Thursday, 20 April 2017

DON'T EXPECT NEW OVERSIGHT MEMBERS TO BE WALLFLOWERS


The Ball Administration recently made four new appointments to the Muskrat Falls Oversight Committee. Two professional engineer Jason Muise and Memorial Economics Professor Dr. Jim Feehan are longstanding anti-Muskrateers, “naysayers” in the idiom of the Wiliams/Dunderdale era.

Now the Committee has three who tried their best to warn successive Tory administrations of Muskrat folly, including Bern Coffey the Clerk of the Executive Council, who is the Chair.

While those appointments seem a step in the right direction, for the present I am inclined to counsel caution that they actually represent a shift in the way oversight is performed.

Two others an accountant and a former bureaucrat were appointed along with Muise and Feehan.

The four joined the Deputy Ministers who have inhabited the Committee from the very beginning. Of course, the latter should only be ex-officio, available solely to give support to the independent members of the Committee.

Jason Muise, P.Eng.
The Deputies long ago demonstrated their unsuitability, allowing themselves to become pawns of Nalcor and to be used for a political purpose  to give the illusion of “oversight”. They didn't have the professional qualifications and experienced for the job anyway.

A complete revamp would have seen the Committee restructured and given the benefit of additional experts whose resumes boast megaproject expertise in both project management and oversight roles.

Chalk up another missed opportunity for the Premier.

That is unfortunate.

Seventeen months after a general election in which the Tories were decimated, we still await just one positive surprise from the Liberals. The Muskrat Falls project has climbed to $11.7 billion. How much convincing does this Premier need. 

The province yearns for some manifestation of serious leadership moreso even than we pine for the summer sun.

The public shouldn’t forget that, rather than as part of a sensible system of checks and balances, Dunderdale thought oversight an affront to then Nalcor CEO Ed Martin as if his interest exceeded the public’s. Former Premier Tom Marshall was no wiser.

Under Dunderdale, Nalcor consolidated its control over every government decision that impacted Danny Williams’ energy warehouse mandate. Though it had not a clue how it would go about giving it responsible and intelligent implementation, the crown corporation was never prepared to have its professional and intellectual deficits exposed by better people.

The result is the current mess.

A savvy Premier  even just a sensible Premier would have rushed - on day one to install a group capable of holding Nalcor to account: to assess management performance, review contracts and contractors, get to the bottom of cost overruns, insist on diligent quality control procedures, and keep tabs on the all-important schedule.

Ball knew that the Committee that Tom Marshall had struck was patently useless. The PR types at Nalcor had told Marshall that all he needed was a committee bearing the name “oversight”. The public and the media wouldn’t differentiate it from the real thing anyway. 

And they were right.

Memorial Economist, Dr. Jim Feehan, Ph.D
The Deputy Ministers were content to be wallflowers for the Tories. Besides, Stan Marshall has exhibited only the proof that the skills necessary to revamp Nalcor management and put Muskrat on a stable trajectory are not in his tool box.  

In short, the Premier needed to signal straight away that real oversight, not the fake kind, would be a hallmark of his Administration.He needed to demonstrate that while the Committee, under his leadership, was dormant he had had been searching not just for new members, but writing a new mandate and defining new powers under which it would operate. 

In so doing, Ball might have been expected to prescribe a budget so that the Committee could initiate independent study and analysis of Muskrat’s management and operations.

He might have released a copy of the letter he surely must have sent to Stan Marshall.

The letter would constitute an order that the new and real Oversight Committee had been given unfettered access to all of Nalcor’s data not just the information Marshall or V-P Gil Bennett allowed.  

Indeed, the Premier might have sent extra copies of his instructions principally for the benefit of Gil Bennett in case he lost the first two or three copies possibly on Project Manager Paul Harrington’s desk, where they might have gotten buried along with that elusive Report into the collapsed concrete formworks. That incident occurred a year ago. Any Owner worth his salt would have received a report within 48 hours. As it stands, a response to my second ATIPPA request for that same report still awaits.

Having failed to do any of those things, the Premier confirms he does not well understand oversight either.

Shouldn't he have told the public that the "new" Oversight group will have authority to look back as well as ahead. Wouldn't he want them to examine how Nalcor fiddled with the numbers in order to obtain sanction? 

Couldn't he have assured us that the Committee will have the power and the resources to instigate an independent review of the North Spur remediation plan?

Are such activities not fundamental to the very notion of oversight?

To his credit Ball has added two very capable people to what is arguably the most important committee of government right now. He has added to “fake” the strong integrity of Muise and Feehan. Unfortunately, he has committed none of his own.

For people of their calibre, Ball should know that if he can’t do more if he can’t empower them to use their knowledge and talents to perform they, likely, won't risk their reputations on his behalf. 

Unlike the Deputy Minister, they won’t stand to be wallflowers, too.

101 comments:

  1. "Nero fiddled while Rome burned." --The can keeps getting kicked down the road. Surely to God there must be someone or group out there who has the knowledge and gumption to have this challenged in the courts.
    We are being screwed every day and with all the talk on UG (nothing or next to nothing in the mainstream media)and still no action.
    Has anyone with the expertise ever contacted "The 5th Estate" or "W5" explaining what they suspect and know of this boondoggle? This avenue seems to be our only recourse in getting answers.
    Wanna bet that the "Oversight Committee" has been told not to speak to anyone other that Government who will then keep the status quo. Boy O Boy are we as a populace going to be "dumbstruck" when our 1st MF power bill comes in!!
    Everyone is afraid of Danny's wrath (including me as I will not use my last name because I have grandchildren in university and college who will be looking for employment after they graduate).
    It is so sad one man can instill that much fear onto the public.
    God help us! Bankruptcy appears to be imminent and our only salvation. We had our chance with all the oil revenue only to be put where we now find ourselves.
    For the Government to pay the bills we are being gouged with taxes and levies with no meaningful cutbacks in spending. Mr Ball you cannot keep this up-- Oil prices will not rebound to where they once were.

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  2. I am somewhat confused by this post Des. You feel the new members of the oversight committee have integrity, unlike the premier. You outline that there is no apparent change to the mandate that is much needed, giving them the ability to do oversight and access what successive governments have denied.

    As I have pointed out in previous posts without the clear empowerment we both feel is essential to make this committee functional this move is no more than putting lipstick on a pig.

    The question a cynic has is without a clear signal up front that the mandate is broad enough to do oversight what can Muise and Feehan do to breach the Nalcor wall of silence? How could they step in this pile of doo doo without getting it all over themselves?

    I sincerely hope my cynicism is not well founded. It will take evidence and not blind faith to convince me.

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    1. I would not expect any change in the government's commitment to complete Muskrat. The oversight committee is just another version of "Professional Reliance", (Self regulation). Somebody contact the UBC Site C study group if you want a more objective oversight. Folks, It's about the jobs, and political promises made!

      http://www.cbc.ca/news/canada/british-columbia/to-sell-jobs-message-b-c-liberals-need-site-c-1.4075077

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    2. Thanks Robert. I just Gooogle "bc sell jobs site c" and up pop the CBC article. Google is really smart sometimes, except if you want an a photo of me, and google "images Winston Adams", you get photos of Andy Wells of the PUB, or John Adams, the second USA president , or even the painting of March March done in 1818. In which case Google is pretty stunned.
      How come CBC does this piece (and it is called ANALYSIS), and here there is no media analysis,...... but we will get it when Ashley (at the Telegram) gets her course from her scholarship. Analysis here is by Uncle Gnarley, vision 2041, Dave Vardy, and the mysterious JM, Cabot Martin etc, and Ed Hollett, before he gave it up recently, now with a Think Tank, and writes letters to the paper. My analysis is rather restricted on the potential of demand and energy reduction through efficiency and conservation,(Demand Side Management) a subject foreign to the power companies, here, and MUN.
      The BC article mentions that the size of Site C, at 8 percent of the overall BC grid capacity, is large, unnecessary and not least cost.
      Here , Muskrat is 25 percent of our peak capacity on average, and with Muskrat at full output for short times, it is 40 percent of our existing peak capacity. Manitoba Hydro stated that this large an addition was more risky. Now with forecasts for load growth dropping, it is way more risky now than initially, so this caution was ignored.
      So, in capacity Muskrat is 3 to 5 times more than Site C. And our fiscal capacity is much, muck less than BC..............so, it is an indication of the scale of the boondoggle here, needing OVERSIGHT. What class of engineers and economists can fix this? And is putting Muskrat ON ICE an option? I doubt it. More oversight, probably just more lipstick on the pig, an attempt to limit the mass of debt (as big as an Egyptian pyramid) from growing bigger, and limit further delays (already a 9 year project for "on power",....... as long as WW1 and WW2 combined!) .
      Think of that....4 years in the trenches of France, the 3 years for the build up for D-Day, the development of the atomic bombs, the USA building bombers at the rate of one per hour, no cars built for 4 years for dedication to war, hundreds of cities destroyed and and tens of million killed,,,,,,,,in less time than it takes to get us Muskrat power. And the Marshall Plan to rebuild Europe was some 13 billion.......and Muskrat will probably exceed that. Indeed, we are world class, you might say!
      Winston Adams
      Used to be make work was for the poor and unemployed, to carry rock from one pile to another. Now we are world class at make work, and at extremely high wages, and Ed Martin ,the 6 million dollar man on this! Which make me wonder ......are the new oversight people a DOLLAR A YEAR people, to help the province in its hour of need. If not, all of this oversight, the multiple layers of it must be costing a fortune.........but who really cares....it is only borrowed money,hey.
      Winston Adms

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    3. This is not new or unusual. If you can, get the video of the building of the Grand Coulee Dam in Washington State, 1933-1940. Roosevelt seized on the project as a job maker when times were tough. They hired Woody Guthrie to write "Roll on Mighty Columbia Roll on". It was the boondoggle of the day, destroying for ever the Indigenous salmon fishery, which fed generations of these people. Only WWII and the Boeing plant in Seattle, aluminum production reversed public opinion and confirmed economic benefit.
      Were the NL government to build a Rhur Valley in Torrington Basin, bring Voisey Bay nickel, Lab West iron ore, thermal coal from afar, (Elk Valley), some economic values might help Muskrat make sense. Some 10,000 worth while jobs centred in Goose Bay might be the result.

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    4. Watched this on PUB recently, and reminded me of Muskrat, with aboriginals getting shafted, getting some compensation some 50 years later, and no low cost power for them..........like coastal Labrador on diesel while Labrador power warms and runs cities a 1000 miles away. Coulee was a boondoogle until Japan's attack on Pearl Hr. As some have said in the past, all we need is a good war..........and Trunp may deliver on that, this more likely than turning l
      Lake Melville into the Rhur Valley. Made no sense to me why the government forced Inco to build the plant in Long Hr instead of Labrador. Labrador and its people just being exploited, as it always has been.
      300,000 salmon was being fished from the Columbia before they build the Coulee Dam........
      Robert , the North West Energy group, some 100 power utilities see energy efficincy as a 3 to 1 cost advantage over new generation, and are active in that, and therefore sales of BC hydro into that market is less attractive I assume. The North East power companies in the USA, Vermont, Mass., NY etc do the same , this past 15 years......so Muskrat is not competitive, and Nova Scotia is big into that.
      Why has MUN not promoted this in any analysis.......oh , I forgot....Wade Locke was HUGEEEEEEEEEEEEE on that idea, I have his emails on that! He thought it was a great thing.......to keep quiet on,.... very quiet. Didn't fit the agenda, then nor now.
      WA

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  3. I agree that the new oversight committee members have a difficult job, but not an impossible one (it is akin to using a 4 HP outboard motor to change the course of a supertanker).

    It will be quite a test, not so much of their expertise/competence, but their integrity and will/ability to put the interest of the province ahead of their own.

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  4. Halilu'ya, just in the Supreme Court Of Canada will hear the CF contract unfairness, redress case. Good news but still 3 judges from Quebec, 3 from Ontario and NL has just 1 lonely boy!!! Good luck in the quest for justice within the federation!!!

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    1. http://www.cbc.ca/news/canada/newfoundland-labrador/supreme-court-canada-review-churchill-falls-energy-deal-1.4077258

      From above article:

      Nalcor argued the contract was broken by "unpredictable events" that have transformed the energy market and obliges Hydro-Quebec to revise the original terms of the agreement in order to regain balance.

      From previous rulings (to be reviewed by the SCC):

      Five appellate court judges that heard the appeal felt Nalcor Energy was trying to "redefine the initial balance" agreed to between the parties.

      "The uncontradicted evidence established that the parties knew that the value of hydroelectric power was likely to fluctuate and have voluntarily agreed fixed prices for energy," they wrote in a 61-page judgment.

      The court also found the general principle of "good faith" as found in the province's civil code doesn't apply to Churchill Falls as the contract has remained "profitable" for Newfoundland. The benefit generated by Hydro-Quebec is the result of changes in the electricity market, the ruling said.

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    2. Sorry Ex-Mil but the crumbs that HQ has provided along the way to keep CFLco solvent and profitable just doesn't cut it!!!and the Quebec courts are biased big time!!

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    3. Anon: ...3 judges from Quebec, 3 from Ontario and NL has just 1 lonely boy!!! Good luck in the quest for justice...

      So Anonymous, how many judges should be from NL at the SCC? And how would other provinces feel about that?

      Do you also believe that the 3 Ontario judges normally side with Quebec? And they would naturally side against NL in this case?

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    4. "the crumbs that HQ has provided along the way to keep CFLco solvent and profitable just doesn't cut"

      From the article: "The dam has generated more than $26 billion for HQ, compared with about $2 billion for NL".

      Above seemed sufficient to fit that ruling: "The court also found the general principle of "good faith" as found in the province's civil code doesn't apply to CF as the contract has remained "profitable" for NL".

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    5. I think the lonely NL judge should recuse himself and take the 3 Quebec judges with him. For certainty, let's take all the bias out altogether and have the first fair hearing on this matter ever.

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    6. Interesting concept, each time a province(s) is(are) a stakeholder in a SCC decision, it should just recuse himself and let other provinces decide/vote on its behalf...

      Not sure how this would fly with, lets say, Ontario...

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    7. So again, the single aspect of the CF contract that's causing all this drama is the following:

      Ruling: "The uncontradicted evidence established that the parties knew that the value of hydroelectric power was likely to fluctuate and have voluntarily agreed fixed prices for energy,"

      Nalcor had to destroy (somehow) above evidence to win this case.

      Again, inflation/deflation clauses were purposely/knowingly not incorporated in the CF contract as BRINCO/CFLCo could afford any possible revenue shortfall while making considerable monthly payments. (In the 60s, there was deflation in electricity prices, and the was expected to continue)

      So Anonymous, was kind of contract should have been signed in 1969? BRINCO should have included inflation clauses but prevented any deflation provisions? Who in hell would sign such a one-sided contract then?

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    8. Sorry, meant: ...BRINCO/CFLCo could NOT afford any possible revenue shortfall...

      and: ... was deflation in electricity prices, and THAT was expected to continue...

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    9. I am not sure what CF has to do with this discussion but I get the impression that NL learned nothing from that experience. Given the intensity of feeling about the Upper CF, I would have expected NL to be extra careful to avoid making similar mistakes in the development of the lower Churchill. However, I see that NL is already seeking to renegotiate the deal with Emera on the Maritime Link.
      http://globalnews.ca/news/3042192/nova-scotia-to-pay-next-to-nothing-for-muskrat-falls-energy-nalcor-ceo/
      These things normally should be negotiated before signing. I am trying to think of an example of an entity saying okay, I really should renegotiate this because I have earned too much from this deal. Please, refresh my memory. The point is, HQ was not interested in a profit sharing agreement. Since they were assuming all the risk, they wanted to be able to count on long-term costs similar to projects that could have been completed within Quebec. NL seems to have assumed that a long-term fixed price agreement was fine, but only insofar as prices didn’t change much. In any event, which deal would you prefer – the deal that was signed or no deal. Those were the only two available options. The option of profit sharing on the upside but not on the downside with HQ bearing all the financial and operational risk for the biggest hydro development in the world was not on the table.
      As JM has pointed out, the CF contract is written in the simplest terms possible (http://unclegnarley.blogspot.ca/2017/03/emera-silently-building-their-own-nl.html) . To use J’’s words
      One thing that is admirable about the original Upper Churchill contract is its efficient use of the English language. The 1969 Power agreement is succinct, simple to follow, clear in its expectations of both parties, and enforceable - as has been demonstrated on multiple occasions – to our great loss.
      Normally the courts evaluate a contract based on an evaluation of whether or not the original terms are respected. I think JM seems to agree that the terms of the agreement have been respected. Now, if such a simple straightforward contract has been repeatedly challenged in the courts NL, what can we expect from the agreement with Emera with its 26 separate legal documents with 5,000 pages of legal language. I am sure the NL Bar Association can hardly wait.

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    10. Bernard,
      The CF agreement/contract unfairly benefitted one party by the unknown circumstances that followed. That party has failed to be fair in addressing this problem. The problem remains and must be addressed. I hope the Supreme Court of Canada can be fair in addressing this matter, don't you?

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    11. Fairness in a contract has nothing to do with ex-post share of gains, Nothing left to discuss because your concept of a "fair" contract has nothing to do with the simple, clear terms of the agreement. But if you keep asking the Supreme Court the same question they may come up with a different answer, who knows.

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    12. Have to agree with you Bernard, not much chance of the Supreme Court overturning the contract on fairness, unless they take pity on Nfld, for some redress, but that is not the way of addressing contracts as far as I can see. Fairness is more dealt with under equalization, where as a country we share in hardship, one region helping another. However a project that had no consideration of aboriginal right might be invalid, I submit, but that is not the issue being put before the court. And if we have profited only some 2.5 billion to HQ some 25 billion, at least that is not the boondoggle of Muskrat as it now stands.
      We want to fault others while the promoters of Muskrat are rewarded, the CEO with 6 million, and cost plus contracts making fortunes for others.
      Maybe we need pity, as we elect fools and rogues.
      This blog comes to life with comments when anti Quebec opportunity arises, but too few are concerned about what our new Oversight Committee can or will do, as to Muskrat. And as acknowledged by several here, many are afraid to state their full name with their comment. This is the FREEDOM our soldiers died for! There is nothing to fear but fear itself, Roosevelt once said. He didn`t know our RNC and RCMP, and their masters. Here, fear is alive and well.
      Winston Adams

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    13. Bernard,this is savagely ironic after Marshall secretly sold transmission to Emera without a word to anyone. He has given away the inside track to Emera to take over Nalcor's hydro assets when this disaster at Muskrat implodes (or washes away downstream).

      Stan seems to revel in the secrecy that a crown corporation in a faux democracy provides. As CEO of a publicly traded company he had to report the finances quarterly. As the head of Nalcor with the secrecy provided by politicians, his co-conspirators, he can screw the rate/taxpayer with impunity.

      It is hard to understand how this can be allowed to continue.

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    14. Good point Bruno, as usual. The PUB was emasculated and the federal loan guarantee allowed the project to be financed without outside scrutiny. Anti-democratic as you say and there is no shortage of culprits. Is there any hope the new oversight can make a difference?

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    15. Quebec must honor its civil code and reach a fair deal on the upper CF contract. Simple decency and the most elementary sense of justice demands this of civilized people in 2017. Donald Trump be damned!!

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    1. oops, Anom just mentioned it a few minutes earlier...

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    2. Sorry Ex-Mil but your undisputed evidence has been disputed and challenged many times but sadly not accepted by biased Quebec courts.

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    3. We can respectfully agree to disagree. The Supreme Court agreed with the Quebec courts by the way. But Nalcor's argument is that the contract should be declared null because of events that were wholly unforeseeable. First, isn't that the only reason counterparties sign long term agreements in the first place- to protect you against unforeseen events? Moreover, when one signs a 65 year agreement, should one be surprised that wholly unexpected events occur? Finally, should the courts be imposing terms to an agreement that are different than those mutually agreed upon prior to signing. What kind of contract does one have in that kind of situation? I fully expect you to disagree with me but just throwing that out there with no disrespect intended.

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    4. Sorry Bernard , but you are wrong and justice must be right. This wrong is so obvious that it must be corrected in corrected any language. Right is right and wrong is no man's right. Quebec must get over it!!!

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    5. Remind me not to sigh a contract with you lol

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    6. I thought better of you until now, oh well.

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    7. "your undisputed evidence has been disputed and challenged many time"

      Dear anonymous, some of us did share some evidences/facts but I have not seen any from you yet.

      Would you mind sharing some with us? Even those that Nalcor should have presented to deny that both parties wanted a fixed priced contract (as opposed to incorporate deflation/inflation provisions)

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    8. You do realize that Nalcor failed to present any evidence disputing the agreed fixed price nature of contract - while both knew about price fluctuations right?

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    9. I thought better of you until now, oh well.

      Well that is too bad Mr Anon but "Fair" is in the eye of the beholder. We'll never agree on the 'fairness' of the Privy Council decision defining the border between Canada and Labrador but it is the law and mercifully Quebec has moved on. The border was based on the watershed. The border winds and dips to ensure that NL can lay claim to the headwaters of all rivers flowing into the ocean. Of course no such consideration is given to the determination of the Southern border such that Labrador is accorded the headwaters of 5 rivers flowing into the St Lawrence. No doubt that makes perfect sense and seems fair to you as well but certainly not to moi. Finally, I think that "fairness" in a contract is based on the respect of the agreed upon terms. It seems to me that the most foreseeable aspect of a 65 year contract is that surely something unforseeable will occur. The beauty of this blog is the high quality and great variety of opinion. If you think less of me for my opinions which differ from yours Mr Anon, then so be it.

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    10. Maybe Trump will look at how the 65 year subsidy of all Quebec industry, like aluminum smelting, should be shared with ConEd and passed on to big steel. Add that to his list.

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    11. Trump will really have a hard time to find any subsidies in the electricity sales to the industry - including those to aluminium smelting.

      HQ's actual costs are still a fraction of those sales. HQ legacy generating stations are even cheaper to operate than CF.

      Now, that "65 year subsidy"? Electricity bought from CF is definitely NOT below its production costs (i.e. construction, amortization, transportation and operating costs). So there are no subsidies here. Please try again.

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    12. The low price paid for CF energy, which is comparable to the cost of all the other hydro assets in Quebec built in the same era, does not constitute a subsidy. The low price of electricity charged to Quebec industry could perhaps be described as a subsidy but electricity is a special market. Unlike oil, delivery of electricity is a bit of a challenge. The price is low in large part because there is a large surplus in Quebec and no market to absorb the energy. For the moment, Trump is focused on another sacred cow in Quebec: supply management in dairy - meanwhile agricultural subsidies in the US total $20B. By the way look up energy subsidies in the US: they totalled $600B in 2013. Quebec is the King of subsidies but we aren't alone.

      Now can we get back to the topic. What are your thoughts on the new members of the oversight committee?

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    13. 26 billion dollars vs. 2 billion dollars

      maybe we can get dat ex boy scout to build us dat derrrr wall un huh

      les camadiennnnes

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    14. Build a wall, good strategy.

      I think you will find that in most contracts, when one counterparty assumes 100% of the downside risks and subsidizes the interest cost and FX risks, they will tend to insist on the lion's share of the upside. Go figure. You don't seem to agree with that but so be it.

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    15. i agree with trump on this one jim lahey.
      you made your money on the slave deal for 65 years. the renewal should be renegotiated. maybe NL will get some anti quebec luck in the supreme court. separate or something. boys will having a shorter drive to toronto.

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    16. And Smallwood's Nfld wanted exactly that: 0% of the risks, 0% of the costs & interests, 0% of the FX risks, but wanted all of the construction jobs and all the local spendings.

      Nfld got all the above, and then more. CFLCo will regain control of all its production back in 2041, for free.

      The total risk avoidance was the reason why Nfld gave away the Churchill river water rights (free for 199 years) to foreign owned BRINCO.
      => Never thought of selling it to a fellow Canadian maybe? And making some money in the process? <=

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    17. Very intelligent comments Mr Anon. I am not surprised you are a supporter of Mr Trump. Thankfully most people on this blog prefer intelligent comments rather than personal attacks and insults. I see you don't have the courage to attach your name to the comments but that is not surprising either. Have a nice day.

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    18. Why Anonymous aren't you irate/mad against BRINCO and Smallwood for that 199 years free gift of the whole Churchill river rights???

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    19. I wouldn't bet on our 2041 part of the deal yet. This is far from a done deal. I would bet this is being negotiated now to get us some debt relief. You're right, we got what we asked for in the UC contract and we cannot fault HQ (in all honesty). We assumed no financial risk whatsoever but a renegotiated agreement involving UC and Muskrat (I think) is on the horizon. Our only recourse is to involve HQ

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    20. I'm still puzzled why Smallwood picked a foreign owned entity (BRINCO) for that free 199 years Churchill river water rights gift. Especially when you have a neighbors, Quebec, that specializes in building just that, dams, dikes, generating stations, power lines in a sub-artic environment.

      Whether he received some kickbacks, or he (or Nfld?) had a profound hatred / disdain against Quebec.

      Anyone with historical knowledge could answer that one?

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    21. Thx Wayne, excellent points. Expect HQ always and everywhere to do what is best for HQ. That is how I would want my public utility to act to be honest. This is just business for them. They have no interest in renegotiating the deals that turn out favourable since I assure you, none of HQ's counterparties will renegotiate a deal that is favourable to them. If NL thinks the expected gain from another court challenge is worth the millions it will cost then by all means. I think it is another fool's errand but I could be wrong. I do think however that Mr Anon's argument that the deal should be renegotiated because ... well ... HQ made too much money relative to NL is not usually a winning argument in court but we'll see won't we. I am not at all convinced that any deal involving HQ is on the horizon. I am sure you know all about the distrust of HQ in NL. Well the distrust is mutual. NL's negotiating position is very weak. HQ doesn't do anyone favours, least of all Nalcor I do think that as a country something has to be done to savve what looks like a slow-motion train wreck. My view has been that the feds should assume their responsibility for MF by combining debt relief for NL with some kind of deal with HQ. I am not saying it is the best solution but it is the only one I could think of.

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    22. Smallwood was always very impressed with anything British, (named the Hamilton River for Churchill, lauded great UK Grits and liberalism, etc.). He met with Rothschild to sell his Hamilton Falls development scheme for British capital, and through his corporate political contacts such as Bob Winter, BRINCO, (British Newfoundland Co), became the original development corp, sponsored by the NFLD government of the day. This is my top of head recollection of the times, plus a quick read of the book. Others of my vintage may comment please.

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    23. Sorry Bernard, I have been away and there are too many anons, I guess. I do it because I am not looking for attention like most of the regular commenters on this blog. I am not a Trump fan but I do believe, like Brian Mulrooney did way back in 1981, that NL is owed a fairer share of the bounty from the mighty Churchill and most importantly because of Quebec's 1998 civil code requiremnets for fair contracts. Perhaps the appeal to the Supreme Court will bring that long awaited justice and I believe you will not disagree with that ruling in NL favor if it comes??
      Forget the 1927 privy council ruling for it is ancient history and stands forever and the 7 rivers are negotiable but we could divert the headwaters la Romaine to increase the output of Upper CF and the lower river plants, don't you agree.
      That is just plain good water management sense, isn't it.

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    24. NL should do whatever is best for NL. That is my point from the beginning. I get the impression sometimes that official NL, Danny Williams comes to mind, is more concerned with sticking it to Quebec than doing what is best for NL. Its an impression - could be wrong.
      With respect to CF I wanted to present what I think is the Quebec point of view because I don't think it is well understood. This is a legal issue, which doesn't necessarily have anything to do with what is right. I think it is naive to think that somehow HQ should renegotiate a perfectly legal agreement (legal until the next Supreme Court decision at least) because it has made too much money. Who does that? That would make as much sense as NL saying to HQ, you know the Privy Council intended for the border to be based on the continental watershed - we really should renegotiate the border according to the spirit of the decision. It won't happen and why would it? One final point though - there is some question as to where exactly the border is in the area of the Romaine. (https://bondpapers.blogspot.ca/2006/09/la-romaine-rock-and-hard-place.html) but once again I am not competent to comment further.
      The southern border is not ancient history since it affects development to this day. I would assume that if the diversion of the headwaters of the Romaine made economic sense, Nalcor would have already done so. I would expect HQ to have considered such a critical issue before proceeding. If not, then too bad for them. However, the fact that the headwaters are on this side of the watershed in a very mountainous terrain leads me to believe that diversion is no simple matter.
      By the way, I happen to think that the deal with Emera is remarkably one-sided. NL provides NS with 167 MW of free electricity for 35 years plus an option on a similar quantity at market rates. In return, Nalcor takes ownership of the ML at the conclusion of the deal. However, as far as I can tell the expected lifespan of submarine power cables is 30 – 40 years. (http://publications.jrc.ec.europa.eu/repository/bitstream/JRC97720/ld-na-27527-en-n.pdf page 44. How much will that asset be worth when NL takes over? What do you think the distribution of benefits will be in this deal? This deal was sold as 20% of the power for 20% of the cost. The deal is nothing of the sort. In the case of the CF, at least there was some quid pro quo. HQ assumed all the risk and NL got a risk-free annuity. I am left wondering what is in this Emera deal for NL? I must be missing something. Enlighten me, please. We’ll see how successful you are at renegotiating this deal after the fact.
      In any event, have a good evening Sir.

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    25. Just checking on your credentials with the Romaine headwaters thing and Cf2 since it was a pillar of the Tobin/Bouchard initiative, sorry friend. You obviously were not in that loop. My old friend Vandals was always up to speed but you were at a lower level in the organization, I guess. No shame, many of us were. Good evening to you also.

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    26. Lol, you can find my bio on the blog post I wrote for Uncle Gnarley in December - the little I know about these topics comes almost entirely from the fact that I am an avid reader and not because of any Professional experience - that is also mentioned in the blog post. You can ask your friend Thierry Vandal next time you see him.

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    27. Yeah, I know Bernard but professional credentials are important and I know I have some, tres peu, and our friend Thierry has them also but hey he never practiced them and I can assure you that I have. But that does not count because I am anonymous right! I am not laughing, just commenting, sorry again. I am not concerned with your credibility. You have a great evening.

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    28. Interesting, and intriguing Mr Anon - you appear to know much more than moi - which is not hard actually - but what do you think of the deal with Emera?

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    29. Bernard, it stinks, big time!!

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    30. Wow, Thierry Vandal had rather intriguing friends on the rock...

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    31. You bet, the best, and a bientot to you too ex-mil.

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  6. The audacity of hope....as opined by Obama, now being looked at about 50 years after the fact......if there is any injustice , the wheels surely turn slowly......... and i was long of the opinion that the aboriginal people of Labrador was done in by both Nfld and Quebec, as they were never consulted by either provincial govn, and the feds did not protect their rights (they never signed any treaty giving up their rights, nor were they defeated by war) and only a challenge by them might prevail..........and they may have signed away that right with the NEW DAWN agreement with D Williams.
    Winston

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  7. Will the Supreme Court decision have any effect on the water management agreement? If this goes in Quebec’s favour, shutting down MF dam project is the only sensible option, not that sensible has anything to do with Nalcor or the Government.
    Gerry, No last name same reason as Wayne.

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    1. Water Management Agreements are grossly overrated as water flows downstream regardless of any agreement!! Can't stop it very easily, can you!

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    2. For the first time, I kind of agree with you; yes it will flow downsteam regard regardless - but about 6 hours after being turbined at CF. And it must be turbined then or it gets wasted (No meaningfull reservoir at MF).

      HQ uses CF extensively during winter peaks, and much less so during summer - when CFLCo performs maintenance. So much less that in the summer, MF will barely be able to even produce the Emera bloc.

      Not sure how Nalcor will be able to plan in advance MF production under those circonstances.

      The WMA was allowing Nalcor to use HQ energy storing capacity for its own benefit, for free.

      As a result, HQ would not have been able to extract as much power during winter peaks as it would have otherwise; having to divert some to Nalcor - which has similar winter peaks needs.

      I'm sure some kind of agreement can be still reached, as long that it doesn't affect HQ winter peak production capacity.

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    3. If you believe the WMA is overrated, Philip Raphals’ study (Muskrat Falls’ Contribution to the Reliability of the Island Interconnected System - available on the web) may change your mind.
      Here is a very brief resumé of Raphals’ conclusions:
      Daily average winter generation at the MFGS has in the worst case, fallen as low as 418 MW. Taking into account line losses, this translates to about 385 MW at Soldiers Pond, of which 167 MW is committed to Emera in the Nova Scotia Block, leaving just 218 MW of firm capacity available to the island of Newfoundland – less than one third of the 673 MW 13 of firm capacity identified by Nalcor. The unavoidable implication is that the capacity balances presented by Nalcor systematically overstate available firm capacity (power available in the worst historical period), by up to 400 MW.

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    4. 218 MW at soldiers pond...........now at a price tag of 12 billion
      The new gas turbine added last year has a capacity of 123 MW, and cost about o.1 billion, 100 million!
      Half our houses fitted with heat pumps, as Nova Scotia did, would have saved 12 billion and actually reduced yearly power bills for residents.
      Anyone familiar with Energy Efficiency for customers?
      Oh yes , forgot.the new budget allows for loans (not zero interest rate, but 4.2 percent, so they rake off half your savings) to cover 100 houses....that's right about 100, called the HEELP program. Take charge has it up on their web site already for new houses.....but does not kick in until this fall, and as most build in the summer, before ground freeze up in the fall, the fall roll out is really convenient!!!!!!. Just like awarding road work in the fall instead of the spring! First Class way of doing things. HEEEEEEEEEEELP
      Take Charge also gives a 10 dollar rebate on programmable thermostats.........to make sure peak load increases at 8am, causing holyrood to fiire up an extra 100 mw or so..........very clever those Take Charge people. Past time the people and customers took charge. The Take Charge Croud is robbing us blind and using our money to deceive us. About time it stopped. Customers need REAL HELP, not deception.
      Winston

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    5. As to subsidy of power to the USA.........as to any Muskrat power going direct to USA via Emera trassmission lines, the so called gravy revenue , where Minister Kennedy talked about selling at 1 dollar per kwh at their summer peak demand time.......
      MF is something like 55 cent cost delivered to Soldiers Pond. American power is produced with natural gas at 2 or 3 cents. MF power direct to the USA would be dumping would it not?
      Is the decision of bringing MF to St Johns, and our island power to Nova Scotia also a way to avoid the charge of dumping? If so, then the suggestion of MF being economic and with export revenue potential a deception (a false assumption) from the start? And if MF transmission is unreliable and subject to more outages than expected.....too bad, ..... was not the original intend to have a station around Corner brook and some MF to go direct to NS and USA....but got changed?
      Winston

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    6. Those are excellent questions Winston and I wish I knew the answer. I wonder about the capacity to export MF power to the US. The border is far enough but the large centers of population, like Boston are much farther still. There is also the question of transmission capacity. The ML capacity is 500MW - 167 MW for the NS block but Emera also negotiated to get first dibs on another 167MW (or so) at market rates. THe proposed sea cable from NS to Massachusetts will be a key development to allow NL to export MF to the US. Given current prices and assuming the transmission costs mught be expensive, I am not sure about the profitability of that idea.

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    7. Bernard, I think that profitability does not only attach itself to the Quebec route for transmission lines. The maritime route distances are comparable and technology has advanced, so other factors must come into play in the economics of the situation. Quebec can no longer be the only kid on the block and control the market and that is a good thing for NL. Quebec failed to buy NB Power assets even though they tried hard. After all variety and competition is the spice of life. Let's have free-er trade, hail NAFTA.
      I didn't start that "crazy Asian war" but the MF ship appears to have has sailed too far to be reasonable to stop now!

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    8. all good points anon - my point was that I wonder if the overland route from NS to NB through Maine has any spare capacity. It is getting progressively harder for HQ to get access to the US market because of the difficulty of getting environmental approval for transmission wires. The proposed sea cable from NS to Massachusetts is a game changer. However, prices are currently so low that they may not cover transmission costs - that is an impression, not a fact. And yes, of course it is important for NL to have alternatives.

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    9. Competition is generally good, but good for who?
      Nalcor is a monopoly who won't allow others produce electricity in Nfld, the result being to likely drive up power rates to 20 cents or more, vs about 7 cents in Quebec. Power costing 55 cents we either give it away free or get about 5 cents, so a very large loss ...on the backs of Nfld residents. Competing with Quebec is good for Americans to get cheaper power.
      Would make more sense for Nfld and Quebec to work together long term and mutual advantage. The CF issue is a sticking point of mistrust.....but is not the boondoggle of MF. And the added cost of more capacity for transmission via NS is added expense. ...........lets face it , Nfld may have resources but other provinces have the route, and we are boxed in .....the Anglo Saxon route is "no profi"t warehouse for Nfld. Stupid idea in 2012, stupid now......and Feehan and the new Oversight Committee......to merely help mitigate the mess, and little they can do.
      Feehan on TV says their mandate is not to address the North Spur issue........so therefore the 6 billion power asset could be at serious risk..... that is someone else's issue he says.
      Feehan has already expressed concern that residents may invest in energy saving efficient heating, which is detrimental to MF revenue. So his solution is to moderate rates to avoid that........good luck with that.
      I predict that rates in two or three years will not double but be 16-18 cent range, the difference being picked up by the tax payer, so litle overall difference, but better than 20 plus rates, as to the economy. Don't need a Phd in economics to realize that. Angry residents will soon show politician that.
      But already considerable numbers are converting to efficient heating, with power at 10 cents, and to reverse that trend, power would have to drop or stay at 10 cents.......it is already cost effective to have efficient heat, so uptake of that will continue upward, so Feehan may mildly slow that trend, if at all slow it. Feehan is as I expected , the "ugly" economist..... help MF go forward, no putting it ON ICE for review, and being anti conservation, and anti customer efficiency. The others on the committee must be of like mind. So UG's speculation of where they stand is now clear.
      The anti- Muskrateers are now Muskrateers.
      Lets admit it......send a delegation to seek terms to join Quebec as one big province, is a practical solution. Prudent, as Liberty would say. Put a good road through Quebec and down (up) the Labrador coast. Also get hydro power to the Labrador coastal communities, get them off of diesel for the sake of climate mitigation. Give Nfld 7 cent domestic rates.Of course HQ must take control of our hydro resources....they have the know how and the means , and the route. Easily 70 percent of Nflders will vote for that. And together we will be a counter to the the Maritime provinces and Ontario. There is my platform....but anyone can borrow it. And language? My grand kids study french in school. I studied Latin in the 1960s! A shame I do not know the French language. The combined province.....call it NewQuebec. Newfoundland officially dead in name, but part of a better arrangement. And we keep our culture, as will Quebec.
      Winston Adams

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    10. Sorry Bernard, but I don't get excited about crowding on TL lines, perhaps I should. Better for the customer???

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    11. I vote for you Winston, a Quebec & Nfld province would be great!

      Now, do we really want anonymous to be part of it? He seems to be a trouble maker... ;-)

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    12. I vote for you Winston, a Quebec & Nfld province would be great!

      Now, do we really want anonymous to be part of it? He seems to be a trouble maker... ;-)

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    13. Ex- Military Engn, one vote is not too bad. All good ideas start small. I said 70 percent of Nflders would go for this.....I expected an torrent of anti- Quebec comments actually, as such people can get riled up easily. Whether such comments were posted and deleted I do not know. If not, it suggests that the idea may get more support than imagined. Many Nflders are fed up with incompetence here. And they can never put our fishery on a firm footing. 400 working at offices at the White Hills where the hunger striker makes his protest. 400 doing what.......paid the highest kind of wages, while our fishery continues in turmoil. Our one success FPI was sold off. Our rural communities, where the fishery is the lifeblood, is on a downward spiral......and Nalcor and oil revenue is as far as the government can see.
      Quebec, let us join your province, but with dignity and respect and fairness to all. Then the 1927 boundary be dammed.
      Winston Adams

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    14. A far more practical way forward is, in my opinion, to fix the South Border dispute, to restore to Quebec the head waters of the five(5) rivers which flow to the Gulf. In exchange, restore to NL the full control of Churchill watershed. Certainly, we have all learned the problem created by the 1927 Privy counsel decision.

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    15. Always respect your opinion Robert. Interesting that you, I , and Ex-Military are all engineers. Muskrat is an engineering disaster so far, so maybe the wrong engineers led by the wrong politicians. Not too many engineers wander into political discussions.......but when 12 billion is wasted on an engineered project.......it is not good for the profession. Some Nflder writes from England in the Telegram saying that 1 billion could have provided Nfld with our own F-35 fighter aircraft, useful to patrol our border with Quebec, fly tourists to the Fogo Island Inn, one for Danny Williams at Galway, one for the Premier......leaving 11 billion for non essentials like roads , hospitals etc. The smell of this project has reached London England it seems.
      So this Jason Muise is an engineer.....now on the Oversight Committee.........is Feehan deferring to him as to the North Spur problem. His bio shows he is with an international company of some 80,000 employees, doing offshore oil work, Muise overseeing Nfld operations of several hundred workers. Yet, they went to the Nfld govn for half a million grant for a computer system to aid their design work. R and D is ok, and may be worthwhile and beneficial, but not sure whether this is the type of independent oversight MF needs. He appears all for substantial offshore investments, so not so much for conservation or climate change mitigation. Me thinks his job is to prop up Ball`s view that offshore royalities can be sufficent to cover the investment and debt of the boondoggle MF. Another on the Committee has experience on the oil revenue benefits for the province. So, in summary, our Legacy Fund, Danny`s Dream was to use oil wealth, and the captive ratepayer, to pay for MF, and MF to short circuit Quebec....and that is what they are trying to keep on track.....a train that had no wheels from day one.
      Winston

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    16. Sounds to me that NL, like rest of Canada, is subsidizing off-shore petroleum industry, to provide cheap hydrocarbons for the benefit of Trump, in return for a few tech and roughneck jobs. Eventually, non renewable carbon is gone, oil revenues are gone, how will you explain this to your grandchildren? Does not make sense, This should be a NAFTA re-negotiation issue.

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  8. I may have said earlier, NALCOR are applying "Professional Reliance", (Self Regulation) principles. They seem to be above the Law.

    http://www.cbc.ca/news/canada/newfoundland-labrador/nalcor-controlled-burns-muskrat-falls-1.4077195

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    1. Above the law understates it Robert. This is Nalcor giving their Labrador hosts in HVGB the middle finger. So much for corporate social responsibility.

      Nalcor remains consistent. At the JRP they told HVGB to take a hike when asked for an emergency evacuation plan and the resources to fund it. The colonial arrogance is staggering.

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    2. "Colonial arrogance" indeed. Co-sponsored by our Federal Government. Why are the MPs, Liberals all, not being held to account? Where is that pretty Environment minister? promoting pipelines in the West through Indigenous lands to tanker routes in highly sensitive environments. Maybe our BC election will bring public protest to a boil. Shame.

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    3. "She aint pretty, she just looks that way". Same goes for her boss. Jane Fonda aka "Hanoi Jane" ironically said don't trust good looking liberals. That still makes me chuckle given her activist past.

      McKenna and Trudeau talk the talk but can't walk the walk. After green rhetoric they announce 2 new pipelines, ignore the first nations concerns after mouthing the "nation to nation" bullshit. Trudeau has done something Harper never accomplished, a standing ovation from oil execs in Huston.

      If we have a future these two will be seen for the ugly hypocrites they are.

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    4. You ain't pretty either Bruno. Isn't that why they won't take your calls on VOCM open line any more? You don't look good on radio, I guess.

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    5. Mostly for the same reason Pete is gone. Speaking truth to power is always full of landmines Anon. And no I have never been accused of being pretty.

      You need not worry however, you are safe. You don't have the courage to have a name.

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    6. Right on Bruno you keep on truckin', we don't have the courage bye!!

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  9. With Spring breakup on the lower Churchill, are there any drone photos and related news on how the suspect coffer dam is holding up? Any words to the wise from Stan as to the incurred cost contingency to mitigate repairs, etc.? Who is keeping watch? Burning site waste without regard to environmental bylaws is one thing, are the quick clays remaining stable?

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  10. Robert, there has been discussions between the beaver, the muskrat and field mice all winter........they are not impressed with the construction there, especially the coffer dam, .........they are planning a protest and sending a notice to Tripper , the environment minister, they feel their way of living is at risk, they may get wiped out......they expect a slide to occur ......apparently they sense the increase in ground vibration already. As mere critters. they get no respect.......... their observations, from ground level, suggests to them that the guys in the white hats, marked Nalcor is at fault,...... and on top of the digging and blasting, they now try to smoke out the wee 4 legged creatures, with burning garbage all over the place.
    What are they to do? If they officially protest they will be served with an injunction. Perhaps that is the best option, as it might bring in the SPCA, and CBC Here and Now will be all over it. Aborininal and native Labradorians get little attention from the colonial government in St john's, but concern for critters is on the rise, and counters our sealing culture image......CBC hasgot wind of this already and will be sending in the camera crew.
    PF

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    1. Nice comical spin on a serious subject. Even our power grid had an outage this AM. I'm smiling at the fates.

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  11. Sterling Peyton was as big a Muskrat booster as you could ever hope for.

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  12. Des, I heard Jim Feehan on CBC here and now news tonight and he does not want to look back. It appears to be straight ahead for him . Damn the torpedos, full speed ahead! It is amazing how a few dollars can change the resolve of the nay sayers so easily. I'd rather have snowballs than no balls at all, wouldn't you!!!

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    1. Why am I not surprised? I guess that means no need to look at the spur engineering?

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    2. Spur on and for those of us who know, who cares.

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  13. Where does this dumb and wrong idea of a 199-year water lease come from?

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  14. For those who care, I don't read more than 10 lines maximum, I skips over the rest of the BS. I was raised in the back woods you know.

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  15. That the economic growth model the economists who supported the Muskrat has taken a beating, is now shown to be false. Expecting that our prime market, (US), will provide $1Billion/year to recover the capital cost is very much in doubt. Listen to what a major financial trend analyst says about current and future prospects. Ignore the commercial aspects.

    http://kingworldnews.com/gerald-celente-4-22-17/

    Is the oversight committee living in Lala land?

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  16. Where is that Danny Dumaresque guy now?

    I work at Muskrat. The job is great, pay is great. I hope it lasts another five years.
    Hell, I hope I get in on the refurb work when its done in 30 years time too!! Whatever money pays for it, Quebec, Chinese, Goldman Sachs. Looks the same in my account.

    Did your companies miss out on the subcontracts?

    Farts in the wind

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    1. Anon this is classic! You are feeding your children your grandchildren. It matters not to the short sighted and selfish like you.

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    2. Anonymous,It's people with your mindset who got us in the mess we're in in the first place. It's all about you, damn everyone else.

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  17. Guess Des's hope is dashed. Seems the the new Oversight Committee are but wallflowers. Nothing in all these comments or the TV interview with Feehan to suggest otherwise. Why were none of the others interviewed?

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    1. When will we know if this committee has any effect? Is there oversight of the the OC?

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  18. My dictionary defines oversight as "a failure to notice something". It seems that there has been lots of oversight on this project from the very beginning and will probably plague construction until its completion, whenever that happens. But let's keep them on because they are good people, right!

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    1. Your dictionary probably defined "lack of oversight" ;-) (which could then be defined as "a failure to notice something")

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    2. Sorry but it is one word, oversight, and other dictionaries I checked also agree with " a failure to notice or overlook something". I have a thesaurus that offers the following synonyms for oversight: failure, overlooking, mistake, and error. My point is that there has been no lack of failure, mistakes and errors covering all aspects of this project and we don't need more oversight. As others have said already, what we need badly is several review boards to improve both the management and the technical aspects of this project to avoid further mistakes, errors and especially failures and in particular dam failures.

























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  19. This comment has been removed by the author.

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    1. Indeed, I see the Cambridge Dictionary has the definition you provided.

      But it also has a second meaning.

      In project management and in program management (my world in the Federal Gvt), we use the Webster definition, which is the "responsibility for a job or activity and for making sure it is being done correctly". (It's part of the accomptability framework in project + program management)

      ==> Anyways, I agree with your message pertaining this MF boondoggle.

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