"EXTREMELY FRUSTRATED" PREMIER GOES TO SNC-LAVALIN FOR ADVICE

The following statement is not correct:

“Running at full output, Churchill Falls (CF), would discharge about 2000 cubic metres per second into the Churchill River. Assuming no reservoir draw down, this level of discharge from CF would by itself provide about 630 MW of production at Muskrat Falls. We could run MF at a higher output level for a period of time and draw down the MF reservoir… we could keep it at Muskrat Falls as well as anywhere else.”

That was Gil Bennett talking a couple of years ago to law student and political Blogger, John Samms, who is now on staff in the Premier’s Office. Note the word “drawdown” to which I will return.

At the time Bennett was telling Samms how Nalcor intended to access surplus power from the Upper Churchill; the amount that exceeded what Bennett erroneously thought was the full contractual power commitment to Hydro Quebec. That assumption didn’t work out too well for Nalcor, the Quebec Superior Court having ruled that Hydro Quebec is entitled to all the power that the Upper Churchill can generate. The Water Management Agreement, intended to coordinate the flow of water, was stillborn too.

The style of governance which allows a crown corporation to proceed with a multi-billion project without first obtaining certainty over previously-known disputed rights is just testimony to why the province is essentially insolvent. Ultimately, the Muskrat Falls Inquiry is about making Nalcor accountable.

Of course, this story is old hat; but it wasn’t the only one offered up by the Muskrat Falls Oversight Committee in response to a recent ATIPPA inquiry — the same one that revealed the allegation that former Nalcor CEO Ed Martin maintained a secret risk reserve for the Muskrat Falls project which, ostensibly, was not included in the official estimates or disclosed to the public (including the PUB).

Contained within the same tome was a letter from a worried Premier Ball to SNC-Lavalin about the advisability of “drawdown” of the Muskrat reservoir. Remembering Gilbert’s declaration to Samms, I could see that Bennett was, again, sharing his expertise at the highest levels. Hadn’t Premier Dunderdale received enough of that?

Nalcor Executive V-P Gilbert Bennett

I admit “drawdown” seems a pretty innocuous word, though it does have some mighty implications. It became important to Ball, too, but for quite different reasons. He was in the midst of delicate negotiations with aboriginal groups, having given native leaders an undertaking — following hunger strikes by three people and demonstrations in 2017 — that the reservoir would be reduced to natural levels until issues relating to methylmercury issues had been ironed out.

Bennett’s “unequivocal” advice — that's the Premier’s word — appeared suddenly as the Premier’s letter revealed its importance. My first reaction was to run for the matches until I realized I was in possession of material legally obtained and that all the heart palpations were for naught.

Admittedly, it did seem strange that the letter was issued under Ball’s pen. One might have expected that the CEO of Nalcor, Stan Marshall, would the one trying to straighten out the confusion coming out of the Office of his Executive VP.

The Premier had evidently been made aware by other Nalcor officials of SNC-Lavalin correspondence which warned against drawdown of the reservoir and the risks inherent in the practice. The Premier’s missive to SNC read:

The letter continues: 

We’ll get to the letter in a moment. But, first, Bennett’s dialogue is notable in part for its inconsistency with the evidence Nalcor filed with both the PUB and the Joint Federal/Provincial Environmental Panel. Bennett’s assertion that, if the power was needed, “We could run MF at a higher output level for a period of time and draw down the MF reservoir…” is simply not correct.

In contrast Bennett told the PUB, in 2009, that in the absence of a Water Management Agreement it would have to “chase the flows” from the Upper Churchill.

The Muskrat Falls reservoir is relatively tiny which is why it is often referred to as a “run of river” facility. It has reserves of water for no more than a day or two, unlike the Upper Churchill which has vast reserves. In addition, Nalcor told the PUB that the Muskrat Falls reservoir will be maintained at 39.0 meters to optimize the energy output from the falls.

The issue of “drawdown” of the Muskrat Falls reservoir is important for other reasons, though its relationship with optimizing power production cannot be understated. Dr. Jeffrey Brooks of the Geological Survey of Canada, for example, recommended to the Joint Federal/Provincial Environmental Panel that “Nalcor establish a procedure for drawing down the Muskrat Falls reservoir to minimize the chance of triggering a large-scale earth flow.”

Dr. Brooks was referring to geotechnical issues associated with the project, particularly the problem of “quick clay”-induced bank instability and risks associated with seismicity along the Churchill River. He was concerned that “if they [Nalcor] draw the water down rapidly, there could be high pour water pressures that trigger some of these [bank] failures.”

In its final Report, the Joint Panel stated: “In order to operate the reservoirs as efficiently as possible, Nalcor would keep the water levels at a fixed level for most of the year, avoiding the big changes that people have been used to seeing in the Smallwood Reservoir.”

As one might expect, the reply to a concerned Premier from SNC-Lavalin was important and, likely for that reason, it was prompt. Their intention was not to affirm the advice that Gil Bennett had given him, but to correct it. Among the reasons SNC noted as factors that increase the risk of landslides:

Then SNC gets to the most essential point:

SNC took some care to address why a quick drawdown is imprudent given adverse soil conditions along the Churchill River. It stated that the circumstances might occur during construction or due to an unforeseen event noting that “a natural risk of land slide exists along the river banks [and] the probability of such landslides however small it may be should be minimized.” SNC continues that “should it be found necessary to lower the water level, it should be done gradually at a rate determined by geotechnical specialists unless we are facing imminent risk…”

In the case of a rapid lowering, “an exceptional event… not expected to happen in normal circumstances…” says SNC.  
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Copy of Premier Ball's Letter to SNC-Lavalin July-2017 re: bank stability MF project

Copy SNC-Lavalin Reply to Premier Ball August- 2017 re: bank stability MF project
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But the SNC letter puts paid to the concept of employing the use of “drawdown” to substitute for the absence of a Water Management Agreement too. Drawdown when the riverbank is “fully saturated” is a risky proposition that may cause landslides. Rather, say SNC, “we recommend to minimize the drawdown of the head pond and maintain water elevation… in order to minimize the potential risk of instability along the riverbanks.”

More extensively, SNC counsels the Premier: 

When the Premier is given bad advice by senior officials on fundamental issues, the public is apt to wonder how frequent such events are occasioned. Worse, when projects as large as Muskrat Falls are advanced on completely fallacious assumptions and are neither corrected nor caught by people paid to know, you have to ask: who is being served?