Here's to the crazy ones, the misfits, the rebels, the troublemakers, the
round pegs in the square holes... the ones who see things differently -- they're
not fond of rules... You can quote them, disagree with them, glorify or vilify
them, but the only thing you can't do is ignore them because they change
things... they push the human race forward, and while some may see them as the
crazy ones, we see genius, because the ones who are crazy enough to think that
they can change the world, are the ones who do.

Steve Jobs
US computer engineer & industrialist (1955 - 2011)

Friday, December 31, 2010

Leadership for Newfoundland and Labrador

Political leadership is the cornerstone of all societies. It can be used for the the good or the bad. It can take societies to the greatest heights or piles of rubble. We can view it in the warm comfort of hindsight, or see it up close in the chaotic financial meltdown of today. Either way, it surrounds us continuously. The big question is: What is political leadership and how can it work for us?

Leadership has many different components, depending on who is explaining it, but some of the main components are generally described as: Integrity; Energy; Self-belief; Vision; Decisiveness; Drive; Creativity; Communication; and Courage. I will add a modifier to vision - political foresight. Great leaders of recent history that we recognized as having these qualities include Winston Churchill, Martin Luther King, Gandhi, and so on. Great names associated with larger than life contributions. Many in this province would include our recent Premier Danny Williams as a great leader with the required qualities. It is easy to see by the small amount of names, compared to the great numbers of people, that these folks are extremely special and do not come around everyday.

Unfortunately, the problems do. In our case we have numerous historical and current problems that, as the saying goes, "keep on giving." The Upper and Lower Churchill, Old Harry oil, offshore drilling, boundary disputes, an aging population, a shrinking tax base, a large provincial debt, a destroyed fishing industry and the list could go on. A big part of leadership is knowing the past. Without knowing the past you cannot understand the future, and you are doomed to repeat the same mistakes. A good leader understands this, and uses those lessons to change the future for his people.

A good leader understands the roots of issues, and communicates those to his people. Together they take the journey, and together they finish it. A good leader understands that he is nothing without the people, and that their well-being is his mission. A good leader places himself last and the people first, at all times, and demands the same of those that work for and with him. A good leader makes sure justice is not just seen to be done, but is done.

In the Newfoundland and Labrador context it means changing historical wrongs, and setting new courses for the future. It means rewriting the Upper Churchill agreement, building the Lower Churchill, affixing maritime boundaries to exploit the Old Harry oil field, getting the best possible return for our resources, expanding our economy, building our infrastructure, increasing our population, eliminating our debt, breathing new life into our fishing industry, and fending off the wolves. Any leader of Newfoundland and Labrador can expect to be challenged from within and from without by those who seek their own self-interest, and could care less about the consequences for us. That has been a historical fact, and remains true to this day. Any leader of this province must therefore be reinforced with a powerful courage of conviction.

The next leader must be able to deal with Quebec and Ottawa, and withstand an incredible amount of pressure in order to successfully achieve this province's goals. That kind of leadership requires the ability to project yourself onto the national scene, and achieve a very divisive victory, without ripping the country apart in the process. The ability to fight in the trenches and in the end ... diplomacy. Our leadership in this respect has normally achieved one or the other of these qualities, but not normally both. It is absolutely critical to our future that this be handled properly. However, should it not be possible to do so, the leader must have the courage of conviction to look after this province's interests first. In other words, the quality of an extremely thick skin will be necessary.

Once it is all over, and the challenges have been met, the future direction of the province will take shape. Leadership will then be required to set priorities on spending in a post-debt era. What do we value the most? Is it a low tax, low debt, and minimal government society? Is it a high tax, low debt, government stimulated society? These are issues for the future, though not too distant future. They will require a leadership that is open to the cultural and societal needs of this province.

Perhaps the most elusive quality of leadership today is humbleness. We live in the "me, me, me" era. The ability to listen to people, to take your guidance from them when they wish to give it, is absolutely necessary. Many leaders fail to understand that while you can not please all the people all the time, you must at a minimum please the silent majority. Be humble, open your ears and mind and listen to them. They will not let you down - don't let them down.

**caveat: his = his/her

Sunday, December 26, 2010

The Labrador Shuffle

The Labrador - Quebec border dispute has been resolved for 93 years. It was sent to the British Privy Council in 1927 by the then Dominion of Canada and the Colony of Newfoundland for binding arbitration. The dispute was initiated over logging rights between the two. In 1927 the Privy Council rendered the following decision:

... a line drawn due north from the eastern boundary of the bay or harbour of the Anse au Sablon as far as the fifty-second degree of north latitude, and from thence westward ... until it reaches the Romaine River, and then northward along the left or east bank of that river and its head waters to the source and from thence due northward to the crest of the watershed or height of land there, and from thence westward and northward along the crest of the watershed of the rivers flowing into the Atlantic Ocean until it reaches Cape Chidley.


The decision was clear enough, and is even added to Quebec's official road map, albeit in dotted lines and referred to in brackets as undetermined - see map below. In keeping with Quebec's major political commandment, "everything old is new - if we want it to be", she refuses to recognize this arbitrated decision. Instead, Quebec ignores the westward line of the 52nd degree of north latitude, and places that line much further north encompassing the head waters of the Romaine River - amongst others.
 
Quebec's strategic blind eye came into focus with the proposed construction of the four dam complex on the Romaine River by Hydro Quebec in 2008. The environmental agencies of the governments of Canada and Quebec conducted mandatory assessments of the impacts of the proposed dams. Yet, despite formal submissions and complaints by the government of Newfoundland and Labrador, the dams were given the go ahead - with conditions. Unfortunately, none of those conditions included recognizing the legitimate border of Newfoundland and Labrador. The government in St. John's was not even recognized by the Canadian government's own environmental agency as having jurisdiction over the area awarded in the 1927 decision.
 
This is unforgivable considering the wording of the Terms of Confederation between the Government of Canada and Newfoundland and Labrador, by which Newfoundland and Labrador agreed to enter into Canada:
 
TERMS OF UNION


UNION
1. On, from, and after the coming into force of these Terms (hereinafter referred to as the date of Union), Newfoundland shall form part of Canada and shall be a province thereof to be called and known as the Province of Newfoundland and Labrador.

2. The Province of Newfoundland and Labrador shall comprise the same territory as at the date of Union, that is to say, the island of Newfoundland and the islands adjacent thereto, the Coast of Labrador as delimited in the report delivered by the Judicial Committee of His Majesty's Privy Council on the first day of March, 1927, and approved by His Majesty in His Privy Council on the twenty-second day of March, 1927, and the islands adjacent to the said Coast of Labrador.


Not unlike the current federal government's refusal to force Quebec to negotiate a formal maritime border with this province prior to signing an offshore petroleum agreement, the Canadian Environmental Agency simply ignored Newfoundland and Labrador's constitutional rights. The reason - Quebec economic interests. The excuse - Quebec separation. Same as Old Harry is shaping up.

The only way to defeat the sacrificing of Newfoundland and Labrador is to be more determined and more creative than the collective will of Quebec City and Ottawa. It should not be the way it is in a country such as Canada, but it would be foolish to think otherwise. It is within our province's ability to successfully manage both challenges but, that aside, the Government of Canada must be reminded it is the national government and as such has the responsibility of applying the Constitution equally amongst it's citizens. To "cherry pick" the application of law is to invite deep discontent. A further question goes out to the Liberal and NDP members of the House of Commons representing Newfoundland and Labrador federally : Why are you not standing in the Commons and demanding that the federal government recognize the Terms of Confederation and thereby our proper border in Labrador? Why are you not standing in the House and demanding the federal government not grant an offshore petroleum board agreement with Quebec until the proper maritime borders are agreed to? The only federal representation coming from our Mp's seems to be MP Todd Russell who is surveying Labradorians as to whether or not they want the Lower Churchill project built - in seeming conflict with the provincial government here.

The unholy trinity of Quebec separatists, Quebec federalists, and the Federal government must be brought to the realization that Newfoundland and Labrador will not be pushed. Our previous Premier, Danny Williams, ferociously fought for that cause. To his undying credit he refused to let one undermining action go unchallenged as he likely knew all too well that to do so was to invite more of the same - at the cost of our province and her people. Our federal government needs to rediscover the fact that it is a national government, with national responsibilities, and national obligations. The first and foremost of those responsibilities is ensuring all Canadians are treated properly in accordance with their Constitution. To do otherwise is irresponsible, and places the future of the country in peril.


Government of Quebec Official Map - note their idea of the border and
maritime boundary. Actual Labrador border is the dotted line running east
and west on the 52nd.

Thursday, December 23, 2010

Separation Quebec's Best Insurance Policy?

When it comes to negotiating with Quebec on topics like the Upper Churchill, maritime boundaries, Old Harry, or even the upcoming talks on equalization payments, you need to know who and what your dealing with. The common refrain throughout Canada is that Quebec likes to have it both ways. In this article by Kevin Dougherty of the Montreal Gazette you will see that played out in their own words.

It goes back to my blog - Poker Quebec Style. The gullible will be eaten by the politicians of Quebec. There are just too many examples of that happening to ignore it. It is not being anti-Quebec. It's just reality. Newfoundland and Labrador requires the vision and courage of conviction to battle this mentality, and prevail in order to look after the welfare of our people and province. What the Quebec politicians in this story are saying is that if you don't follow our will, then we will tear down your house. They will bank on the media to turn public opinion in their favour, because to do otherwise would be to risk the country.

It is a blackmail of the lowest order. We in Newfoundland and Labrador will not sacrifice our people or province any further on the alter of pacifying Quebec. We did not enter Confederation to become the economic colony of Quebec. It's time for the Quebec government to look for a new insurance policy.

Sovereignty threat is Quebec's 'best insurance policy': Drainville


By Kevin Dougherty, Gazette Quebec Bureau October 24, 2010 •Story•Photos ( 1 )


"The reason we have bargaining power in Ottawa with questions such as Old Harry is because they know they have to respect Quebecers," says Parti Québécois MNA Bernard Drainville. “Because Quebecers are masters of their decisions and might decide one day to be sovereign.”- Bernard Drainville, the Parti Québécois MNA for the South Shore riding of Marie-Victorin, says the prospect of Quebec sovereignty is “the best insurance policy” the province has ever had.

“Even non-sovereignists should not let it go,” Drainville said during a pause in a weekend meeting of the PQ to discuss Quebec’s energy independence. Just having a sovereignist party in Quebec bolsters even the federalist cause in the province, he added, “because it is their bargaining chip.” “The day that Mr. Legault or others drop sovereignty, not only do they drop the best collective project we could have, but they drop the best insurance policy we will ever have in Quebec.”


Drainville was referring to François Legault, the former PQ minister, who is rumoured to be creating a new party that would shelve the idea of another sovereignty referendum. Drainville is also his party’s spokesman on Old Harry, a huge hydrocarbon structure in the Gulf of St. Lawrence where drilling is allowed in the Newfoundland sector, but not in Quebec’s sector, pending federal approval. “The reason we have bargaining power in Ottawa with questions such as Old Harry is because they know they have to respect Quebecers,” he said. “Because Quebecers are masters of their decisions and might decide one day to be sovereign.”


Drainville told about 500 delegates and observers at the weekend meeting that Ottawa is delaying an agreement with Quebec to develop its undersea resources to keep the province dependent on equalization payments. “Is the federal government afraid Quebec will be too strong, too rich, too free?” Drainville asked PQ delegates at the end of his presentation on Old Harry.


Old Harry is 460 metres below the Gulf of St. Lawrence, with possibly as much as 2 billion barrels of oil. The formation straddles the disputed undersea border between Quebec and Newfoundland. PQ finance critic Nicolas Marceau estimated Old Harry is worth $160 billion to Quebec, enough to pay the accumulated provincial debt. Newfoundland and Labrador has had an agreement with Ottawa, which according the constitution owns offshore resources, for 25 years. That agreement allows Newfoundland to collect royalties on its undersea oil and natural gas.


Drainville noted Prime Minister Stephen Harper only said this week, after the National Assembly unanimously adopted a PQ resolution on Old Harry, that he favours a similar accord with Quebec.
Equalization is money paid by Ottawa to the poorer provinces, including Quebec. Newfoundland, because of its oil wealth, no longer receives equalization.


Drainville called equalization payments “compensation for damages” Quebec receives because Ottawa favours other provinces, such as Ontario and Alberta. “If we were independent, we wouldn’t have to go to Ottawa,” Drainville said. “If we pump our own oil, we don’t have to buy from others.”

I REST MY CASE.

Wednesday, December 15, 2010

In Case You Missed It

The government of Quebec is hard at it - trying to stop Newfoundland and Labrador from getting too much of the oil from Old Harry. The big question is how does the federal government enter into an offshore agreement with Quebec when the border dispute is unsettled? Can we expect another betrayal at the hands of our federal government? Is our provincial government going to stand up and let it be known we claim all of Old Harry in accordance with the Convention of the Seas - which our country has signed onto? There is absolutely NO time to waste in making our position clear. Or do we trust that our federal Natural Resources Minister, Christian Paradis, a Quebec MP, will negotiate with Ms. Normandeau taking into account our provinces' interests and claims. We must be on guard for a shady, and quick, back room deal here. The following news story came out today in the Montreal Gazette, but was not reported in any of our papers...

By Kevin Dougherty Gazette Quebec Bureau, Montreal Gazette December 15, 2010 5:02 PM
Quebec will ask the federal government for 100 per cent of the resource royalties from oil and natural gas developments in the Gulf of St. Lawrence, which could bring the province as much as $8.7 billion.

Natural Resources Minister Nathalie Normandeau emerged from a regular meeting of the Charest cabinet Wednesday to announce that the cabinet has given her a mandate to negotiate a royalty agreement with the federal government.


Several potential drilling sites have been identified in Quebec’s portion of the Gulf, but Normandeau admitted Quebec has been pushed to act by plans to start drilling on the Newfoundland and Labrador side of the disputed underwater boundary between the two provinces at a place called Old Harry.

Corridor Resources Inc. of Halifax wanted to drilled on Quebec’s side of the line, but cannot without an agreement between Quebec and Ottawa.


So Corridor will drill instead on the Newfoundland side.


Geologists estimate that there are about 2 billion barrels of oil in Quebec’s portion of Old Harry. But the deposit could also be natural gas or perhaps a salt dome.


“We want 100 per cent of the royalties,” Normandeau told reporters. “Our priority in the short term is Old Harry.”


The federal government, backed by a Supreme Court of Canada ruling, claims full ownership of Canada’s offshore resources. Quebec also claims full ownership of undersea gas and oil deposits.


Normandeau said reopening the constitution to resolve the dispute is a dead-end.


So, like Newfoundland and Nova Scotia, Quebec will seek an administrative agreement with Ottawa, which will leave the ownership issue unresolved.


Under the administrative agreements reached by the two Atlantic provinces, joint federal-provincial boards manage offshore hydrocarbons.


Normandeau said Quebec wants to collect all the royalties itself, without federal participation.


She said the fact Christian Paradis, a Quebec MP, now is the federal natural resources minister represents an opportunity to resolve the dispute.


“I would be totally irresponsible not to seize this opportunity,” the minister said.

Normandeau added that Paradis is expecting Quebec to make this offer and talks will take place at the “top level” between deputy ministers, but that she plans to get actively involved in the talks as well.

Sunday, December 12, 2010

Why Old Harry Belongs to Newfoundland and Labrador

The "administration line" dividing Newfoundland and Labrador's maritime economic zone and Quebec's is in dispute. At the heart of the dispute is the Old Harry sub sea oil/natural gas formation - a 29 km long aquifer of  up to 2 billion barrels of oil and/or massive quantities of natural gas. The oil there is so plentiful that satellites pick up at least 6 natural oil leaks from the sea floor. Newfoundland and Labrador are already exploring it on the eastern side, but Quebec cannot start as it does not have an agreement with the federal government to proceed. One issue Quebec has is it's demand the federal government recognize it's sole jurisdiction to these waters - which the feds won't do. The other major problem is a lack of agreement over where the "administration line" is between the two provinces.

Quebec historically clings to the argument that an unofficial agreement in general between the Atlantic provinces and itself settled the boundary issue in 1964 - the so-called Stanfield Line. Newfoundland and Labrador has always challenged that boundary stating that not only was it general in terms, but that it was not ratified by an Act of Parliament as would be required under the Constitution. In actuality, the 1964 agreement was more an effort by the provinces to secure sub sea minerals (oil and gas) for themselves. The boundary issue was loosely agreed to in connection with this strategy. In 1967 the Supreme Court of Canada, in a constitutional reference on the matter, found that the seabed belonged to the federal government.

In 2001, Newfoundland and Labrador and the Province of Nova Scotia went to arbitration in order to establish the validity, or lack thereof, of the 1964 Stanfield Line agreement. The following is the finding of that group:                                            
                                                                AWARD
             For the forgoing reasons, the Tribunal unanimously determines that the line dividing the respective
             offshore areas of the Province of Newfoundland and Labrador and the Province of Nova Scotia
             has not been resolved by this agreement.
             Hon. Gerard La Forest
             Leonard Legault
             James Richard Crawford
In other words, there is no agreement upon which any maritime boundaries could be established or recognized.

The old 1964 agreement had an administration line that essentially brought Quebec's maritime border all the way from the mouth of the St Lawrence to 80 kms east of the Magdelen Islands - a massive 350 kms or so. Without such an extension to encompass a tiny set of islands Quebec's maritime boundary would not surpass 50 km east of Anticosti Island into the Gulf. In reality, the Magdelen Islands actually lie more in Nova Scotia's waters than they do in Quebec's. There have been legal precedents set for small islands lying off the waters of another's jurisdiction, and not conforming to the natural coast line of the host jurisdiction. One in particular case, St Pierre and Miquelon Islands (France), is a very good example.

St Pierre and Miquelon Islands are the last territorial remnants of France's once great empire in North America - located just south of Newfoundland. In fact they are so close they are located within Canada's Exclusive Economic Zone (EEZ). Canada and France had been squabbling for many years over the territorial waters that such an island deserved, and the effects on Canada's EEZ. In 1992 it was finally submitted for binding arbitration with three neutral international panelists, and one each from Canada and France. In a three to two decision, the two being Canada and France, the committee decided that France kept a 22.5 km territorial sea surrounding the islands and an additional 22.5 km contiguous zone. It was only 18% of the claim that France had made. The remainder of the territory was to remain Canada's EEZ, with the exception of a small corridor to the open seas. The committee used a straight forward interpretation of the Convention on the Law of the Sea, which Canada was a signatory to.

Based on this very close example, The Magdelen Islands would only have a very small "territorial sea" surrounding them, and not essentially the entire Gulf of the St Lawrence. Quebec's "administration line" or maritime boundary would then stretch in a line following it's mainland coast, but encompassing Anticosti Island. The result of this alignment is that Old Harry is not actually situated in Quebec's maritime economic zone. Far from it. The same territorial sea argument can likely be made for Anticosti Island as well.

According to the Constitution, boundary changes between provinces themselves must be agreed upon by those provinces involved and then sent to the federal government for ratification. The federal government can arbitrate, but only if requested to do so by the affected provinces. Without a settlement of the boundary issue Quebec cannot form a joint board with the federal government to oversee and grant licences for offshore exploration and development. It is highly doubtful that Newfoundland and Labrador would subject themselves to that process. Although, if they did, precedents seem to indicate that Quebec would lose and Old Harry would belong to Newfoundland and Labrador. However, should Quebec continue to cut it's nose off to spite it's face, Newfoundland and Labrador might as well develop the east side of Old Harry and, as they say, oil has no borders.

What should be:


The 1964 Stanfield Line:

Monday, December 6, 2010

Dec 6, 2010 news story that did not make the press. Wonder why?

QUEBEC - Danny Williams threw one last curveball at Ottawa before exiting politics by asking the federal government to help finance energy transmission from Newfoundland and Labrador's Lower Churchill project despite Quebec's long-standing opposition.
Click to Enlarge
Photo: JOE GIBBONS/The Telegram
Outgoing Newfoundland and Labrador Premier Danny Williams, left, speaks during a news conference announcing the $6.2-billion Lower Churchill deal. Others are Nova Scotia Premier Darrell Dexter, Chris Huskilson, chairman and CEO of Emera Inc, and Newfoundland and Labrador Natural Resources Minister Kathy Dunderdale. Photo: Joe Gibbons/Postmedia News
Whether Ottawa agrees to lend a helping hand, observers say it ought to carefully craft its response because it could trigger a fresh dispute between two old energy foes.
"If the feds buy into the Quebec argument, it will go down very badly, not just in Newfoundland but in all Atlantic Canada," said Donald Savoie, a leading economy expert at the Université de Moncton.
"This is a very divisive issue."
Quebec has opposed federal subsidies for the construction of transmission lines, including an underwater cable, for the joint $6.2-billion Newfoundland-Nova Scotia Lower Churchill hydro project, on the grounds federal help could distort the price and market for electricity.
Newfoundland and Nova Scotia have asked Ottawa for some $400 million in federal infrastructure funding to help with the cost of building the sub-sea cable from Newfoundland to Cape Breton.
Quebec Premier Jean Charest warned Ottawa any financial involvement in the construction of the transportation line would violate international trade agreements.
Meanwhile, Quebec's natural resources minister has said the province is looking at all its options to make sure Ottawa doesn't throw a penny into the project - and she didn't rule out legal avenues.
"We are putting all the necessary energy into this to tell the federal government: 'You simply won't finance the transmission line between Newfoundland and Nova Scotia.' We, too, are able to put our foot down," Nathalie Normandeau told reporters.
Jean-Thomas Bernard, a Laval University economist specializing in energy analysis, said Quebec could have grounds to sue the federal government if the financing leads Newfoundland - as laid out in the agreement with Nova Scotia - to sell power from Lower Churchill to the U.S. northeastern market.
"That would have an impact on the electricity markets," Bernard said.
Ottawa is trying to distance itself from the dispute. A spokesman for Finance Minister Jim Flaherty said the application for infrastructure money is being reviewed by PPP Canada, a Crown corporation that operates "in an objective, arm's-length manner."
The spokesman added the decision will be made on a "merit basis."
The Newfoundland government and Nalcor, its provincially owned power utility, declined to comment on the potential battle.
This is just the latest episode in a long-running energy battle between Quebec and Newfoundland. It all goes back to the controversial 1969 agreement that has allowed Quebec to reap windfalls by transmitting through its territory cheap power from the Upper Churchill hydro project, and selling it for large profits in North American markets.
Newfoundlanders still harbour a deep resentment against Quebec for this deal and the provincial government has tried for years to overturn that agreement. However the courts, including the Supreme Court, have sided with Quebec and declared the agreement between the two provinces valid.
To add to the division, both provinces also have a historic quarrel over Labrador's frontier.
When Williams, who left the premier's office last month, announced the deal with Nova Scotia with great fanfare on Nov. 18, he said this would put an end to Quebec's long dominance over the fate of Labrador power.
Like many observers, Savoie and Bernard feel the N.L.-N.S. agreement is still a long way from reality, notably because of the financial and technical challenges of building an underwater cable.
They both noted it would be in Quebec and Newfoundland's best economic interest to seek a deal to transmit power from the Lower Churchill project through Quebec's existing transmission grid to markets in Ontario and the United States.
"Quebec's best response would be to cut a deal with Newfoundland," Bernard said.
However, Savoie believes it might be too late for the two sides to reach an agreement.
"I think the relationship between both provinces is sealed," said Savoie.
He said it might be up to Ottawa to solve this long-running battle by forcing Quebec and Newfoundland to negotiate.
"I don't think Ottawa can sit idly by. I think in the interest of economic fairness, they should get involved and solve this dilemma in some way," he added.
However, ex-Parti Québécois minister and former Hydro-Québec executive Rita Dionne-Marsolais said it would be politically very difficult for both provinces to reach a deal considering how Newfoundland has used the Upper Churchill deal to attack Quebec.
"The popular pressure in Newfoundland is high and people feel they were swindled by Quebec. This prevents the two provinces from making a smart decision," she said. "I think no one is winning that

Sunday, December 5, 2010

Understanding Old Harry

In 2008 Corridor Resources, an exploration company, agreed to give up it's permit to explore the "Quebec side" of Old Harry - a 29 km long undersea basin of oil and gas. In that same year it signed onto a five year exploration permit with Newfoundland and Labrador. Corridor is fully involved in the Quebec on shore oil and gas exploration, including the Anticosti Island project.

Things in the oil and gas industry have changed in Quebec in the last little while. Prior to 2003 Hydro Quebec was functioning in it's usual state sponsored role as controller of the resources - including oil and gas. The Parti Quebecois, Quebec's separatist political party, had placed the rights for drilling and exploration in Hydro Quebec's hands. The purpose was to know doubt develop Quebec's oil and gas industry in a monopolistic, and state controlled fashion - not unlike their role as purveyors of hydro power. However, with the election of the Liberals in 2003 that function was to change drastically.

Hydro Quebec's role in the oil and gas industry was rolled back. Small junior exploration companies, with a distinct Quebec accent took Hydro Quebec's place at the helm. Companies such as Gastem Inc., Junex, Petrolia Inc, and Questerre Energy Corp. Raymond Savoie, former Minister of Mines in the previous Liberal government founded Gastem. Sitting on that Board of Directors are people from the former Hydro Quebec oil and gas division to the legal representative to the Royal family of Luxembourg. Junex has the famous Andre Caille, retired head of Hydro Quebec, on it's Board. International players have also become involved as partners to these smaller entities: SCDM Energy (Bouygues Group France), Pilatus Energy(Switzerland), Sprott Asset Management(Toronto), Forest Oil(USA), and Talisman Energy(Canada). Bouygues Group is a massive international conglomerate that coincidentally built the James Bay Hydro Electric dam, among others, for Hydro Quebec.

The latest trend appears to be consolidation, and quasi-take overs of massive properties and their hidden treasures. In June, 2010, Petrolia Inc bought out the interests of Junex and Gastem in the Haldimand field, Gaspe region, Quebec. Don't feel bad for them though as Junex owns 9.4% of Petrolia. One month later Petrolia entered into an agreement to develop the property on a 50/50 basis with Investcan, a subsidiary of SCDM Energie France. SCDM Energie owns 18.6% of the massive Bouygues Group - a controlling interest. Coincidentally, Investcan also has oil and gas operations in Newfoundland and Labrador - three separate on land exploration projects - one in partnership with Newfoundland's own Nalcor.

In 2008, Petrolia bought out Hydro Quebec's interests in Anticosti Island, becoming an instant partner of Corridor Resources. And so it goes. The big one came when Gastem took over the exploration rights to Old Harry on "Quebec's side". Of course it can't do anything with it, because although the Quebec government agreed to give it the rights, it does not have the legal right to action those rights - without an offshore exploration agreement with the federal government - who owns the seabed and it's bounty.

Of course all levels of government know this as do the companies, but what it does do is position them should the time come when an agreement happens. The problem for Quebec is that before the federal government will enter into an offshore agreement Quebec must first negotiate a "maritime economic boundary" with Newfoundland and Labrador. The chances of that happening under current circumstances are worse than nil. If Quebec wants a snow balls chance in hell it must first renegotiate the Upper Churchill agreement - radically altering it's terms. The government of Quebec needs to decide whether a large financial loss to Hydro Quebec's bottom line is worth tapping into the massive Old Harry field. While it may sound akin to extortion it's just business - just as the Power Contract of 1969 was.

It may be a case of 'a bird in the hand is better than two in the bush.' However, waiting too long will likely result in Quebec being too late to join in on Old Harry's fabulous wealth. After all, Corridor Resources is already doing the exploratory work off Newfoundland. It already has an offshore agreement with the federal government. It already has most of the world's largest oil companies in play at it's other offshore sites. Quebec is at least five years behind the eight ball already. Rarely has Quebec been so caught off guard when it comes to this kind of business exploitation. Perhaps, just perhaps, Quebec better get to the negotiating table and repair the damages of the Upper Churchill contract. God guard thee Newfoundland.