“There are no discussions between this government and the Quebec government.”
That’s part of a statement sent out by email to local reporters from natural resources minister Siobhan Coady’s office. You can’t find it on the government website or the party website. Coady was responding to a release from provincial Conservative leader Paul Davis challenging Dwight Ball to state the administration’s plans for the province’s hydro resources in Labrador.
Words matter. No one has suggested that the two governments were talking about anything. The talks would take place between Nalcor and Hydro-Quebec and, whether we take Nalcor boss Stan Marshall’s own words or the local scuttlebutt, the talks are going on between the two companies.
They can’t dodge a wrench, either
Coady and Premier Dwight Ball need to stop playing dodge-fact. They suck at it.
Coady’s misleading denial is the same as Ball’s deceptive statement mentioned in yesterday’s post that there are “no talks about Hydro-Quebec taking over Muskrat Falls.”
No one said anything about HQ “taking over” Muskrat Falls then or now. The rumble around town is that Nalcor and HQ are in talks that would see HQ taking a major role in an expanding Lower Churchill project.
To really signal the administration’s her difficulty with a simple, true statement, Coady tried to claim the Tories were “fearmongering.” That just comes across as looks silly. The simple truth is that if Nalcor and HQ weren’t talking, both Coady and Ball would have said precisely that. Based on the way Ball and Coady are carrying on, we know something’s up. We should be even more concerned given the fact that – yet again – Coady and Ball prefer to be cute rather than make simple statements that deal directly with the issue.
Constable Clueless Strikes Again
As for the Conservatives, they don’t get off much better in the fact department. Davis’ statement said that the “Muskrat Falls project was designed to end Quebec’s longstanding stranglehold on our hydro exports by creating a new route through the Maritimes to give our province new leverage after Quebec played hardball for decades, costing us enormous amounts of potential revenue a year,.”
That was what Danny Williams claimed in 2010 but, as Williams surely knew at the time and Davis should know now, it just isn’t true. Changes to American trade rules in the late 1990s made it impossible for Quebec to trade electricity into the United States without opening up their grid to competition. They did, which is how Nalcor was able to sell electricity to Emera starting in 2009. In fact, when Williams announced the deal in 2009 he said that the deal proved the stranglehold was a thing of the past. Williams claimed the Muskrat deal with Emera broke the stranglehold, but it wasn’t true then and it isn’t true now.
The Road to Perdition
of hydro-electric development in Labrador since 1949 made it plain that by the late 1990s, two specific changes in the province’s situation brought us close to deal on Lower Churchill development. One change was the FERC rules on open access to transmission. That broke Quebec’s stranglehold on development by providing access to the shortest route between Labrador and potential, profitable markets. The second was the advent of oil production. Even at oil prices forecast in the early part of this century, oil royalties meant that Newfoundland and Labrador was no longer desperate to develop the Lower Churchill.
As a result, the primary obstacle to Labrador development became a combination of a market and transmission line capacity, not politics. Danny Williams brought superficial considerations – like politics – back into the equation. In the process, he failed to develop the Lower Churchill on a sound financial basis. He spent a lot of time trying to blame Hydro-Quebec for his failure to develop the Lower Churchill but in the end, simple economics made his project completely idiotic.
No one wanted the power because it was too expensive. But with a desperate political need – for Williams to leave open politics – Williams and Nalcor concocted the Muskrat Falls project as a way to solve a completely fictitious problem. They cooked up a wild scheme to force local taxpayers to cover all the costs of the least attractive option on the Lower Churchill.
Brian Tobin and Roger Grimes came as close as possible to developing the Lower Churchill successfully. They had a market for the power, interest in developing the transmission grid and, as it turned out, enough cash from oil to ensure the provincial government and its energy corporation could have covered any cost over-runs.
Sadly, that project went into the bin. Grimes’ successor had a solid proposal from Ontario and Quebec to provide a market for Lower Churchill power. Williams rejected it out-of-hand. Then he spent four years trying desperately to find someone to buy his dream. Williams failed.
And 12 years after the Grimes project died, we are over a barrel. We’ve maxed our credit with Ottawa. We owe perpetual megawatts to Nova Scotia, have no friends left in New Brunswick, can’t offer anything marketable to New England, and are essentially left to beg for assistance from Hydro Quebec.
It’s a sad position, made all the worse by the province’s politicians and their foolish political statements.
. . . → Read More: The Sir Robert Bond Papers: Grits and Cons play dodge-fact over Labrador hydro talks #nlpoli