Russia's Battle Plan

As the last 3 weeks have ground on it has become clear that Russia's primary objective in Ukraine is two-fold: Firstly it is to over throw the over throwers in Ukraine; ans secondly it is territorial. For the last three weeks the Russians have applied a "Chinese water torture" type of strategy. They could have occupied Crimea and captured or destroyed the Ukrainian ships and garrisons there within a day if they wanted to. Instead they slowly enveloped the bases, blockaded the ships, and reinforced - at a snail's pace. What does that do? It prolongs the suffering. Instead of a quick execution, the Russians are in effect torturing Ukraine. They are destabilizing the country and at the same time paralyzing the West.

The point of this post is how what will be the territorial objectives of Russia in Ukraine and how will they execute. There has been a great amount of spin from both sides about Ukraine's unity. One side says there is total unity, and the other says the country is divided along linguistic lines. Below are some maps that give you an idea how Ukraine breaks down geographically:

The 2004 election:

 

The 2006 election:

The 2007 election:

The trend is pretty clear, Ukraine is a country divided at least politically. Then consider the linguistic breakdown of Ukraine:

It's very clear that Ukrainians are divided politically by the language of origin. That goes along way in explaining why the first act of the new Ukrainian parliament was to remove Russian as an official language of Ukraine.

Not as important as territory, but still an important factor to the Russians, is the booty that an invasion of Ukraine can yield. Here is a look at the industrial assets of Ukraine:

Mines,oil, gas fields, and coal:

  

 You will note that the vast majority of Ukraine's developed natural resources are in the east and southeast of Ukraine.

Nuclear facilities:

You will note here that 75% of Ukraine's nuclear generation capabilities are located in the east and south east of Ukraine - while the disabled Chernobyl is just in the western boundary.

Then consider the military defence of Ukraine. Even its military commands are broken down in a similar fashion:

Bottom line - Ukraine is divided along linguistic, political, economic, and even military command lines.

The Ukrainian military forces are laid out:

Ukrainian military bases are laid out:

Ukrainian Air Defense bases are laid out:

Ukraine's highway system:

Although Ukraine's military is somewhat spread through the country, most of its strategic forces are located in the western portion of the country. This could better preserve them from immediate Russian attack in the east and southeast, but leaves the both very vulnerable to quick Russian occupation.

Strategically, militarily, economically and politically Ukraine is exposed to occupation and separation in its south and east. The question is whether Russia will decide to take these areas to support its goal of territorial buffer zones with the West. The logical conclusion, given Russia's military and political moves is yes. 

The first move was securing the Crimea. This takes care of a number of issues for Russia. Firstly, it allows Russia to transfer the S-300 and 400 air superiority missile systems into Crimea, bringing all of south east Ukraine into their range. That allows Russia to clear Ukrainian skies of any airborne threats - such as planes, helicopters, and missiles of all types. Russia achieves immediate air superiority. Taking the Crimea, and blockading the majority of Ukraine's fleet in port, clears the way for amphibious operations against areas like Odessa that would otherwise be compromised by a large naval presence. Finally, Crimea flanks eastern Ukraine, creates a second front, and gives the Russians a secure start line for a southern invasion. Therefore, I see Crimea as a necessary piece in the invasion puzzle, and not as a "crown jewel" that Russia has craved to own.

The second move has been positioning and battle drilling troops along Ukraine's eastern border. For a military that has not seen conflict of any serious scope for a generation, preparation is crucial to success. Military reports indicate that Russian airborne forces have been deployed in Crimea and along the eastern Ukraine border. The strength reported is divisional, and is likely the 7th Guards Airborne Division normally situate in the Moscow area. Also, light armored personal carriers (APC's) and tanks, designed for the airborne to be dropped with them, have been sighted on transport trains headed into the area, and on the roads - also headed to the eastern Ukraine border. This element is crucial. 

There are a number of bridges in south east Ukraine that would need to be secured prior to advancing armor and infantry arriving. If the Russians don't secure these, an advance could get bogged down behind rivers. Expect to see airborne drops east of Odessa all the way to just north of Crimea, and along the Dnipro River which separates eastern and western Ukraine. This will serve the dual purpose of securing bridges for advancing troops and trapping elements of the Ukrainian military placed in the east for defence.

Armor will be a big factor in this action, as will APCs. Ukraine has vast plains suited perfectly for fast tank warfare and fast moving mechanized infantry. The Russians have moved vast numbers of tanks and APC's to the eastern border. Look for the Russians to send armor columns to Kharkov, Donetsk,  Luhansk,  Zaporizhia, Dnipropetrovsk, Poltava, and possibly Kiev. 

The south east Ukraine will see more artillery, air, mechanized infantry, marine and airborne operations. The geography of the area, and the closeness to naval and air bases in Crimea, make these options ideal for the capture of Odessa and the south east.

The occupation of east and south east Ukraine will take less than a week. When it's over everything will have changed. Ukraine, on top of its already dire economic circumstance, will have lost a vast majority of its natural resources. Its electric power grid will be significantly diminished. It will be land locked and half the size it was. Its military will be either destroyed or captured. Its civilian population will be in a state of chaos, and the Russians will likely achieve their goal of removing this group from power. That could allow them to leave.

Or, they could stay. If the Russians stayed they would have created a land locked buffer zone between them and NATO. Significantly, they would surround what's left of Ukraine on three sides - making it permanently weak. In addition, they would completely control the Black Sea, and solidify themselves between Turkey and the rest of NATO. 

Economic sanctions are not a factor in this equation. Russia has the lowest debt ratio to GDP of any of the actors, and any of its moves will cause chaos in western economies beyond the scale Russia could be affected. It is not the oligarchs in Russia that decide if Putin stays or goes. It's the other way around. Banking on this would be wishful thinking. Whether Russia stays or goes in Ukraine depends on whether it wants to re-position strategically or whether it wants to alter the world economic order at this time. Personally, I lean to a Russian occupation of the east and south east, with some areas choosing to join Russia permanently. An occupation gives Russia so many tools to influence world events that it is almost irresistible to the chess playing bunch down at the Kremlin.  

     

The Liberal Conundrum

When I left the PC Party, and joined the Liberals in 2011, the PC's were at 75% in the polls and the Liberals barely registered 15%. Yvonne Jones was the Liberal leader at the time, and a fierce opponent of the Muskrat Falls project. In fact, the party was wholly opposed to Muskrat Falls, and fought the 2011 election based on that belief. After that election the leadership changed, and Dwight Ball took over. He too was against the Muskrat Falls project. When, in 2012, the governing PCs passed the final two pieces of legislation authorizing the project, the Liberals attempted to shut it down with a filibuster. The opinion of the Liberal Party was Muskrat Falls was a disaster in the making. We even had a mascot - Winston.

That was then, and this is now. Muskrat Falls has become more than a dam. It has become a state of mind. It has become the symbol of government secrecy and manipulation. For two years former premier Dunderdale was wore down by the maintenance and defending of that manipulation and secrecy. The PCs dropped from 75% to 25% in the polls. Moral high ground was thrown from the window, and survival was brought through the back door. They hunkered down until it became obvious Dunderdale symbolized Muskrat Falls, which in turn symbolized dishonesty with the people.The first premier in Newfoundland and Labrador to be essentially over thrown. The lesson for all parties in the province was, and is, so blatantly obvious - the old school is dead.

However, I fear, the lesson may have been lost even quicker than it was taught. Certainly the PCs have learned the lesson - to an extent. They've placed a humble Tom Marshall in as interim leader, promised to revisit Bill 29 (the other symbol of government secrecy), and even fired off MHA Paul Lane (most known for organizing the fixing of on-line polls in the government's favour) over to of all people - the Liberals. And that is the essence of this blog. The Liberals.

The Liberals were the designated benefactors of the PCs decline. They were catapulted into a dominant position when the NDP blew apart after a failed coup, launched in secret, while the party leader was on holidays. The NDP regrouped, slightly, and two MHAs who refused to regroup went independent and then joined - the Liberals. Now, almost by default, the Liberals reached 52% and the PCs a lowly 25%, with 25% undecided. The fall was steady and appeared not to have a floor, but the latest  CRA poll shows a new trend which should cause concern to the Liberals. The mild mannered, gentle grandfather image of Marshall has halted the PCs fall, and even increased their popularity to 33%. The Liberals remained essentially the same, as did the undecided at 25%.

In terms of warfare, you can not defeat your enemy until you stop his advance. So, first you are on defence, and then you counter attack. If your counter attack is successful, you advance. This is where things are at. The PCs have stopped the Liberals advance. Now they are in a position to counter attack. Of course there are still many opportunities for the PCs to blow their legs off, but all things remaining equal, you can expect a counter attack and soon. The problem is, and the reason for this post is, the Liberals don't have a defence to ward off that counter attack.

After distinguishing itself as a defender of openness and accountability in the early battles over Muskrat Falls and Bill 29, the Liberal Party was viewed as an alternative that reflected what people want. People knew where the Liberal Party stood. Now? Not so much.

Case in point: Cathy Bennett. Without question, a 100% supporter of Muskrat Falls and everything it took to get it there - including Bill 29. A Danny Williams' appointee to the board of Nalcor and eventually the chairmanship. A founding member of the business pro-Muskrat Falls group, fondly known as "Millionaires for Muskrat Falls." A large financial contributor to the PC Party. Really, despite her claims otherwise, a died in the wool Williams PC. A woman who was openly berated by the audience in Gander during the Liberal leadership race for her position on Muskrat Falls and Bill 29. Now, having lost the leadership, she is welcomed into the Liberal fold as a candidate in the Virginia Waters by-election without any change in her position.

Case in point 2: Yvonne Jones. Former leader of the provincial party from Labrador that was ridiculed by her own party, and whose leadership was constantly under attack from within. She did, however, put up a brave fight over Muskrat Falls until she left that leadership. The CBC openly speculated she was offered a deal by Liberal, pro Muskrat Falls businessman Dean MacDonald, to give up the leadership for a soft landing. That was denied, but a few months later she suddenly left the leadership, became very pro Muskrat Falls, was elected as an MP, and cheer led the case for powering mining developments in Labrador with Muskrat Falls. A more stark turn of face could hardly be imagined.

Case in point 3: Dale Kirby and Chris Mitchelmore. While both were sincere and dedicated MHAs, they got caught knifing their own leader - very publicly. Unable to rally their Party's support, they both sat as Independents and then crossed the floor to the Liberals mere weeks after Lane. Given their actions against their former leader, it is hard to imagine these gents are interested in openness and accountability. More accurately, they represent the oldest of old political ideals - opportunism.

Case in point 4: Paul Lane. Lane has to be, or better put was seen to be, the most rabid PC there ever was, and that's saying something. He was caught red handed fixing online polls on VOCM, among others. He regularly called open line radio shows trashing the Liberals, and promoting Bill 29 and Muskrat Falls. He claims that he walked the floor to the Liberals, because Dunderdale's leadership was no longer tolerable, and he just couldn't live with Bill 29 after all. If it wasn't real life you could laugh for a year, but it is real life. He is the exact opposite of openness and accountability.

Just like any cake, the secret is in the ingredients. What makes a chocolate cake is chocolate. It looks like chocolate, and it tastes like chocolate. The problem for the Liberal Party in this province is the taste is being lost in the ingredients. It is becoming bland and without definition, or at least the definition it wants. In other words, people are rapidly having a hard time seeing what it stands for. Many people who I know for a fact that were considering voting Liberal just months ago are now looking elsewhere. It's disturbing.

 What does the Party stand for? That is the question, and it's only going to be honed in on by the PCs as they counter attack. What it appears to stand for is getting elected. That's not a good enough reason to exist in today's political world. People are looking for a serious, alternative way of being governed. They want to be respected, have their views respected, and have a government with a vision that is respectful enough not to harm its own people. Somehow, whether in perhaps premature confidence, the Liberal Party has become willing to accept almost anything to further its march toward power. That is where I, and many others, are staring to have an issue. It isn't sufficient to simply represent more of the same, just in a less offensive way. It is necessary to bring far more than that to the table. The old political saying is if you try to out Tory the Tories the people will choose the real Tories.

Of course, I will take a lot of heat for writing such a post. After all, criticism is considered disloyalty in the fish bowl of Newfoundland politics. But, I don't care. I'm not interested in simply replacing this government. I want a new government with a new way of doing things, that represents its people and not its own interests. Otherwise, what's the point. Power for the sake of power? Nothing could be more lukewarm than that. And you know what happens to things that are lukewarm.

Real Politic Russian Style

Putin is not a genius. He doesn't have to be.

The US and Europe tried to use economic warfare to take Ukraine out of the Russian sphere of influence. They tried to outbid Russia for Ukraine loyalty with European Economic Union membership, and an accompanying military allegiance as well. That suited those in western Ukraine, however, the East is a different story. The Europeans and Americans wanted to fight this war on the only field they could win it - the economic one. The Russians went through the tools of diplomacy, and found a different one - the military one. It's really that simple. This isn't rocket science.

Despite two decades of nauseating chest pounding, the Americans never won the Cold War. The Russians and Chinese simply decided a game of chicken with then US president Ronald Reagan wasn't worth it. They switched to economic warfare instead. Russia being the resource and technology warehouse, and China being the industrial and manufacturing warehouse. Now, today, Russia's national debt is a puny 7% of GDP, and China is set to become the number one economy in the world. That didn't happen by accident. It's also no coincidence that, despite their new "economic societies", their geopolitical goals have not changed. They just used a different horse to get there.

Yes, it's not the Russians and Chinese that don't get it. Frankly, it's the West. We've spent two decades building world trade that has almost singularly benefited Russia and Asia, and racked up massive debt for the Western World. And debt matters. Take the example of Henry the Eight, King of England. His banning of the Catholic Church, and creation of the Church of England, funneled massive wealth into England (that would otherwise have gone to Rome) and Elizabeth I used that wealth to expand the Empire. As did successive others. Dollars and debt affect nations, empires and war.

So, bringing it back to Ukraine, the Russians weren't prepared to see their military buffer zone change sides. It's a matter of national interest. It always has been for Russia, and for the West not to see that before they tried to outbid Russia for Ukraine's allegiance is almost unbelievable. So Russia set off massive military exercises and poured troops of one kind or another into the Crimea. They didn't do just that though. They took air force bases with their expensive Russian built fighters stuck on the ground in Russian hands. They scuttled a massive old battleship at the mouth of the Ukrainian naval base stranding seven of Ukraine's warships. These are big ticket items. After all, Ukraine owes Russia about $2 billion for natural gas used, but not paid for.

They did it all without firing a shot. Putin has arranged for a referendum to be held in Crimea in less than two weeks, and his parliament is pushing through a bill defining requirements for ex-states that want to become part of Russia. All the while thumbing his nose at the West, and leaving his options open to do the same to Eastern Ukraine.

The West's response is correspondingly without any teeth at all. Send a ship into the Black Sea. Send a few fighters to the Baltic States. Issue declaration after declaration. Threaten sanctions. The fact is, there are many western based corporations with big investments in Russia, not the least of which are American and British oil companies. So Russia has the mutual destruction button ready to push - the economic one that is. China and Russia have the same capability militarily against the West, and the West vs. them. There is no advantage to any party, except Russia has the military force ready to go into Europe. That is a fact. It also has the capacity to destroy the European economy over night by shutting off the taps to natural gas. Many people say that Russia would not do that, because it would suffer as well. However, people that say that are looking at the equation the wrong way.

Take China for instance. When the 2008 economic meltdown occurred, China laid off 250 million people and shipped them from the cities back to their rural communities. No revolution. No protest. No problem. The Russians are the same and have proved it in the past. They sacrificed 25 million dead in the second world war and, far more than any other ally, they bled the German army white - without which the Second world War would have in all likelihood ended differently. So, instead of viewing Russia, and for that matter China, as if they were American modeled economies and societies, the West needs to truly understand how bad its's been beaten at its own game, and what position that leaves us. My take - we are reaping today what we have sown.  

Patriot Games: Ukraine,Venezuela and the like.

The Olympics are over, and so is the peace. During the games, two separate, but curiously related insurgencies erupted: one in the Ukraine and one in Venezuela. Separated from each other by geography, but linked to each other by the "national interests" of the United Sates. Venezuela being the pot that stirs the anti-american kettle in South America, and the Ukraine being the soft under belly of Russia's traditional buffer zone to the West.

They each erupted over civil issues: Ukraine-a loan agreement with Russia and the abandoning of the European Union approach; and Venezuela - a student protest over security on a campus. From there they both transformed into mass demonstrations, complete with violence and death. Each insurgency sought primarily one thing - the over throw of their government. A troubling trend.

If you believe that democracy is the rule of the majority, as expressed by election of representatives, then you have to be concerned about these events. Both Venezuela and the Ukraine are democracies that elect their own governments. We may not like the choices made, and the losers of the elections may not like to lose, but that is the natural result of democracy. There are those that win elections and those that lose. The key is to respect the result of the election. To do otherwise is to undermine the very foundation of democracy, and unfortunately we've been seeing a lot of that recently.

A short while ago, the Egyptian military overthrew the elected President of Egypt. The reason? He wasn't governing on behalf of all Egyptians. Those that voted against him in the election protested and demanded he be overthrown, and after much bloodshed he was. Ditto for the Ukraine. Possibly the same coming for Venezuela. If any one reads this that believes these "revolts" are spontaneous cries for freedom, well, you're fooling yourself. These are quite obviously "revolts" that resulted from the destabilization of these governments, because they didn't serve the "national interest". The problem with this approach is that it takes us back, yet again, to the rule of the jungle.

We barely walked away from the American/European intervention in Syria without a world war. If you recall, while the Americans and French were threatening to turn the Syrian government into a parking lot by way of military strikes, the Chinese and Russians were sending war ships and troops to the area in response. Like the Ukraine, Syria involved key strategic allies of Russia - vital to its national interests. Now, we are headed back to a similar scenario. However, this time the stakes are far greater, and far more dangerous.

Up until now the Russians and the West were satisfied with trying to bribe the Ukraine government over to one side or the other. The Russians offering $15 billion in aid, and the West offering EU trade membership. When the Ukrainian government chose the Russian option over the Western option all hell broke loose. Demonstrations and then violence flooded the centre of Kiev. Then, when the government agreed to go with the Western option and abandon the Russian option, the crowds demanded a change of President. Finally, the Ukrainian President changed his mind again, and went with the Russian option. That resulted in an escalation of the violence, many deaths, and his overthrow.

Now, as I write this, Russian troops, ships and aircraft are being deployed all around Ukraine. At a minimum, it looks as though Russia is prepared to annex Eastern Ukraine, which is heavily influenced by Russia, and home to many Russian speaking people. It's also home to the base of the Russian Black Sea Fleet. That is a minimum. At a maximum, Russia could decide that its "national interests" require a buffer state the size of all of the Ukraine. Russia has always used countries around it as buffer states to foreign aggression. It is at the core of Russian strategic planning, and always has been. It is the reason why the US and Britain have already issued warnings to Russia not to militarily intervene. It's another game of chicken between the US and Russia - just like Syria.

What should trouble us in all this, besides the obvious dangers of war, is what I call "democracy of convenience". That is, yes we'll be democratic, but if we decide that our interests aren't being served, we will overthrow that democratically elected government. Having a "democracy of convenience" is like having "principles of convenience", neither of them mean anything. The problem with having "democracies of convenience", that don't mean anything, is that the entire order of our world is threatened. After all, our trade and integrity as countries in a global community requires rules, protocols, and order. Without it, the world becomes a free for all. We are at that point now. A free for all. We can't expect to disregard the very things that separate us from the animal kingdom, and remain apart from the jungle.

Perhaps, that is the way it's meant to go. Perhaps our society, and our freedoms such as they are, have become inconvenient. Perhaps this is all one step toward the collapse of our international order which might result in a world government of sorts. Perhaps that is the point. Maybe the only thing left to decide between the big powers of the US, China, Russia, and the West is who will dominate that world government. Just maybe that is what we are witnessing in our time. In any case one thing is for certain, the values of democracy are being rendered meaningless each and every day - to our certain detriment.

Is Newfoundland and Labrador Falling Down?

With 500 years of history behind it, and oil revenues fueling the engines of hyper inflation in its urban areas, Newfoundland and Labrador should be a bright spot in Canada. It should be, but honestly, it isn't. In fact, the province of Newfoundland and Labrador is sleep walking into a disaster of its own making.

A great deal of Newfoundland's problem stem from those 500 years of abstract poverty for the many. While it didn't kill the independent spirit of the people, it did kill the education system. Generation after generation were brought up in a religious dominated education system that did nothing to advance intellectual development or debate. The priority of a great many people was simply survival, and in many ways that remains true today. If you leave the province with children, enroll them in a school elsewhere in the country, you will know how far they've been let down by the education system here.

However, it's not the children who are causing the fall of this province. It's the adults. It is evident every day, of every month, of every year. Many commentators call it "apathy". Apathy is at the root of all of Newfoundland's problems they say. People won't engage in the political system or hold their representatives to account beyond voting every four years, or so. There is a real nugget of truth in this. If the adults can't see beyond "keeping up with the Jones", with their shiny new sleds, the big houses, the monster trucks, then who will?

Frankly, it's a case of built up expectations being released in a volley of consumption. Having so little for so long created an appetite to have it all at once. The new found oil wealth was the fuel. Responsibility left the room. Greed entered. You can see it everywhere in the province. Whether it's the epidemic of failed marriages in a place rooted in "the family", or the epidemic of crime and drugs, or even the provincial government's abandoning of anything resembling responsible fiscal policy, the infection of greed is everywhere. It is no longer "we Newfoundlanders stick together". It is no longer "one for all and all for one." Sure, that rhetoric still gets used by politicians to defend this spending priority, or that project, but it is just rhetoric now. It has now been replaced with "me,me,me".

That attitude has caused deep and dark chasms all across the province. A good example is "townies" in St. John's debating whether rural Newfoundland is worth spending any money on. We've had actual conversations on province-wide radio about whether it's necessary for the affluent Avalon Peninsula to spend oil dollars in rural Newfoundland for such things as roads, ferries, or even basics like water supplies. Which, totally ignores the fact 50% of the population lives in the rural part of the province. The tone is so self-serving, so self-absorbed, it borders on narcissism. Group narcissism. Arrogance fueled by the need to look down upon others to make yourself feel important. Danny Williams, as premier, fueled this feeling and channeled it into a nationalism that can only be termed "ugly". The most recent example being Williams' indignant "bullshit" comment when confronted with the scientific reality that Newfoundland and Labrador's population is in imminent decline. As if it were an attack on the very people of the province by "negative nay-sayers", and not the brush of reality that it was by the Conference Board of Canada.

The schisms haven't stopped at the island portion of the province. Labrador has become alienated. Labradorians watch as their rivers and lands are exploited for the benefit of the coffers in St. John's. they grow angry and resentful as they travel along unpaved highways, and watch their young people die from a lack of search and rescue and extreme substance abuse problems in the aboriginal communities. They are tired of a central government, located far away, using them for what they can get and giving only a pittance back. Some Newfoundland commentators say this is small minded on the behalf of Labradorians, but they fail to see the same in themselves. Just witness the constant attacks against the federal government for not doing enough in the fishery, or ferries, or what have you. In most cases we are right to be outraged, but yet we don't afford that same right to Labradorians.

It has become a central theme in Newfoundland. A lack of accountability. Whether it is the government passing Bill 29 to avoid accountability in general or banning the Public Utilities Board from holding Nalcor and the Lower Churchill development accountable by exempting it from the Public Utilities Act, it's all about not being accountable. It's everyone's fault but ours. There is nothing wrong with us, it's everyone else. Rural Newfoundland is meant to die. Labrador is meant to be used. It is for the greater good, and that good rests in St. John's and the Avalon.

The province has blown $14 billion in oil revenues in less than a decade. The provincial budget has gone from $4 billion to $8 billion in less then ten years. The unfunded pensions remain unfunded to the tune of almost $7 billion. The gross debt is larger than it was before the oil boom began in 2003. Yet, outside of St. John's and the Avalon there is almost nothing to show for it, other than the inflated prices caused by unsustainable spending. The people in Labrador are tired of sending their wealth to the collective credit card. The people in rural Newfoundland are angry at the state of their health care, and basic necessities of life - like roads and water supplies.The province is breaking apart along geographical areas. Talk of Labrador separation is becoming more and more evident on province-wide radio shows. Talk of absent, neglected or substandard services in rural Newfoundland is the same.

The place that had been in poverty for 500 years has, at its moment in history, fallen down. It has failed to manage itself for the benefit and interest of its people - all its people. It refuses to look inward and accept what is wrong, and change it. It drives to be the one to reap reward, and turns its back on those left behind. It has grown cold, and the cold, like a sheet of ice, has shattered the geographic and societal conscience of this place we love. Is Newfoundland and Labrador falling down? Yes it is. And what a shame.      

The PUB Complaint on Muskrat Falls filed

Today myself and five other people filed an official complaint with the Public Utilities Board (PUB) here in the province. These people come from all over the province - Labrador, the Northern Peninsula, and here on Random Island.

The provincial government designed its Lower Churchill strategy around pushing public oversight of the project beyond us. It exempted Nalcor from PUB scrutiny. Ditto for the entire Lower Churchill project, including transmission lines, dams, everything. It had the whole deal sown up, except for one thing. In order to allow for the Churchill dam projects, Muskrat Falls now and Gull Island later, the government amended the Electrical Power Control Act in 2007 to allow it to effectively force CFLCo to break the Power Contract with Hydro-Quebec. When Hydro-Quebec's directors on the CFLCo Board vetoed the proposed Water Management Agreement, leaving the door open for Nalcor to go to the PUB. The PUB dutifully implemented the agreement as they were required to do under the Act.

The government had a plan. It can be found further on in the Electrical Power Control Act. Specifically, it allows the government to declare a "State of Emergency" if for "some reason" it should be in a situation where it does not have enough power or water to supply the power "needs" of the province. The way to look at this is the government is essentially creating its own state of emergency. The Supreme Court of Canada has already ruled legislation like this is unconstitutional. The government knows this. There plan is simple: build the dam by legislating away any legal opposition; have the dam and more importantly the transmission lines built before their case with Hydro-Quebec goes to Court; and when the Court sides with Hydro-Quebec declare a state of emergency.

Under that state of emergency the provincial government appoints an Emergency Coordinator, who decides who gets what power, including Hydro-Quebec and the Upper Churchill. The state of emergency stays in place until the government decides it's over. There is no legislated criteria for when it starts or when it ends. All of this has been tested in the Supreme Court of Canada, and all of it has failed - completely. That's my problem. I know it's going to fail. When you know something is going to fail, and you know your fellow Newfoundlanders and Labradorians are going to be sacrificed in the process, you have two choices: do nothing and let it happen; or do something and try to stop that sacrifice. I chose the latter.

I have already filed a lawsuit that is going through the Courts, and is in the Appeal Court now. And, today, myself and five others filed an official complaint with the PUB over that same Water Management Agreement. The government had to open their flank by giving the PUB the power to order a water management agreement, but in doing so they also left the power with the PUB to rescind the agreement. Perhaps, even more importantly, the Public Utilities Act requires that when a complaint is filed, and it involves a question of law, the PUB must refer it to the Supreme Court of Newfoundland and Labrador, Court of Appeal for a judicial reference. Essentially, the agreement will be judged on its constitutionality. So, while the government has done everything it can to avoid a judicial review of the water management agreement until the dam is built and it's too late, they left the power with the PUB to do just that. All it took was five people to sign an official complaint to put it before the PUB. That's what we did today. Now it's up to the PUB to follow the Act and send it to the Appeal Court for it's day of judgement. The official complaint is below:

    

The Ghost of Premiers Past

Danny Williams is what my father would say is a promoter. That is they are big cheer leaders when it comes to other people's money. As premier he spent like a drunken sailor. The $10 billion or so he went through in oil revenues was poured into a provincial economy which, until that time, was like a fire starved for wood. Property values, wages and inflation sky rocketed as they do when that sort of thing happens. Locally it was referred to the "buddy boom". What he didn't do was pay the biggest bill the province has - the unfunded pension liabilities. Kind of like a teenager with a new job spending all his money on a new car and not paying his rent.

What he did do was get the Muskrat Falls dam project on course. He spent years, from 2003 til 2009 drafting pieces of legislation here and there that gave the province some false hope on taking power from the Upper Churchill, and setting the course for Muskrat Falls and his land development in the suburbs of St. John's.

So this past week was a home truth week. A week when many buried issues came home to roost. The Conference Board of Canada came out with its study stating our province would see a dramatic drop in population, by 2035, to about 482,000 people - worst in the country. Williams, true to form, lashed out at the Board's credibility and called their study "bull shit". Well, unfortunately for Williams, he is the one who is full of bullshit. The demographic change has its roots in the decade 1985-95 when 140,000 Newfoundlanders under the age of 25 left the province. A massive hole in the demographic of the province that could only be reversed by an immediate and similar size immigration.

However, Williams isn't much for people raining on his parade. The very same day as the Board's statement on population decline, Williams was back in Newfoundland from his sunny mansion in Florida, to promote his new, massive land development. Seems Williams was quite disturbed by the idea that he would be foolish enough to build 10,000 new homes when the population is receding. In typical Williams style, he lashed out at the Board for being "negative". Apparently, not good for business.

He also took the opportunity to promote a new power line from the Upper Churchill to Lab West for Alderon Iron Ore Inc - estimated to cost the taxpayers $300 million. In fact, he called it a "no-brainer". The problem with that assessment is it's not entirely clear the Upper Churchill facility can be modified without the consent of Hydro-Quebec, and it's definitely not clear the Water Management Agreement he imposed on Hydro-Quebec to make Muskrat Falls possible is legal either. None the less, it's a no-brainer. Perhaps, being a person who stands to gain a great deal from the Alderon mine development would say such a thing. Williams is a hired "strategic consultant" at Alderon, as is his girlfriend, and he holds 1,250,000 share options and 100,000 shares in it. You never hear that bit in the media here for some reason. So, like the population decline affecting his glorious housing development, the power line is a must for his mining development.

Of course, Williams says he would never put his reputation on the line for such small things. However, the facts say when it comes to his self-interest, Williams takes care of business. But does that mean he's right? Take the case of Bill Barry. He's a self-made wealthy businessman dealing in the fish industry. He's also bluntly honest, and not a fan of Muskrat Falls, or many other of Williams' decisions as Premier. On the same day as Williams made the proclamations from on high above, he also took the opportunity to falsely accuse Mr. Barry of wanting to: privatize Nalcor; privatize health care; and privatize education. He said Barry stated all these things in a memo sent to caucus for support in Barry's leadership bid for the PCs. The truth is Barry said none of them, and when Barry published the memo, Williams was caught in his lies.

It seems that Williams is still caught up in the days of being Premier, and spinning people lines that they took hook, line, and sinker. The truth of those lines is starting to ebb to the surface. Case in point, Wabush Mines. It announced this week that it's closing a mine in Labrador. The reason? No business case. So Williams "no-brainer" case for running a publicly funded $300 million power line to a mine, he holds the single largest share options in, looks self-serving and not in the public's interest. To build a new mine with borrowed Chinese money when the market is clearly flooded is one thing. To build a dam and run power lines for mines with the public's money is another.

It seems that the ghost of Danny Williams still haunts the Province.

Can Alderon Iron Ore Have Their Power Lines?

Alderon Iron Ore Corp has been launching an all out offensive over the last three weeks to get their $300 million transmission lines run from the Upper Churchill facility to Lab West, and of course their Kami mine site. Without the power line, Alderon claims its Chinese financing will dry up within mere weeks, and the project will be moth balled. Alderon has been able to get Loud Labradorian MP Jones to screech for them. They have got the towns on board with agreements, and the hollering that comes from that. They even inked a deal with the Innu. They are crossing their "I's" and dotting their "T's" in a virtual hearts and minds campaign aimed at putting pressure on the ...PC government.

Pressuring the PC government? Aren't they supposed to be allies in the whole Muskrat Falls rah-rah team? That is the way it was til a short while ago. Now suddenly Alderon is threatening the taxpayers that if they don't come up with $240 million (our share of the $300 million) they will take their toys from the sand box and leave. The press are covering the whining. Dutifully printing out Alderon's words. Funny enough not allowing comments on the stories - at the CBC anyway. Yes, all in all, it's a typical Newfoundland railroading job on the taxpayers.

Strange that the media aren't asking a few really pertinent questions of our politicians like: 1. Does the Power Contract allow us to add any transmission systems to the Upper Churchill; Does the Shareholders Agreement of 1999 play a role; and why would we invest in a $300 million line when the Quebec lawsuit will be before the courts until at least 2018? Never hear a single word about these issues in our press. Not a word. Bizarre. Truly bizarre. Do we have an investigative press here at all, or is that simply restricted to why buddy had to wait three hours in the E.R.? Is all about the cat in the tree, or the skater, or the garbage collection? Is there not at least one press person, other than the true giants of media here (the open line show's hosts) that can look and report an issue in depth? Warn the people? Inform the people? Doesn't appear so, and that makes us truly unique in Canada.

Should we place one penny in the Alderon/Lab West transmission line? No. And frankly neither should Alderon's shareholders. Bottom line is without a court tested water management agreement, so there is actually power to send down the transmission line, and until Hydro-Quebec get's on board and allows the modification of the Upper Churchill facilities (which in the Power Contract includes roads, lines, town site, everything) no more power can be sent to Lab West - not one kwh.

It's time the government was honest with the people, and say: " Look we came to an agreement with Hydro-Quebec to swap documents and examine each other's witnesses, and that's agreed by court order to take to August 2015, then we go to court, and then we may have to appeal all the way to the Supreme Court of Canada. We feel it would be irresponsible to spend money on a line like that until we are sure we can send power down it. Wouldn't be fair to taxpayers or Alderon's shareholders."

That would be the truth, but this government isn't known for being truthful. It is known to be manipulative, secretive, and hell bent on screwing us (Abitibi - case in point). If the PCs want to turn things around it will take baby steps with big impact. This will be a test for the "new" leadership. This is also a test for the opposition parties. Why would they promote this line given the circumstances? Is it all about politics or is there a sense of duty. A sense that there is a common sense voice that can be trusted? I guess we'll see, but decision makers be aware. The days of making deals to make the boys happy, and sacrifice the people, are over. Govern yourselves accordingly.  

The Journalism Deficit in Newfoundland and Labrador - Case in Point Alderon Iron Ore

"Only a free and unrestrained press can effectively expose deception in government"
Hugo L. Black - Most influential US Supreme Court Justice in the 20th century


In Newfoundland and Labrador we take for granted that our press is free - whatever that might mean. Perhaps it means they are free to say what they want within the laws of libel. Perhaps it means they are not subject to censorship. Perhaps. But, are they unrestrained? That is a valid question in this province. The press here are routinely criticized for simply regurgitating whatever press release or commentary the provincial government may give them. They are criticized for not questioning, thoroughly enough, politicians. There are exceptions of course. Take Russell Wangersky of The Telegram. Award winning journalist. Deep thinker. Critical thinker. Focuses on the issues of our day, and is not judgmental. He is a professional and recognized nationally as such. Unfortunately, there is the other side of the coin, and in the same paper. Reporter James MacLeod recently published on Twitter that his primary advice to journalism students on the meaning of journalism was to "not be a jerk". There are other professionals at the province's main paper to be sure. There are also many that fall into the other category.

The worst offender in this province, without question, is the local CBC. I've met and worked with CBC reporters all over the country, but never have I seen an operation like this one. Maybe if Harper is looking to privatize a part of CBC it could be this one - save the rest cause CBC is otherwise a great, professional organization. Personally, I've had a number of really amateur experiences with CBC NL. Without going into great detail, this one is my most notorious http://www.cbc.ca/news/canada/newfoundland-labrador/cochrane-the-curious-case-of-brad-cabana-1.1373079

Then there is the case of CBC Labrador. In an interview with a team searching for the Muskrat Falls u-boat a reporter stated I was trying to stop the Muskrat Falls project by involving the fabled sunken u-boat. That was not the case, or ever the case, and I contacted the producer of the show and requested the same time to refute that statement. The producer promised to look into the matter and get back to me - that was months ago. It's part of a pattern, frankly, at the CBC here - lazy journalism, personality framing, and reputation smearing. It's like having your high school rumor mongers in charge of discharging real news to people. The case in point that finally set me off to write this long over due blog is Alderon Iron Ore Inc.

For disclosure purposes, Alderon and Danny Williams are suing me for defamation, and I am counter-suing for the same. When Alderon and Williams sued, their Statement of Claim was published on the CBC website as part of the story. When I counter-sued  my Statement of Defence was not published with the story. In other words, the CBC NL allowed Williams/Alderon's statements against me to stand without perspective. They also allowed public commentary on one side's story and not on the other. That prompted a very pointed article by one of the critically thinking bloggers at The Telegram     http://www.thetelegram.com/Blog-Article/b/22420/Comment-Disabled . These are just examples that are personal to me.

This, however, is truly bizarre. Check out this story of Alderon demanding a power line for it's mining project http://www.cbc.ca/news/canada/newfoundland-labrador/alderon-says-clock-ticking-on-need-for-hydro-line-1.2509399 .  The Minister Derick Dalley said earlier this week that the third power line would have to go through the PUB and that could take 4-6 months. Today, just days later, he says the decision will be next week. In addition, press sources reported Alderon had signed agreements with the Innu Nation and a Labrador municipality for revenue sharing. All positive stories on Alderon.

Now, check out this story from the South China Morning Post: http://www.scmp.com/business/commodities/article/1388556/hebei-iron-may-face-closer-watch
This story was forwarded on to the CBC and other provincial media outlets. Did they publish one word of it to their readership/listeners? No, they didn't. This despite the fact that Hebie Steel's only Canadian business is its investment in Alderon. This quote is a major red flag:

"Hugo Williamson, managing director of Risk Resolution Group, a British consultancy, said such allegations could result in extra scrutiny of a wide range of relationships that foreign firms had with Chinese state-owned enterprises.
Deals with companies in Canada in particular were likely to be examined by domestic investigation agencies if allegations of bribery were involved, Williamson said.
Hebei Iron and Steel did not reply to repeated request for a response to questions from the Post."

Then there is this quote which should concern every person in the province who pays taxes and/or utility bills, and will be forces to pay $300 million for a power line from the Upper Churchill to the mines:
"If there were insufficient funds within the group to make good on any losses sustained, then the parent company might be forced into a fire sale of assets, the lawyer said."

As troublesome and disturbing as it is that our media have not reported this story to the people of the province, there is more. Hebei has been ordered to cut back its production of steel by the Chinese government, thereby reducing demand for iron ore: http://usa.chinadaily.com.cn/epaper/2013-11/26/content_17132724.htm the massive cut back to Hebei raises the very logical question: Why would Hebei need more ore?

While Alderon has put out press release after press release about this agreement or that agreement it has signed with groups in Labrador, it has not uttered one word or printed one release to let shareholders know the situation of their primary partner and investor - Hebei. That may be an issue with folks like the Ontario Exchange Commission. Bottom line is the people in this province deserve to know what their politicians are committing them to, and frankly, CBC NL is being down right negligent in its duty to inform by spinning the positive but ignoring the other. It's a standard of journalism that has tainted the words of Hugo Black noted above. If the press is free, then what is restraining them? We deserve so much better, and thank God we get that from the three open line radio shows in the province run by VOCM. I shudder to think what the democracy of our province might look like without it.

Kathy Dunderdale - End Game

After the battle there is only tribute.

My experience with Kathy Dunderdale started at the PC convention in October 2010. I watched from 20 feet away as she nominated her choice as Vice President of the Party. It wasn't the "old boys" choice. A moment later, Danny Williams was on his feet and moving directly to his choice. He bent over and wrapped an arm around the shoulder of his choice, whispered in her ear long enough so everyone took notice, and Kathy's choice was scuttled. Symbolic really of the days to come.

When Williams suddenly chose to exit the political scene in December, 2010, Kathy became interim Premier due to her status as Deputy Premier. She claimed publicly she didn't want the job permanently, but no prominent members came forward to challenge. Suddenly there was a rah-rah for her leadership, and the taste of well-stroked ego convinced her to take it on full-time. I challenged her leadership with the required signatures and money, but the backroom boys wouldn't hear of it. A challenge and leadership race wasn't part of their plans. As Chick Chilock said to me, as left my home after spending three hours trying to brow beat me, "I am in the backroom, and we know you'll do the right thing." The right thing being: don't challenge the leadership.

In any case, Kathy took the bait of the backroom, disappeared for a few weeks, and came back a brand new woman. She had a new hair style and had shed dramatic weight in a very short period - leading some to speculate she had a surgery of some sort. She began her term with a soft, diplomatic approach, giving the doctors all they wanted and settling a large dispute with them.  She hit a few bumps. Most notably the attempted appointment of Williams' girlfriend to the Offshore Petroleum Board. The attempt to cover up that mess, and the subsequent lies they got caught in, really framed the years to come - incompetence and falsehoods.

Kathy did manage to get through all that, win an election against two very weak opposition parties, and stroll on. She battled for the Muskrat Falls project, getting it through the House, but alienating many along the way with her combative, arrogant style. She pushed through Bill 29 severely limiting access to information in the province. She struck out viciously at opponents of the government as "nay-sayers" and "known critics of the government". She became framed as a sort of unfeeling tyrant.

All that being said, there is something else to be said here. There is no question, for anyone that understands how backroom politics work, that Kathy Dunderdale was set up from the very beginning. In the backroom its the "patsy" or "flak jacket". The patsy being the one that takes the fall for everything, and the flak jacket being the one to take the bullets to protect those really behind the scenes. In Kathy's case she had the unfortunate distinction of being both.

In my estimation, Kathy took the bullets for Danny Williams. Williams made every decision as premier until he left office in 2010 - some would say his decision making never ended. She took all the criticism for Muskrat Falls, Emera, the loan guarantee, etc. Most recently she took the blame for failing electrical infrastructure, crippled by $1.2 billion in cuts to upgrades and maintenance that were authorized in 2009 by her then boss - Danny Williams. She took the heat for mass layoffs in the public service, which had become bloated by massive hiring between 2004 and 2009 - by Danny Williams. She took heat for massive deficits in the public pension plans that were not paid into from 2003 to 2010 (or since) by her boss - Danny Williams. The list goes on and on.

Williams made himself out to be "good time Charlie". While he reigned it was one big party. Spend, spend, spend. During his reign the province would burn through nearly $11 billion in oil money. The massive hyper inflation raised the prices of people's homes and their wages. It was good times. Kathy then had to cut back to save up the 35% down payment needed for Williams' other pet project - Muskrat Falls. She had to put away upwards of $3 billion so the feds would put up their $5 billion loan guarantee. All a part of "Danny's plan" as one adamant PC said to me once.

Yes, the truth about Kathy is she never had a chance. She was put in as a figure head, and run by her Cabinet - all appointed by, you guessed it, Williams. She was set up for personal failure while achieving the goals of others. The ultimate "party pooper". As one friend would put it: "It's a sin". The province's first female premier gutted by the backroom. Sure her attitude and style did not help, but perhaps those were well known attributes.

Kathy Dunderdale will forever be known as Newfoundland and Labrador's first female premier. Like Kim Campbell was Canada's first female prime minister. Both were manipulated by ambition and vanity, and both suffered similar falls from grace. The difference in this province is people pile on - like a high school bully fest. I've been guilty of it myself at times. They won't leave Kathy with one shred of dignity. In the irony of all ironies, and I would argue deliberately so, some people have been crying out for Williams to come back and save them. The very man who orchestrated their pain in the first place with his decisions as premier. The biggest question out of all of this turbulence is this: "Will Newfoundlanders and Labradorians see how they are being manipulated, who is manipulating them, and change the political culture of the province -fundamentally? If the answer is no, then Kathy Dunderdale's sacrifice will have been for nothing. If the answer is yes, then hats off to Kathy Dunderdale.

Nalcor and Hydro-Quebec's "Management Order" over the Upper Churchill

For the last few months I've been awaiting the hearing in Quebec Superior Court, between Nalcor and Hydro-Quebec, over recall rights and management of the Upper Churchill dam. The hearing was scheduled for January 20, 2014. Subsequently, it came to my attention the hearing had been put off. I was quite interested by this change as the french girl repeated the date of the hearing twice to me on the phone - so January 20th was a firm date.

I contacted the Superior Court registry in Montreal requesting clarification. The man on the other end was adamant there was no longer a hearing scheduled for the 20th, and said there was very little on the file - except one thing. That one thing was an "Ordannance De Gestion" - english translation: " Management Order". I was set back by this for a few reasons. First, at the time, I wasn't quite sure what a "Management Order" was. Second, I wasn't aware of any hearing or the like since the suit was first filed by Hydro-Quebec. The gentleman at the Superior Court would give no details though, other than to speak to Nalcor's (Strikeman Elliot) or Hydro-Quebec's (Norton Rose Fulbright Canada) lawyers.

Luckily, I knew how to order a copy of the order and did so. I tweeted Nalcor and the provincial government asking for a copy. No reply. Then today I sent another request, even though it was ordered, on twitter and copied in a local journalist. Nalcor came back with "we sent you a tweet two days ago", which of course, they didn't. Apparently, our world class people at Nalcor do not understand that every tweet they send is logged in their tweet record. In any case, they did dutifully send me a copy by email this evening - my $6.50 down the drain for my Quebec copy.

The nuts and bolts of the "Management Order" is an agreed upon approach by Nalcor and Hydro-Quebec to manage their proceedings - an agenda if you will. We might call it a case management order. Anyway, there are a few, very important details regarding this order.

The first detail that comes to mind is why is this order not public? Why was their no press release from Nalcor or the government? This court case has been prevalent on the minds of many in the province given past experiences with Hydro-Quebec and courts. It also shows the two utilities, through their lawyers, could actually come to an agreement - even if it is just how one is going to sue the other. After all, the order was given on October 3, 2013 by Chief Justice Francois Rolland of the Quebec Superior Court. That is three and a half months ago. Not a word from the government or Nalcor. Remember that.

The second, and by far more serious detail, is the length of time detailed in this agreed upon path. It begins on July 22, 2013 with the launch of Hydro-Quebec's suit, and ends on August 7, 2015. Yes that's 2015, and it's not a typo. That is the schedule. During this time the plan outlines exchanging of documents, examinations and all that type of legal stuff. That is not the end of it though. Really, that's just the beginning. Then it goes to the Quebec Superior Court for the actual hearing, then it likely gets appealed to the Quebec Appeals Court, and then likely to the Supreme Court of Canada. Realistically, it might not be fully resolved through the courts until 2018.

That should really shock a lot of people in the province of Newfoundland and Labrador. What it effectively means is Hydro-Quebec has covered its interests at the Upper Churchill. It has legally filed its opposition to the taking of power over the 300 MW allotted by the Power Contract. Its has also legally filed its opposition to Nalcor ignoring Hydro-Quebec's right to have the plant managed according to its needs, not Nalcor's, which again is enshrined in the Power Contract. So Hydro-Quebec is covered. It doesn't need all the power the Upper Churchill uses anyway given its surplus of wasted power over the last few years is as mush as all the power produced at Churchill Falls. Essentially, it can now sit back and watch as Nalcor continues to take power, manage the facility, break the Power Contract, all based on Williams' water management agreement, and then reap huge damages that will bankrupt CFLCo. It's almost been made too easy for Hydro-Quebec.

But I don't care about Hydro-Quebec. I care about Newfoundland and Labrador. It's a hard place to be right now, watching it all go down. One government bound and determined to build its gallows. Another watching with glee. How much better can Hydro-Quebec get it than being awarded costs for power taken that they can't even sell on the market? Now that is ironic.

If there is any sense of pride, or even just plain old self-preservation, the people in this province better stand up and fast. Only a complete and utter fool could build a dam that he can not run at more than 20%. Mind you, Napoleon decimated his once proud army in the vast Russian countryside. Hitler did the same. The Romans got too over extended. But, I am not aware that any of them did it purposely with full knowledge that they were driving their own into the ground. That's not the case here. Williams and Dunderdale had and have, before them, all the information not to make such a tragic and frankly stupid decision. Yet they did. Nalcor's hiding of the fact that while they build Muskrat Falls the very court case that will undermine it's use has been established - with their agreement. Kept from the people. The people being led like lambs to the slaughter - quietly.

Here is the order, the agenda is in French and English:

Newfoundland's Final Humiliation

There are few things that Newfoundlanders, and the province in general, are more afraid of than being made to look stupid. No body does. However, here it is taken to a higher level. There is a history of the "Newfie jokes" or even the just the term "Newfie" by itself, that boils the blood. The connotation is that somehow a Newfoundlander is doomed by birth right to be inferior to the rest of Canadians.

There are a lot of theories on why Newfoundlanders are so self-conscience about what others think of them. My own theory is that losing your country to become a province is a hard pill to swallow. It affects the collective psyche in ways that run deep and can last a long time. It's doubly hard for a proud people. That's why even today you will commonly hear the young and old refer to Canada as a separate entity: "just got back from Canada". Of course the reality is one doesn't leave Canada if travelling to the mainland. The reality is we are one country now, but the ground between the soul and reality is murky at best.

Another source of humiliation, that has become anger and resentment, is the Power Contract 1969 with Hydro-Quebec. In that case Premier Smallwood, all busied with big names like Winston Churchill and the Rothschilds, had the province agree to a 198 year lease of the Upper Churchill that allowed the Power Contract to be signed and gave Quebec control of the facility for a pittance. The actual annual pittance today is about $2 billion for Quebec and $65 million for Newfoundland and Labrador. Since the early 1970's the dollars from the project have left the province and the people followed. Smallwood's great cry was "industrialize or perish". The result was Quebec industrialized on cheap Labrador electricity and Newfoundland perished.

Fast forward to 2003, and the election of Danny Williams and the PCs. Williams got elected just as the beginnings of oil money started coming in. Williams was determined to undo the wrongs of the Power Contract, bring back nationalistic pride that he saw as robbed by the agreement, and show Hydro-Quebec the door. He created the "Energy Plan" in 2003, created a state owned monopoly (Nalcor) in 2007, and amended/created all types of legislation in between time to put the path in place. Come hell or high water he was going to make things right. Most Newfoundlanders, including this one, applauded at the notion of historical redress.

Then it came off the rails. Hydro-Quebec's directors on the board of CFLCo (the corp jointly owned by Hydro-Quebec and Newfoundland and Labrador Hydro 'NL Hydro') vetoed the Water Management Agreement that Nalcor's directors on NL Hydro and Nalcor itself had negotiated. Within a month Nalcor was knocking on the Public Utilities Board's (PUB) door for an imposed Water Management Agreement (WMA) - as per the aforementioned  amendments Williams did to legislation back in 2007.

The PUB passed the Water management Agreement, without as much as a coma being changed, just as Nalcor had put it forward. Apparently, in June 2012 Nalcor began taking more MW from the Upper Churchill than it was allowed - which the WMA authorizes them to do. Quebec sat back and waited.

As part of my own lawsuit against the Government and Nalcor regarding the Muskrat Falls project, I served Hydro-Quebec with a letter inviting them to be an intervenor in the case. I informed them contractual rights under the Power Contract would be at issue. My purpose was to put them on formal notice, that if they refused to act they would be acknowledging the province's right to usurp their Power Contract rights. That would set a legal precedent, and they would be unable to come back at a later date and argue they were unaware of the case. In a sense, I pushed them from waiting in ambush for us to finish Muskrat Falls and then take us to court. Within 2 days of my initial injunction failing at the Supreme Court of Newfoundland and Labrador, Hydro-Quebec filed suit in the Superior Court of Quebec - ambush firmly tripped.

On January 20, 2013, 11 days from now, Hydro-Quebec's motion will be heard. It asks the Court to declare two things: 1. That Newfoundland and Labrador is not entitled to more than 300 MW of recall power plus the old Twinco block; and 2. That it has the right to manage the facility (which includes roads,switchyards,etc) in accordance with its needs - and only its needs. Both these rights are firmly established in the Power Contract and the Supreme Court of Canada's Review of the Reversion Act 1984. This province has no chance, and when I say no chance I mean zero chance, of winning these issues in court.

Getting to the meaning of the title of this article - the final humiliation. Estimates of exactly how much money has been spent on Muskrat Falls so far are hard to get. Conservatively it ranges from $800 million to $1 billion. Now the people of Newfoundland and Labrador, blinded by the nationalistic rhetoric of the Williams years, have to face the reality that the very foundation of the Muskrat Falls/Lower Churchill project is not valid. Without it there is no "banking" of power, no lines to mines, no power for the Island and no power for Nova Scotia. It is the kind of disgrace you don't wish upon your worst enemy. Williams will have succeeded in giving the province one last real humiliation on the national stage - one his old friend Harper was only too eager to assist with. For that I can not forgive him.  

Ego, Arrogance, Incompetence and Crisis

The last week should have been a big eye opener for the people of Newfoundland and Labrador. It began with a stark, and sudden warning that the province would be plunged into rolling power black outs during extremely cold winter weather. People reacted with shock and disbelief when they discovered the outages were caused by "maintenance issues".

At least that was the original story. Planned maintenance on two generators and the breakdown of a third were named as the reason for the rolling black outs. Then it was the extreme weather - which wasn't that extreme. Then a switch yard blew up. Then it was the extreme weather and the maintenance. Then it was planned maintenance that had been delayed due to repairs of another generator. Then it wasn't planned maintenance, but rather maintenance caused by breakdowns. Then it was just plain repairs. As the week progressed so did the story.

The people were enraged. They've been told that the province's energy crown corp, Nalcor, was run by "world class" people, and they didn't need any uppity outsiders telling them what to do. It's a common refrain since Williams became premier here in 2003. They castigated the people who dare spoke in opposition to the obvious flaws in their power concepts and plans as "nay-sayers" and "known critics". Here, castigation is the best form of marginalization. In other words, to dare challenge the plans and actions of the government is somehow being anti-Newfoundland. Williams used to call them "traitors". Dunderdale has stuck with the "nay-sayers". A very small-minded response by very small-minded people.

Then reality hit when the rolling blackouts started happening during normal winter temperatures, and people became infuriated. They wondered out loud why their "world-class" system was not adequate. Nalcor came out with "no worries,its just planned maintenance". The government was absolutely silent. People were not satisfied. The talk talk shows lit up, and began running almost 24 hours a day. The provincial radio station VOCM  began running coverage like a mix of CNN and talk-show. People's outrage escalated as a sense of betrayal, and an absence of leadership combined to fuel the fire.

The explanations kept changing, and it became very clear that, instead of being given a clear picture, spin was the order of the day. A deliberate attempt to manage the truth. Mask it. That all changed when the switch yard exploded and three quarters of the Island's population were plunged into darkness and cold. Luckily for rural Newfoundland wood burning stoves are common, and people were able to keep themselves warm. In the urban centers things were different. They suffered more rolling blackouts and the severity of the mass outage was pronounced with their reliance on electrical heating.

Sadly, at least one person, and perhaps more, died during these events as a result of carbon monoxide poisoning - trying to keep their homes warm, but not ventilating them properly. So many people were admitted to hospital for carbon monoxide poisoning that one Eastern Health doctor called it an "epidemic".

Yet, despite the collapse of the fable that the government and Nalcor was in complete control of the "manifest destiny" of the province, Ms Dunderdale and Nalcor refused to accept responsibility. There was no one to be blamed. There was no flaw in the electrical system. There is no flaw in the government's "energy plan". All was as it should be and the people needed to do their part and not use the power that had been trumpeted as "endless".

Confidence has been shaken. The propaganda-like nationalism surrounding electrical power has been severely shaken. The trust with government and Nalcor has been destroyed. After not making one appearance in the first 48 hours of the crisis, Dunderdale suffered so much criticism she held three press conferences in one day - damage control that failed. Yet the government and Nalcor clung to the myth that they can do no wrong. That the whole fiasco was not a "crisis" - even though 71% of the people believed it was in a province-wide radio poll. Dunderdale called it a "critical time" but not a "crisis".

It's all a symptom of the same thing really. Arrogance and incompetence. Too arrogant to admit incompetence, and too incompetent to admit arrogance. Media and some talk shows continuously call this a "bad PR" plan, or the government "out of control of the message". In reality, it's just the most recent example of a crisis in leadership through out the political and, in some ways, business circles of the province. Egos inflated by nationalism, bolstered by arrogance, and rooted in incompetence.    

Alderon's Muskrat Falls Headache

A few weeks ago, Alderon Iron Ore Corp's Mark Morabito went "off his head" during a radio interview with VOCM during an open line radio show. He blasted the provincial government for not passing the environmental process for the Kami mining project in Labrador. He also criticized the failure of Nalcor and the government to sign a power supply agreement and build a $150 million power line system from the Upper Churchill to Lab West (and his mining project). Clearly, that line and power purchase agreement are crucial to the mine moving ahead. Here is an excerpt from Alderon's subsequent press release:

" We were informed of the status of power and various other files under review by the Provincial Government. Following our discussions with the Minister and his officials, we are confident that these matters are being pursued diligently and expeditiously, " says Tayfun Eldem, President and CEO of Alderon. " The Government's approval to build the power line is crucial to Alderon securing the previously announced debt financing and we are pleased that the Premier has expressed her support for the power line." 

"Is crucial..to securing...financing." Interesting. All along the story about Alderon and Muskrat Falls has been Alderon doesn't need Muskrat Falls power unless it doubles its production down the road. Now it is suddenly necessary for financing. Of course. Alderon is calling it the "line", but the bottom line is Nalcor has no excess power to send on that line, so it would have to be power created at Muskrat Falls, and relayed through the Upper Churchill, and out to Lab West (and the mine). FYI on the environmental study issue - Alderon has to pay its Chinese partners $3 million a month for each month the approval fails to come through starting January, 2014 (which is now).

So, given the heavy weights behind Alderon, and all the dollars involved, how is it that Nalcor hasn't committed to the power line and a power supply contract to Alderon yet? According to earlier statements the price pure kilowatt hour has been agreed to. The problem is in the amount of power to be supplied. The answer lies in the Power Contract of 1969, and the Water management Agreement.

All Nalcor's, and the provincial government's plans involved implementing the WMA, which would allow Nalcor to take over the operation of the Upper Churchill. With that control, Nalcor could take power almost at whim from the Upper Churchill, and redistribute it as it wanted. For Alderon that would mean a secure power source. Whether Alderon's early founders Forbes and Manhattan were sold a bill of goods on the validity of this plan is uncertain. Who sold them on it? Williams? Altius? Both? It's hard to say right now. When push came to shove, and all the glossy pictures and back slapping were done, reality hit home. 

Hydro-Quebec filed suit, which will be heard January 20, 2014. That is a suit Hydro-Quebec is going to win, and when it does, the WMA is not worth the paper it is written on. What does that mean for Nalcor? It means Nalcor will not be able to take 1 MW of power from the Upper Churchill, other than the recall they already have (and is fully consumed). Nalcor knows this. They are playing a very dangerous, and frankly stupid, game of chicken with Hydro-Quebec that we can not win. 

What does that mean for Alderon? It means Nalcor can not commit to the power supply, and therefore it means there is no rationale reason to build a $150 million power line system. Unfortunately for Alderon, it has already used the credibility of Forbes and Manhattan's Chinese connections to make inroads - and promises. Now those promises are in serious doubt. Loss of face with the Chinese is a very, very bad thing.

In some ways there is a little poetic justice here. Danny Williams, the former Premier that brought in all the legislation that is now before the Court in Quebec, is also a main player in Alderon. Now his own legislation is hurting Alderon's chances of getting off the ground. Mean while, Dunderdale and company sit on the environmental application, likely as an out for them. It's all a bit of devilish karma coming to bite some people right in the arse. It begs the question: does Alderon have a Plan B to buy power from Hydro-Quebec, and if not why not? Politics is best suited divorced from the board room.