Monday, 7 July 2014

Res Ipsa Loquitur (THE THING SPEAKS FOR ITSELF)

In common law, the doctrine of “res ipsa loquitur” (Latin for "the thing itself speaks") states that a conclusion can be inferred without direct evidence.  The photograph (below), recently obtained by this Blog, is an excellent example of such a proof.

The image offers visual certainty, to arguments advanced by Muskrat Falls’ critics, that there is still time to cut our losses on the project; we should shut it down.


Nalcor CEO Ed Martin, stated recently in announcing an additional $800 million cost overrun, that he is now “comfortable with the cost envelope”.

Martin's comment accompanied no documentation, no independent verification, and no evidence of the kind of contracts to which Nalcor is committed.

A recent Post, on this Blog, COST OVERRUNS: YOU CAN'T HANDLE THE TRUTH included this comment: “with no work begun on the North Spur, the power house or the transmission line, as well as on other major components of the Project, no experienced builder would give the kind of assurances Martin is attempting.”

The photo was taken from a public area of the North Spur, looking south.  

Muskrat Falls Construction  Site Viewed from North Spur - Uncle Gnarley Blog
Those knowledgeable of the site will recognize the location as the second drop on Muskrat Falls. 

The structure you are seeing (center photo) is a cofferdam (a temporary watertight enclosure) made from concrete to keep water out of the planned spillway and power house (not begun). Two cranes have been erected. Other than basic site work, including a hole in the ground for the power house, there is not much to show for the money spent.  A temporary camp is located elsewhere.


We are already into July.  Labrador summers are notoriously short.  Surprisingly, no work is evident on the temporary dome, the $100 million covering proposed by Astaldi to permit winter construction. 


No work has begun on the North Spur “stability problem”, either.

Nalcor plans to have first power when?

This is not just a picture of money squandered; it is an image of a weak Provincial Government.  Strangely, it is also the product of even weaker and conflicted Opposition Parties who lack the courage or the vision to put up a fight.  It is a picture of an energy agency (Nalcor) out of control.  

But, as already noted, res ipsa loquitur....the thing speaks for itself. 

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P.S. Tomorrow, Tuesday July 8th this Blog will feature a review by David A. Vardy of  Cabot Martin's new book: "MUSKRAT MADNESS". The book is available at Afterwords Bookstore, 245 Duckworth Street, St. John's.

17 comments:

  1. Des. This picture is very telling. It is likely due to the delays Astaldi are having in ramping up the project, in finding people, and implementing the dome. It is also a damming indictment of the concept of "front end loading" which Nalcor often talked about as derisking the project. It is bullshit. This is a very risky project, in a very risky location. There is no way to spin it otherwise.

    The greatest tell to me on a project schedule is the award of subcontracts. The montly benefits report clearly shows that Nalcor are very late in these awards, including the dam construction. I am not sure where Ed Martin gets the notion that 90% of contracts are awarded? Nalcor should provide the proof, because this statement does not reconcile with their montly online report.

    I am changing my view on stopping the project. I thought it was too late. However, I am no longer certain. It is time to pause, look at the earned value (Budget versus actual) on the work completed to date, and review where the estimates are, all in public review. They should delay the power house until after Hebron, and White Rose. It should be a staged development, which is what many people were calling for 3 years ago.

    After reading Cabot Martin's book I can only conclude that Nalcor's greatest weakness is their unbridled overcondidence in their abilities. Those of us executing projects on a daily basis in NL truly understand how difficult it is to bring a project in on budget (albeit smaller) in this current climate.

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  2. I think it's time for the opposition, in particular Dwight Ball to come out and publically ask or demand a further review of this entire fiasco and that work cease immediately. I find it very concerning that the people of this province will have to bear the brunt of Nalcor's mismanagement for years to come. If they are incapable of maintaining power on the island as was witnessed last winter due to poor maintenance and otherwise sloppy management, how can anyone trust them to take on this project. The entire feasibility of Muskrat Falls was seriously in question long before the current and future cost overruns and interest charges were even factored into the equation.

    There comes a time when you have to cut your losses and now's the time for the liberal party to step up to the plate and take a stand on this matter. Letting it continue without a fight is not satisfactory, nor is it ok to replace the current incompetent government and say we're left with this mess. Do something now. None of the declared candidates for leadership of the PC party have the faintest understanding of this project from an economically perspective which leaves Ed Martin and his crew to continue spending money as if we had a bottomless pit to draw from.

    Look forward to your comments re; David Vardy's review of Cabot Martin's book.

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  3. Why the secrecy on Nalcor's part? Is it so bad that Uncle Gnarley has to publish smuggled photos on a blog? This is not a Soviet-era Gulag, nor a North Korean prison camp. It is a publicly funded infrastructure project which should have free and open access to the media and daily public tours. Looking at that photo I see excavation, some cranes, and a few trailers. Not thousands of workers tying steel and pouring concrete. Stop this clust$&@$ now.
    Thanks for the pic Uncle as confirms just what I thought was going on, not much.

    John D Pippy

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  4. We need to have a long-term sustainable power source and this is the best option on the table. Everyone is quick to condemn the mega projects, but without them we would never have anything but backwards 4 year plans. Any gov't that tries to offer anything ambitious is condemned by the armchair joker politicians like Brad Cabana and the smrt people who know better. That's the reason most Gov't only make plans that are 4 years, because they are afraid to plan beyond the next election. I applaud the vision of this project, in 50-60 years, we will look back and know it was a success.

    The bottom line is that this is a long-term solution to NL's power problems and will live beyond the current administration. And will usher in a new era of self-sustainability for NL. In the next election when the PC are voted out, do you really thing the Libs will cancel this project. They won't, becuase NL needs it and everyone knows that. What else will we do, expand Holyrood.

    It's easy to coach from the sidelines and I bet everyone here also knows how to make the leafs win a stanley cup.

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    Replies
    1. We may need the power in 20-30 years. Fortunately we have the Upper Churchill which in 25 years will provide us virtually energy for free. Nalcor should build the line, and simply buy the power from HQ prior to 2041.

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    2. That is a ridiculous argument. We are now talking about doubling our per capita debt to provide a relatively small amount of renewable energy. Your argument only holds if the money amounts are omitted and the economics are ignored. newfoundland is a small population that cannot afford to ignore the reality of money and economics. This unfolding fiasco will bankrupt us and drive us back to commission of government.

      John. D Pippy

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    3. Mr. Anonymous...you can do better than that. Just stating something is good/bad does not stand up to the acid test. Provide your case rather than regurgitating gov't or Nalcor's perspective.

      A friend of mine who works for a utility out west trading natural gas futures contracts told me some three years ago there was a presentation about major energy projects planned/proposed in North America. MF was referenced on one slide with one word next to it. The word was "Uneconomic".

      That has been the main point of criticism from day one. This should be a slam dunk because it's is public money.

      Keith

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    4. This comment is dripping with arrogance. It makes me wonder where it came from. Seems kinda close to somewhere/someone as this "Anonymous" person is taking any criticism of Muskrat Falls and Ed Martin pretty personally it appears.

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    5. What do we "need" this power source for? The provincial population and industrial consumer base is shrinking, and once saddled with the cost of Danny's Vanity, will shrink further and faster.

      By the anniversary of the first Commission of Government, NL will be under its second.

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  5. One might wonder why, with a 8 to 10 billion cost to bring MF power, with 800 Mw capacity, to the outskirts of St. John's, we now need to spend another 297 million for a third 230kv line from Bay D'espir to Sunnyside.
    And why the two large generators at Holyrood, originally intended as a valuable asset to give voltage support post MF,( to run as synchronous condensers) are no longer adequate for this purpose... 3 new much larger units are now intended for the Soldiers Pond site. Or why even more synchronous condenser support is needed , and was intended to be part of the new gas turbine capability..... which since it was recently purchased in a rush, does NOT have this feature, requiring more cost down the road
    . The need for all this synchronous condenser stuff, a major capital and upkeep expense, is the lack of the robustness of the entire system, even with MF. It is needed to compensate for lack of robustness. Hence the third line for 297 million... to prop up robustness.
    A third line was necessary as part of the Isolated Island Option to get more of the island hydro power to the Avalon, without MF. But this new line extends only to Western Avalon, near Long Harbour. East of Long Harbour we will still have only the old 2 line system with 518MW maximum capacity total. One of these line, TL201 will overload if the other , TL217 goes down. And near St. John's. one of the 3 lines, TL266 will overload if one of the other two goes down.
    This is a reliability nightmare, especially if the DC line from MF goes down. So watch for more applications and rate increases in the near future for additionally 230 kv lines on the Avalon. It is so stated in a sneaky way in the current application.
    The problems crop up from stability and thermal overload studies when assessing what happens when electrical short circuits occur or when an individual line is down and the consequent effect on the system. Of significance, no case is run for the assumption of the MF line going down! Yet is subject to more risk than any of the other lines, and could knock off 800 MW versus 2 to 3 hundred MW loss from the other existing lines.
    The report notes that the results of the study depends on the assumptions made. Clearly, the report to justify the new line to the Avalon assumes 100 percent reliability for the MF dc line.
    Surely a reliability study should contemplate the effects for the DC infeed going down. It is similar to the recent circumstance of losing all 3 of the large units at Holyrood causing rotating outages. Such a contingency as losing the DC infeed may very well be done later to satisfy the Liberty and PUB Inquiry, but by then the 297 million will be committed, on an application that seems to intentionally mislead and avoid good engineering and planning principles. Lets hope the PUB send the Application back to Nfld Hydro.
    Yet another assumption madeby the study is that for electrical faults: that the breakers will operate in 100 millisecond, this being one tenth of a second. With the serious outages of 2013 and 2014, few if any breakers operated this fast, and sometimes taking 10 longer or more. A combination of cold weather and some corrosion on the breaker mechanism(from poor maintenance) slowed the breakers and triggered a collapse of the system. So how robust will the new system for be if the breakers take even two tenths of a second to operate? Surely we should know this, for reliability assessment. Winston Adams, Logy Bay

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  6. My posting, last paragraph, should read "few if any breakers operated this fast, and sometimes taking 10 TIMES longer or more"

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  7. One might conclude that the new third line adds to reliability of power supply to the industrial customers of Vale Inco and the refinery at Come by Chance. Similar, with the Maritime link there will be a third 230Kw line going west, adding to the two existing lines west. With no third 230KV line yet applied for east of Western Avalon, it appears our supply, on the eastern Avalon, from our island hydro power comes secondary to Nova Scotia and the Industrial customers. Winston Adams

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  8. I have never wavered in my calls for a complete halt to MF and, ultimately a disbanding of this ill-conceived project, if given a full and impartial hearing before the PUB. That would, of necessity, include independent experts with no vested interest in currying to those who hire them. Winston Adams, and others with his background, are much better equipped to explain the technical issues that a layperson like me, and I thank him for explaining it here.

    The person who made the comment about this being a long-term sustainable power source fails to acknowledge the astronomical cost associated with it. Yes, it can be built….but already it is 40% higher than when first announced, and we are not even close to completion. There is no doubt in my mind that the costs will continue to escalate…..and it is already straining at the so-called "break even point" first articulated by one of its chief proponents, Wade Locke. Only a fool or someone with a vested interest, would cling to the notion that this is a viable project…and it will get progressively more dismal in terms of final costs.

    Yes….it is high time some politician, of whatever political stripe, stepped up to the plate and called for an immediate halt to MF. On Saturday, I sent emails to Dwight Ball and Derrick Dalley, asking both of them to consider doing just that. So far, I have had no response but I would suggest that, if any of you have not already done so, start sending frequent emails to these and other politicians.

    As well, although I currently live and work in Alberta, I would like to see a strong public rally and public protesting start to emerge….something that would make the architects of this debacle take notice. In August, I will be in the province for a couple of weeks and would be happy to participate in any way possible.

    It is NOT too late to stop this project and regain some fiscal viability for the future.

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  9. One has not to worry about Dwight Ball coming out to comment on Muskrat Falls. He is not interested in rocking the boat unless it will be in his favour.

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  10. A weak government run by the CEO's who have funded the past PC elections and party costs. This is the same government who have been told to keep quiet and allow Martin free reign with Nalcor / Muskrat Falls - full speed ahead and damn the torpedoes - we are making billions!. I am starting to feel assured that our opposition (especially Dwight Ball) has also already been bought off. These big corporations know that the Liberals will be the next government so I'm guessing that they have already paid big bucks and promises to SHUT-UP the official opposition - soon to form government!

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  11. Your photo & thoughtful post brought to mind something I read recently. I was looking for a book to read on vacation, so I took along Rolf Dobelli's entertaining yet instructive _Art of Thinkings Clearly_. He has a short chapter on the fallacy of "strategic misrepresentation," which has a passage that stands out as particularly relevant to your post and the comments others have made in response:

    "Most vulnerable to strategic misrepresentation are megaprojects, where (a) accountability is diffuse (for example, if the administration that commissioned the project is no longer in power), (b) many businesses are involved, leading to mutual finger-pointing, or (c) the end date is a few years down the road."

    Dobelli recommends:

    "When it comes to projects, consider the timeline, benefits, and costs of similar projects, and grill anyone whose proposals are much more optimistic. Ask an accountant to pick apart the plans mercilessly. Add a clause into the contract that stipulates harsh financial penalties for cost and schedule over-runs. And, as an added safety measure, have this money transferred to a secure escrow account."

    Nalcor's problem runs much deeper than site management or a reliance on vapid blather about comfort and cost envelopes. The root of the problem is governance. Nalcor has the accountability of neither a publicly traded corporation that must answer to multiple shareholders via public disclosure, nor a government division that must answer directly as a line department within a professional civil service.

    As for the politics of Muskrat Falls, I agree with the commentators who stress that Dwight Ball needs to speak out now, strongly and clearly, that the project must be stopped. The lack of progress at the site opens a window of opportunity to shut it down before billions more are wasted.

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