MandaTORY Muskrat Material

What a difference it makes if you are a PC Opposition in Manitoba or a PC Government in Newfoundland and Labrador.

On the heels of the Quebec review of hydro project potentials - Manitoba Conservatives are asking the government there to put the brakes on hydro projects in that province.

But oh no - wait - that's Manitoba Hydro - didn't they do a review for us?

A quote from a story in the Winnipeg Sun

Progressive Conservative leader Brian Pallister said a recommendation made to Hydro-Quebec last week highlights a bleak economic outlook for such investments. A Quebec commission called on government to postpone or cancel a $6.5-billion, four-dam Romaine River hydroelectric project. The commission claimed a boom in cheap natural gas means the energy created by the project would sell for less than it costs to produce.

“This Quebec report should be a clear cause for reconsideration,” Pallister said.

Pallister labeled Manitoba Hydro’s expansion plans “a mega gamble” that would triple the Crown corporation’s debt. (emphasis added)

And yes it gets worse - the Manitoba government in its response to Opposition concerns said:

Stan Struthers, the minister responsible for Manitoba Hydro, was not available for comment Tuesday.

In a statement on his behalf, a spokesman said Manitoba continues to profit off export sales and secured more than $9 billion in such contracts since 2010.

“This means that from the first day (of the proposed $6.2-billion) Keeyask (generating station) goes into operation, U.S. customers will be paying down the debt on an asset that will generate clean electricity for a century — keeping rates low for Manitoba families and businesses,” (emphasis added) the statement said.

So the Manitoba Conservatives see the issue and the only comeback from the government is - who cares - because Americans will pay the bill and our customers will get cheap power.

So let's see now, we have weak markets, we are paying the bill, and out power rates will soar.

The Muskrat Falls development must be stopped. We cannot keep exposing our children and grandchildren to this disastrous legacy.

Take the time and read the story HERE - become engaged in this most important issue and let the leaders know how you fell.

But one last thing - the story says this: (please read carefully) Manitoba’s Public Utilities Board has hired eight independent firms to review the value of Hydro’s plans and ensure they’re economically viable.

Our project is the most studied in the world - right? Oh and yes - it's not Manitoba Hydro calling the shots it's their Public Utilities Board.

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.

A note from Dean MacDonald - More Beano Please!

"It is essential to the provincial economy that we maintain our relative competitiveness in energy pricing. Our options are now more limited with respect to new sources of competitively-priced generation to service Island requirements. With a relatively low growth forecast, we expect to meet the future energy requirements through a combination of small hydro developments and thermal power. Should differing circumstances emerge with respect to new capacity requirements, the challenge to maintain competitive electricity prices will increase. Of particular significance in the future for the Island portion of the province is whether natural gas may become an energy source for power generation."

The above quote is from none other than Dean MacDonald as Chair of Hydro in 1999.

This - of course - follows the 1990 forecasts where Hydro was wrong by predicting strong growth.

In 1999 after correcting for the errors of 1990 - they predicted a low growth - which according to Hydro today would have been wrong again.

So in 1999 Dean says low growth - but in the event they are wrong - look to natural gas.

So then in 2010 after apparently Hydro was wrong again - now we need power again.

All of these statements are factual and real. If history serves us right - we should expect the exact opposite to occur with respect to load growth and power needs.

So Dean wants us to rely on the Hydro experts - who failed him directly in the past. 

Again I ask about the personal portfolios of interested parties who support this Muskrat deal.

Big Oil - and their approval of Danny's Hydro Plan

BIG OIL BIG OIL BIG OIL BIG OIL BIG OIL

I am not one that is easily "con"vinced that Danny's fight with "big oil" is genuine and is without the express approval of "big oil".

Some people call that a conspiracy theory - others who have lived the damage that "big boys" can make when trying to promote their own agenda (who knows what it is other than more money) - would call the cynicism wise.

I will not take my eye off the ball - and that very bouncy sphere is "gas". I believe and have always done that Danny Williams and Dean MacDonald have a keen interest in natural gas. How they will ultimately fit into that sector - is yet to be known - but I can say my thoughts on this were solidified with the anxiety of the Premier to get Andy Wells in the top spot on the CNLOPB - and most recently the possibility that the gas royalty regime may be seperated from the energy plan for an earlier announcement. And then there is the LNG project getting the big ok by the government. (still watching that one)Oh yeah - Ed Martin - from "big oil" as the CEO of NLH.

Andy - was the mouth of FOGO (friends of gas onshore) several years back and that somewhat "odd" campaign had backers which are in our midst right now. Now gas onshore was never really explained - but one might assume that natural gas might be used to fire up Holyrood and other new sources of power in the coming decades. Now this initiative would have private backers - like let's say cable guru's (branching out) and would not be owned or developed by the people through Newfoundland and Labrador Hydro - instead it would be fed to the grid - we would pay for it and those "investors" would make a killing from it.

I do think if natural gas projects can be agreed to by "big oil" and the right investor group can get the gas onshore - the oil projects would not be held up very long. There would be a miraculous meeting of the "big oil" "big Premier" best minds in Newfoundland and Labrador - and a deal or deals would be struck.

What are the Premier's plans when he leaves office? What were and are his interests - some of which still held in blind trust?

More than anything these questions are for the "record". This discussion is for the "record".

I agree with leaving it in the ground until reasonable terms are reached for the people of this province. I don't however believe that the Premier and I are on the same mission.

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Okay so we know who they are - not Danny's gang - right?

They write exactly the Premier's message:

If approved, the dams at Muskrat Falls and Gull Island would produce 2,800 megawatts of electricity, enough to supply about 1.5 million homes.

Where were those homes again? Labrador?
How much industry would that power?