News keeps getting Worse! Muskrat Exports?

Below please find an excerpt from a recent Globe and Mail article: Should we continue to ignore this?

This “over my dead body” attitude from a former engineer and environmentalist made Natural Resource Minister is emblematic of what former Parti Québécois premier Bouchard refers to as the “new religion” of Quebec. In a province where the gas industry’s first and often tactless developments have divided the population, gas wells – and even hydroelectric dams – have come to symbolize man’s self-destructive appetite for energy, at the expense of land, water and air.

It is a fine debate. Yet for all its sociological, environmental and economic considerations, it is somewhat vain. The valve on Quebec’s gas industry is shut for a foreseeable future that extends well beyond the current ban on gas exploration – which will last until environmental studies are completed, by 2014. Blame it on the shale gas boom in the United States. Blame it on the low gas prices that have ensued.

And the consequences of these depressed prices are felt not only by the province’s nascent gas industry, which had already drilled before the ban some 30 wells in Quebec in the hopes of creating a 5,000- to 19,000-job industry.

They also hurt the venerable Hydro-Québec, the state-owned electricity producer that has seen its export revenues since 2008 melt even as it is pumping more electricity into the northeastern U.S., its main export market. Gas-powered thermal electricity plants are heating up Hydro-Québec’s competition.

The price of natural gas has rebounded in recent months after it cratered in April under $2 (U.S.) per million British thermal units (BTU). As gas prices rise while the mercury falls on the eve of the winter heating season, it now trades close to $3.50 per million BTU in New York. However, Quebec’s gas industry estimated in earlier public hearings that the price of gas needs to trade between $5 and $6 for it to cover its production and delivery costs.

Even if gas-powered plants replace coal plants, even if diesel trucks are converted to gas, it will likely take a decade before the increased demand allows the price of natural gas to rebound significantly – it spiked at close to $9 in 2008. Quebec’s main gas distributor, Gaz Métro, expects prices to hover around $5 for the next 10 years. Jean-Thomas Bernard, guest lecturer at the University of Ottawa’s faculty of economics and an energy expert, thinks the depressed prices could even last 15 years.
This presents a headache for Hydro-Québec, which is already swarming with electricity surpluses as the recession weighs on industrial demand, especially from the pulp and paper mills that are in the midst of a structural downturn. And the problem will only be made worse as the state-owned electricity producer brings new capacity into service.

The complex project Eastmain-1-A-Sarcelle-Rupert, which includes the construction of two plants, four dams and the diversion of the Rupert River in the James Bay region, will add 8.7 terawatt-hours of electricity production. The Romaine hydroelectric complex in the Côte-Nord region will add another eight TWh on average a year.

Hydro-Québec‘s electricity exports have steadily gone up since 2007 to 26.8 TWh from 19.6 TWh. Yet as electricity prices have fallen while the Canadian dollar has shot up, the revenues the state producer collects from these out-of-province sales have gone down – although they slightly rebounded in 2011. The trend has continued in the first quarter of 2012: The year-over-year exports shortfall accounts for Hydro-Québec’s 28 per cent drop in revenue and 18 per cent reduction in profit.
And with any fall in Hydro-Québec’s profits comes a reduction to the dividend it pays the government, as 75 per cent of its profit are funnelled to Quebec.

To paraphrase the title of an acclaimed Louis Bélanger film, Quebec is suffering a severe case of “Gaz Bar Blues.”

So as Western Canadian energy producers are lamenting the surge in U.S. shale gas and oil production, which are threatening their exports south of the border, this time around, they will find a sympathetic ear in Quebec.

Minister Darin King's Fishy News Release

Below please find the News Release by Minister of Fisheries and Aquaculture - Darin King.

I will highlight the concerns that I have with the statement. It looks like a public to and fro to demonstrate that the government is "protecting" our assets and people - but will the outcome at the end if the process give OCI what they want?

This looks like nothing more than a charade. I therefore will expect that OCI will attempt to pay off the people making noise by coming up with a package. King actually makes the complete case for OCI - and presents why OCI is having problems and how they understand this. If I were to guess I would suggest that what we were looking at here is exactly the deal that has been cut already with OCI. That's my take. Let's see what transpires. Export away - just not today.

 

Ocean Choice International’s Redfish and Yellowtail
Proposals Rejected by Provincial Government

After an extensive evaluation and review, the Provincial Government announced today that it is not satisfied that the redfish and yellowtail proposals presented by Ocean Choice International (OCI) provide the maximum possible benefit for the province.

“The Provincial Government sees no other option but to reject the groundfish proposals submitted by Ocean Choice International,” said the Honoruable Darin King, Minister of Fisheries and Aquaculture. “This decision is based on consideration for what is in the best interest of the people of this province. Government wanted to secure a long-term commitment on former Fishery Products International quotas. These quotas are currently held between the province and OCI, through the Quota Holdco agreement established in 2007. We also sought enhanced benefits in relation to Fortune, and adequate support for displaced workers at Marystown and Port Union.”

On January 25, the Provincial Government met with officials from Ocean Choice International and clearly outlined its position in relation to the proposals. Unfortunately, the company showed no flexibility at that time. The company was given time to reconsider but has not come forth with a revised proposal to date. 

“We recognize that this is a difficult situation for OCI,” said Minister King. “Their predecessors, Fishery Products International, faced similar challenges and had comparable financial results. The economic circumstances for yellowtail and redfish remain challenging, particularly with the appreciation of the Canadian dollar and high fuel costs.” 

OCI’s financial circumstances for groundfish operations have been independently verified by the financial consulting firm Deloitte. The market outlook for redfish and flatfish has also been independently verified by the McDowell Group, a research-based consulting firm. The McDowell Group report can be found at http://www.fishaq.gov.nl.ca/publications/nl_flounder_and_redfish_report.pdf.

The Provincial Government requested 10 million pounds of flatfish to be processed in Fortune which is marginal compared to the overall global harvest of 750,000 tonnes. The Provincial Government’s analysis shows that the overall groundfish operation will achieve positive, albeit modest earnings before interest, taxes, depreciation, and amortization.

Secondly, OCI indicated the desire to have the landing obligations associated with the company’s licence extinguished when the Quota Holdco agreement is due for renewal in approximately five years. While the Provincial Government is willing to consider multi-year exemptions, it believes that under the current circumstances it is possible that quotas would be lost to the province entirely and the resource could be landed elsewhere without any value to the people of Newfoundland and Labrador.

Minister King also noted today that he is disappointed that no action has been taken for displaced workers with regards to the Provincial Government’s request for the company to provide a top-up to the current Fish Plant Worker Employment Support Program. The company and the union have not met to advance these discussions.

“The Provincial Government’s analysis shows positive results by moving yellowtail production to Fortune and an export exemption being granted for the remainder of yellowtail landings and redfish,” said Minister King. “However, given the current circumstances, I have no choice but to reject OCI’s proposals. While government recognizes that reorganization and rationalization in the fishing industry is essential to our long-term success, we will continue to ensure the best possible outcome for the province for the present and for the future. Our government remains receptive if OCI wishes to reconsider their position.”

- 30 - 

OCI and Advice to Minister King

Below is a letter to Fisheries Minister Darin King from the Fisheries Community Alliance

January25th/2012

Hon.Darin King,

Minister of Fisheries and Aquaculture,

St. John's, NL

Dear Minister,

                       Over the last few weeks the request of OCI to export unprocessed fish and the expected response of our Government have occupied the minds of fishery participants in the Province. We understand your decision will be made public in the near future and we therefore wish to consolidate the views of the Fisheries Community Alliance on the subject and inform the Minister accordingly.

1)  Following detailed discussions with marketing experts in Europe, North America and Asia we have identified the current state of resources in various fish exporting countries and the demands of the main importers and exporters of fish products by species in those countries. There is no doubt there is a market for round fish for direct consumption in Asia, especially for small, undersized round fish. But that market has existed for the centuries. There is also a market for large fish that is processed into finished products for the US or EU market and the value of which is increased through injection of 15/20 percent water into fillets. We can provide you with the formula used in

Asia.

2) The quality of exports of Asian seafood products is now being seriously questioned by US authorities and a US Senate Committee is about to be formed to deal with problem.

3) There was and still is a very strong market for processed primary and secondary fishery products in Europe, the US, Canada, Asia and some South American Countries. There are well over a one and half billion people in those countries who are sophisticated seafood consumers paying prices far exceeding  those in China or Vietnam. There should not be a problem in that market to sell a miniscule quantity of yellowtail fillets if a N&L fish exporter had an effective marketing and sales

organization.

4) The Deloitte verification of OCI losses must be further investigated. Not as far as its accuracy is concerned but the question is, does it include the costs of its FFT harvesting, landing frozen fillets in Bay Roberts and later trucking to Marystown plant. Then having thawed the fish, processed it in the largest and most expensive plant in N&L in terms of fixed costs, the operators surely had to know it would be difficult to compete with harvesting by an efficient wet-fish trawler and processing in a smaller and far less expensive plant. This would have avoided exporting badly needed N&L processing jobs.

5) Exporting unprocessed  fish by OCI will result in a mass demand by all harvesters to export their catch and the resultant loss of thousands of plant processing jobs. That loss will be permanent and we will lose the processing expertize that has taken 70 years to develop and train those workers.

6) The growing export of unprocessed fish which includes an increased percentage of small, undersized fish will destroy any hope whatever of rebuilding our once huge groundfishery.  It is an undeniable fact that without restoration of the groundfishery fishing communities in N&L will not survive. Federal and Provincial authorities by granting the licenses to export large and small, undersized fish are contributing to the demise of the N&L fishery. The Province must take a leadership role in stopping this activity and seriously promoting the resource rebuilding process by confronting the Canadian Government on major issues being discussed in the Free Trade negotiations with the EU, NAFO fisheries mismanagement and DFO reduction in N&L fisheries management

responsibilities and particularly in the area of fishery science capability and the retention of necessary top level scientists and technologists.

We sincerely hope our Government will take into consideration the major impact the continuation of exports of unprocessed fish will have on the fishing population of N&L. We, the members of the Fisheries Community Alliance are convinced it will eventually destroy what's left of our diminishing resource and the survival of many N&L fishing communities.

Yours very truly,
Gus Etchegary

Chair

Fisheries Community Alliance.

You want to debate the Emera project Kathy? Ed? Shawn? Are you sure?

WHAT DOES THIS MEAN TO YOU?

Now are we all willing to take a look at the chart above produced by  EDC?

When we talk about sending out raw energy versus refined product - in the case of oil and gas and in the case of using hydro-power for industry - we might start to recognize some very strange things. That is - strange to Premier Dunderdale, Minister Shawn Skinner and the rest of the geniuses on the hill.

Just curious Newfoundland and Labrador - how is it that New Brunswick is ahead of this province in exports? We do all realize the resources we have - right? Oil, gas, fishery, hydropower, forestry, iron ore, nickel, and others. Now what do we have to show for it in value? Look at New Brunswick - they don't have our oil, our 5000 MW's, our fishery, not even minerals in such quantities and quality such as iron ore and nickel.

You want the answer?

The opening of the Saint John LNG regasification plant in September 2009 will provide a significant boost to exports in both 2010 and 2011, as production ramps up and industrial production in New England recovers. However, most of the increase in energy export earnings this year will be due to higher prices for refined petroleum products, as the price of crude rises to an average of USD 77/brl in 2010 from USD 62 in 2009.

Oh my - we have the oil right? They refine it right? What we need to do now - according to Ed Martin, Shawn Skinner, and Premier Dunderdale is to ship them some more cheap reliable renewable power. That should help them pick up some more industrial development - maybe they can refine and process more resources. Anything else the gang would like to give them?

WE GOT IT - WE GOT IT  yep we got it all right. So are we allowed to refine our own oil and gas yet? No that's right it actually belongs to Canada - we can have royalties which Ottawa can then strip back - and oh yes - that's right New Brunswick and Quebec would have to exceed their refining capacity in order for us to be able to. Or is it that Irving controls that roost?

Well then in the name of growing a strong Atlantic Canada - the least we could do is throw some of that unrefined energy (that is we don't plug it into anything here) over to Nova Scotia - with any luck the Minister of Natural Resources of Newfoundland and Labrador can be hailed as the fellow who helped Nova Scotia along with it's lagging exports.

While we are at it - that much bashed (by Canada lovers) Iceland - the home to 250,000 souls - as Shawn Skinner would say - is looking at exports exceeding 5 billion - a billion of which for seafood - the majority of which is ground fish. Very healthy Atlantic cod stocks. You got to love the nice exports of aluminum. They are humming away - plugging in every industry they can attract with hydro power. Their exports are up 21% in January over the same period last year.

Not to worry because Newfoundland and Labrador has the fish right? Well no - we are third behind British Columbia and Nova Scotia - oh yeah that's right - the king cod is lost in Ottawa somewhere and we are missing a billion dollars a year. Shawn get that power to Nova Scotia quick - with our fisheries planning they are going to have to increase processing in that province - just as soon as our people are forced out.


BRITISH COLUMBIA:

• Canada’s top exporter of fish and seafood, valued at $882.8 million.
• Exported 162,834 tonnes (t) of fish and seafood products.
• The three most valuable species exported by this province were farmed Atlantic salmon (49,543 t valued at $330.9 million), herring (3,470 t valued at $57.6 million), and crab  (5,862 t valued at $54.5 million).

NOVA SCOTIA:

• Canada’s second leading exporter of fish and seafood, valued at $809.7 million.
• Exported 111,454 t of fish and seafood products.
• The three most valuable species exported by this province were lobster (23,065 t valued at $353.8 million), scallops (4,946 t valued at $88.4 million), and snow/queen crab (8,519 t valued at $72.8 million).

NEWFOUNDLAND AND LABRADOR:

• Canada’s third leading exporter of fish and seafood, valued at $720.5 million.
• Exported 167,691 t of fish and seafood products.
• The three most valuable species exported by this province were snow/queen crab (31,571 t valued at $270.3 million), shrimp/prawn (52,384 t valued at $191.1 million), and mackerel (22,981 t valued at $37.2 million)

Now if we really try we can help out our "have not" partners in Ontario - they are planning to lead export growth driven by the automotive sector. How did that happen? Oh yeah we "bailed out" that sector after corporate fraud just about crushed the markets - from the USA outwards. They could really use our power and with any luck - we can help them get back to the "have side".

Maybe Ontario can get to experience a 12.4% unemployment rate instead of that backward 8%  or even worse Iceland's 7%.

Ed Martin called the Lower Churchill "low hanging fruit" in Ontario - I guess he meant it.

You wonder why - I sit and scratch my head - at our government's insistence at getting the power out of  Labrador at all costs? This valuable resource that means industrial advantage - only if we keep it here. If Ed Martin is right and Canada will be short 14,400 MW's of power by 2030 - this Lower Churchill power should be kept in Labrador at all costs. Just curious Ed - why is so much more power going to be needed? Increase in Canadian population and industry? How much of that growth are you predicting for this province? Oh - you must not be predicting growth for here - you did not say we would be short - that means we would have to attract significant industry which would attract back home significant Newfoundlanders and Labradorians that left to find WORK.

I would like to see our exports increase significantly in the fourth quarter - I have dozens of politicians available to be shipped to your jurisdiction. Any takers?