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)

Sunday, February 6, 2011

Mega Bust

It was with great fanfare, and a lot of provincial pride, that most people in this Province welcomed the Lower Churchill Development Agreement with Emera, and Nova Scotia. The largest "green" mega project in North America. A "nation building" exercise akin to the great national railway. An end run around the monopolistic clutches of Hydro Quebec. A rousing appeal on many levels. I was initially agreeable on all fronts.

However, the details started to come out. The first detail to really get my attention was the capacity of the sub-sea lines and stations. The Labrador-Island Transmission Link will cross the Strait of Belle Isle and have a capacity of 900 megawatts. The Maritime Link will run from Bottom Brook, near Stephenville and connect at Lingan, Nova Scotia. The sub-sea link will be approximately 180 kilometres long and will have a capacity of 500 megawatts. 900 MW to Newfoundland and 500 MW to Nova Scotia? Excuse me.

The sub-sea links from Labrador to Nova Scotia are completely inadequate to ever transmit the power from the Upper Churchill project to the Maritimes. The excavation and installation of such a massive sub sea link, and of course the cost, would logically require a much higher capacity line to qualify as an end run around Hydro Quebec. What would be the point of having your primary asset isolated by functionality from your main market if you intended to be a major player in the hydro electric business south of the border? Makes absolutely no sense from a corporate point of view. In a private corporation such vision would likely result in termination and laughter - not sure which would come first. There would certainly be a share holder revolt.

The "green" aspect is also questionable. There is a big debate going on in the US right now as to whether or not large hydro electric power projects qualify as new green power. Of course Hydro Quebec is fully invested in the propagation of this idea in Vermont and other key US states. The key reasoning is a large, matching US federal government grant to promote new green energy initiatives. In other words, the Mother of all Double-Dipping. Get paid for the power and get a nice bonus on top of that. Big money and big business. The real environmental impacts, especially in Labrador, are highly questionable. Including, but not limited to 41.5 km2 of flooded land. Some would say this is a much smaller flood impact than the Upper Churchill. However, I like the argument: We used to live in caves, but we don't do that either anymore.

The big clincher for me was the economic impact. I am not speaking of the positive benefits, because any expenditure of billions is going to create spin offs - long term and short term. No, I am speaking of debt. The killer of dreams and aspirations, the chains that bind us to futility, and the proven fatal curse of all civilizations. Newfoundland and Labrador's current debt hovers in the $11 billion mark - a massive amount for 500,000 souls. The interest payments on that debt alone take a sizable bite from the Province's annual budget as it is. Now imagine adding another 6 to 10 billion on top of that. Even with federal loan guarantees the interest paid on that debt over it's lifetime will double the cost to at least $20 billion. That would be almost suicidal enough if it were making money, but with massive surpluses already existing in the hydro market it becomes genocidal.

The bottom line is every dollar we ever hoped to get from oil would be paid in interest to foreign bond holders for a massive concrete block on the lower Churchill River. In 2016 we are going to lose another 20% of our revenue from the Upper Churchill in accordance with the automatic renewal clause of the 1969 Power Contract. Factor in an aging population. The end result is a financial quagmire of biblical proportions. The only way any financial group would even glance at this project is if the federal government would guarantee the loans, but should they?

The federal government needs to take a step back, shake it's collective head, and wake up. It should not even consider supporting this "project". If the provincial government is in collective lemming mode someone has to show reason. Corporately it makes no sense. Financially it makes no sense. Environmentally it makes limited sense. Perhaps we need to call a spade a spade. This whole project is simply a negotiating ace - and not a good one. The Provincial government holds out the Lower Churchill as a stick against Hydro Quebec. That may be warranted, but the stick has to be taken seriously. As the saying goes: "This dog don't hunt."
The federal government needs to come clean with the people of Newfoundland and Labrador and explain to them the ramifications of this project.

Personally, I was at first a big fan of the idea. If you love the Province, you have to pull for it on something this big. However, when the real details started coming out, if you love the Province you have to say no to this project. To do otherwise is to sentence the Province, and her people, to a destitution not yet seen in these lands.


  1. I was doubtful that this future debacle had any redeeming features and your sound reasoning just reinforced that for me .

  2. This comment has been removed by a blog administrator.

  3. Not only will this project benefit all and sundry ,but, Ed Martin is suggesting that , paraphrasing ,"Not only is this great for Atlantic Canada , but, it will also make a stronger Canada" .

    It might make Nova Scotia and the rest of Canada stronger , but, saddling this province with a crippling debt for the next thirty years ,seriously hinders any chance we may have as a people .

    Somebody has to put an end to this god-awful madness .

  4. it can be done!!

    form a new party, formulate a media strategy based around twitter, facebook, this thing, radio talk shows, and statements to the press. it can be changed, and the ones to do it are right here.

    perhaps base it solely on the reversal of the lower churchill contracts. since the books are closed and ed has been documenting the whole thing it should be pretty easy to make others question the benefit to us and our kids.

    invite the liberals as an allie in the cause rather than the lead in it.

  5. @Lonenewfwolf:

    In my opinion your idea is excellent , one whose time has come .

    The big question is ----- Do our people have the will to make such sweeping changes ?

    Our population is an aging one .

    Do we have enough people technologically advanced and motivated to proceed with such a venture ?

  6. "it can be done"!!

    There is a lot of rhetoric going on , let's see some action !

  7. in ft. macmurray, and elsewhere we do. there are plenty of tech savvy people here on the island ('some' that do not work for the government) as well.

    how to contact them and send the right message so they see and feel the need for change is the hurdle. the mediums i mentioned are a good place to start with that, just needs to be co-ordinated so the media picks up on it and people start to tune in.

    need a big story/spark to start it up.


Comments are welcome that contribute to the discussion or foster further debate.

In the interests of ensuring that people take responsibility for their own words, individuals can make comments using their Blogger ID or OpenID.

Profiles should be open to the public and reveal an e-mail address so that people may contact the commenter directly.

Anonymous comments, including those from people using fake, apparently fake identities, or profiles without contact information may be deleted. Spam will be deleted as soon as it is identified.