Dammed if we do, damned if we don’t

If you accept Nalcor CEO Ed Martin’s statement that Newfoundland and Labrador is running out of power, and if you believe Premier Kathy Dunderdale’s assertion that doing nothing could lead to power rationing by 2019, then you have no choice but to concur that action must be taken now to ensure that there will be enough power available to meet future need.

And if you’re on side with Mr. Martin and Ms. Dunderdale so far, then you might also reasonably agree with them that the two best, most feasible and workable options to fulfill that demand forecast are either an overhaul and expansion of the generating station in Holyrood, Newfoundland or development of a new hydroelectric project in Muskrat Falls, Labrador.

And if you accept that you must choose between a fossilfuel- burning project with no connection to Labrador or the Maritimes and whose long-term operating costs will be subject to the whims and fluctuations of global supply, if you must choose between that admittedly limited scheme and a project that is less expensive by $2.4 billion, that will generate environmental ly-friendly power (assuming you adhere to accepted wisdom on the subject of greenhouse gas emissions), that will create enough power for on-island need and future Labrador developments, while simultaneously whistling its way past la belle province and plugging into the North American energy grid via Emera, and which puts money back into Newfoundland and Labrador hands rather than some foreign oil tycoon’s, well then—basing everything on the premise that you are actually capable of rational thought—you really don’t have a choice at all, do you?

And yet … and yet … there’s still something that holds you back. What if the price of oil drops so much that Holyrood operating costs are ultimately cheaper than Muskrat Falls? What if Emera backs out and we lose the federal loan guarantee? Will we have more power than we need, at a price we can’t afford? What if there are other options that haven’t been fully explored? What if all the light bulbs in every industrial facility in the province were replaced with LEDs? What if Nalcor-generated power were supplemented with building-specific wind turbines and solar panels? Would that be sufficient to meet Dammed if we do, damned if we don’t projected demand? What if we put a stop to island industrial development? Surely that would resolve the power supply issue. What if we buried our heads in the sand and prayed really hard—would that make all our problems go away? What if … what if we cast our fear aside and dared to invest in ourselves, thereby finally exorcising the ghosts of our ill-fated hydro past?

There is no doubt we are at a pivotal point in time. We have before us the opportunity to select a protectionist type of power development that will take care of one province’s immediate needs, or we can opt for a project of greater vision and scope, one with the capacity to strengthen Eastern Canadian ties and potentially accelerate development in Labrador, both in terms of industrial capacity and community building.

Admittedly, there are risks. But who ever said that life is risk free? There are no guarantees that a university degree will deliver your dream job. No ironclad assurances that your surgery will be free of complications. And, more to this particular point, the Muskrat Falls project may well run over-budget. We may never sell as much power via the Emera link as we would hope. But if we do not try, if we embrace the status quo—not out of reasoned thought, but out of fear—then we have already failed.

When the powers-that-be signed the Upper Churchill agreement with Hydro Quebec in 1969, it was a deal at least partially based in fear. Fear that the project was too big for Newfoundland and Labrador to go alone. Fear that it was beyond our fiscal capacity. There may even have been an unspoken fear that a poor Atlantic Canadian province couldn’t manage and didn’t deserve a project of such magnitude.

No one wants to go down in history as the person who signs this generation’s Upper Churchill agreement. That, more than any other argument, is enough to convince me to support Muskrat Falls.

Dawn Chafe
About Dawn Chafe

For the past 19 years, Dawn has been editor of Atlantic Canada’s most award-winning and largest circulation business magazine: Atlantic Business Magazine. Under her editorial direction, Atlantic Business Magazine has won 14 Atlantic Journalism Awards, three TABBIE international business press awards and two KRW national business press awards.

3 Comments to “Dammed if we do, damned if we don’t”

  1. If Martin and Dunderdale themselves believed that we needed power by 2019 why was it not obvious to them prior to 2010, when only weeks and months before they were still trying to make a deal to sell Labrador power through Quebec? If they believed that Muskrat Falls was the best option, why did they need to tie the hands of the province’s public utilities board in their failed attempt to get PUB approval? If they believed that Muskrat Falls was the best option, why did they need to corral the PUB into assessing only two options? If they believed that Muskrat Falls was the best option, why was it essential to do a 50-year cost comparison that biased the process in favour of Muskrat Falls? If they believed that Muskrat Falls was the best option, why did Nalcor find it necessary to have a legal team ensuring that other options such as natural gas, biomass, etc. were excluded from the PUB review? If they really believed that Muskrat Falls is the best option, why did they need to effectively legislate the PUB out of the picture? If they really believed that Muskrat Falls was the best option why did they need to legislate a monopoly for Nalcor? If they truly believed that Muskrat Falls was the best option why did they need to legislate and allow Nalcor to lock island ratepayers into a 50-year, escalating take or pay contract? If they truly believed that Muskrat Falls was the best option, why did they need to eliminate any competition — preventing anyone from the private sectorfrom developing, supplying and distributing energy within the province? If they truly believed that Muskrat Falls was the best option, why did they (and why do they) refuse to demonstrate that Quebec is either not able or unwilling to provide or otherwise sell to the province any power that we might need to get us to 2041? If Muskrat Falls is the best option why do they not demonstrate that Quebec is not willing to advance some of their excess power to the province starting in 2019 in exchange for the return of the same amount of power after 2041 (when market conditions for Quebec may have improved)? Either a power purchase of exchange of power from/with Quebec could save island ratepayers 10’s of BILLION of dollars over 50 years —– And on and on and on it goes.

  2. Thank you Ms Chafe for a timely and, I think, correctly biased piece on the “Muskrat Falls project”. I put in quotes because it could as well be a euphemism for discussion of most logical means of supplying energy to east coasts. It is the least destructive of the more immediately available options, and it will be a secure and predictable supply. Adequate energy, its production and use, is the ticket to a sustainable and improved quality of life. At the same time your mention of being more efficient with use of that energy is another supplementary card to the hand that all regions must learn to play.
    I do have a concern of course about execution of this project. I need only mention Emera and tidal power and their laughable(home many years?) and embarrassing fumbling. Project skills of that caliber must be avoided.
    Interference by political meddling must also be avoided while at the same time those very entities that tax payers have given trust with oversight must act in our interests. And those interests are many and important.

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