Energy entered into by a Supplier and a third party prior to this Agreement, or a renewal of that contract (collectively "Prior Power Contracts"), and that all provisions of this Agreement and ancillary documents and agreements shall be interpreted accordingly.

3.2 Acknowledgement of Prior Power Contracts

The Suppliers acknowledge that the following are the sole contracts for the supply of Power and Energy entered into by a Supplier and a third party prior to this Agreement:

(a) the power contract entered into between Hydro-Quebec and CF(L)Co dated May 12, 1969 as well as Schedule III of such power contract which relates to its
renewal (the "HQ Power Contract" );

(b) the Churchill Falls Guaranteed Winter Availability Contract between Hydro-Quebec and CF(L)Co dated November 1, 1998, as amended on March 29, 2000;

(c) the sublease entered into between Twin Falls Power Corporation Limited and CF(L)Co dated November 15, 1961, as amended on April 15, 1963, November 30,
1967 and July 1, 1974 and renewed pursuant to an agreement dated June 9, 1989,and the operating lease between the same parties dated November 30, 1967, as
amended on July 1, 1974 and November 10, 1981; and,

(d) the power contract entered into between Newfoundland and Labrador Hydro-Electric Corporation and CF(L)Co dated March 9, 1998, as amended on April 1, 2009.

Note the reference to section 5.7 of the Electrical Power Control Act, 1994. That was part of a package of amendments to the EPCA then-natural resources minister Kathy Dunderdale rammed through the House of Assembly on the second last and last day of the spring 2007 session.

Provision of an agreement void

5.7 A provision of an agreement referred to in section 5.4 or 5.5 shall not adversely affect a provision of a contract for the supply of power entered into by a person bound by the agreement and a third party that was entered into before the agreement under section 5.4 or 5.5 was entered into or established, or a renewal of that contract.

During the very brief discussion in the House – it wasn’t a debate by any means - Dunderdale mentioned this clause specifically:

The amendment will ensure the delivery commitments under existing contracts are honoured, including the 1969 power contract for the Upper Churchill. This protection is explicitly written into the amendment.

When you look at the details,  it’s pretty clear that the water management agreement gives priority to any demands related to Churchill Falls.  As long as there’s enough water and there is no conflict, everything on the river will be fine.

But what happens when the water flows needed at Muskrat Falls don’t match with the needs of Churchill Falls?  Well, Muskrat loses every time. 

This is something that the current administration voted for in 2007.  It’s included in the 2009 water management agreement.

No dispute on Nova Scotia?

With that firmly in your brain, go back and read Ed Martin’s blog post again.

Notice what’s missing.

At no point does Martin mention the problem of delivering electricity to Nova Scotia in the peak winter demand months of January to March.  Churchill Falls will be cranking water down stream to run Muskrat Falls so water management is not an issue.

The problem Tom Adams identified is that Muskrat Falls likely won’t crank out enough electricity to feed the entire island in place of Holyrood and ship electricity to Nova Scotia at the same time.

Surely if Nalcor wanted to specifically refute Adams, they’d have mentioned that big issue specifically.

- srbp -

I am my own grandpa, legal version #nlpoli

This one seems tailor-made for the legal geniuses who came up with the ;aw in this province that allows you to vote in an election that doesn’t exist to fill a vacancy the legislature that doesn’t exist either at the time you vote.

An inmate in a state prison in the United States sued himself for violating his own civil rights. 

You have to read the story to discover that the real point of the suit was to try and get cash from the state.  The inmate contended the state would have to pay for the violation since the inmate  - being an inmate - was a ward of the state.

The judge tossed the case because it was “ludicrous”.

- srbp -

Nalcor will have problems supplying MF power to Nova Scotia? #nlpoli #cdnpoli

Energy analyst Tom Adams has an interesting observation on why Nalcor and Emera are having a hard time finishing their agreement.

Adams believes that a detailed analysis of Muskrat Falls generating capacity and electricity demand will create a situation where “Nova Scotia gets nothing or close to nothing when customers there need it most.”  [Emphasis in original]

As Adams lays it out:

During the times of the year when Holyrood would have been running near capacity, all on-island generation [in Newfoundland] will be running flat-out (as it does today) and Muskrat Falls will not be able to supply enough power to move any significant amount of power to Nova Scotia. This is because in Jan./Feb./Mar. the maximum output of Muskrat Falls will be about 500 MW due to the seasonality of water flow. This maximum output is after taking into account the operation of the Upper Churchill facility upstream which is contractually bound to maximize winter production for sales to Quebec.

Hang on, some of you will be saying.  Adams has left out 324 megawatts.  He mentions 500 MW but the Muskrat Falls dam is supposed to produce 824 MW.

Yeah, well, not really according to Adams.

Adams took a closer look at information Nalcor supplied to the public utilities board.  Adams believes that the Nalcor information presents an ideal scenario.  In actual operation,  Adams believes the plant will crank out 577 MW.  According to Adams, “this corresponds to 5.05 TWh of production — i.e. pretty close to the [official] project estimate of 4.9 TWh of production.”

In the summer months,  Nalcor won’t have any trouble meeting its commitments to ship free electricity to Nova Scotia.  There’s plenty readily available on the island from the surplus generating capacity in central Newfoundland. 

Interesting idea.

Would explain a lot, too.

- srbp -

Cost over-runs: Manitoba #nlpoli

Want to know how far off cost estimates can be for a project like Muskrat Falls?

Look no further than Manitoba where the same people who reviewing Muskrat falls for the public utilities board are in spot of bother over plans and costs and what consumers will wind up getting nailed for:

Keeyask is a 600-megawatt generating station and Conawapa is 1,360 megawatts. In comparison, the 1,340-megawatt Limestone generating station was completed in 1990 at a cost of $1.43 billion. Conawapa's cost is 5.5 times higher.

The cost of the nearly complete Wuskwatim generating station has risen from the 2004 estimate of $900 million to $1.6 billion, an astonishing 78 per cent, and shows the higher cost estimates for the proposed projects are valid.

American demand is down. 

Natural gas prices are in free-fall according to the article linked above, and as such, the price for electricity from natural gas is dropping along with it.

Anyone who thinks Muskrat Falls is somehow immune from all those considerations is just being naive.

But rest assured we are covered.  Nalcor has a 15% cost over-run built into its cost estimate of $5.0 billion for the Muskrat Falls dam and power line to St. Jawns. 

15% is greater than 78% isn’t it?

Didn’t think so.

- srbp -