Earlier,
this year, the Government ignored the views of Dr. Stephen Bruneau, a highly
respected academic at Memorial University, who in a public Presentation, gave great
merit to the concept.
The Ziff
Study dismisses natural gas as a viable option.
It suggests that the capital cost of developing the infrastructure for
such a small customer (Newfoundland) is too high, and that the oil companies
are not interested in a venture which does not offer a sufficient return on
their investment. Husky Energy quickly
confirmed Ziff’s conclusion. Cabot Martin dismissed the Ziff Study. Ziff are economists, he stated; they do not
possess the engineering expertise to assess the gas option.
This
article is not about the merits of natural gas. You can judge the validity of Martin’s
comments yourself.
However, Cabot
inspires two critical questions which individuals, interested in NL public policy,
should ponder. First, what should political leaders do when they have encountered a seismic shift in the foundations which gave rise to a major public policy initiative, making an expensive and risky concept, Muskrat Falls, less economically viable than first thought?
Secondly, what if these policy makers ignore the evidence that such a cataclysm has occurred?
Investment gurus and politicians, from T. Boone Pickens to the Premier of New Brunswick, have noted the paradigm shift caused by the shale gas era. The U.S. is not dithering over its potential. The economic implications are staggering for industry, government and especially for individual consumers. Why? Because ‘fracking’ technologies make the resource vastly prolific and mineable; many believe ‘shale gas’ presages an era of significantly lower oil prices.
Why should
we worry about that? Because, lower oil prices will not only destroy the single
underpinning of the Government’s argument for Muskrat Falls’ viability, it will
severely constrain the most important revenue source on which the Provincial
Budget relies.
Martin
states: “One of the greatest challenges to any society is how successfully it adapts
when faced with fundamental change….very large mistakes can be made to the
detriment of future generations”.
Adds
Martin, and this is a key point in his Presentation: “And yet, in the face of this maelstrom of change, Nalcor and the
Dunderdale Government cling stubbornly to Muskrat Falls – the proud keystone
project in an Energy plan drafted in 2006 and made public in 2007.
Problem is, in today’s energy work, 2007 is
prehistoric”.
Martin’s
comments, echoed by others, should stagger the Premier’s blind confidence in
the Muskrat Falls Project, but they do not.
Let’s move
on to the second point.
During
Martin’s time as a Senior Policy Advisor to Premier Brian Peckford, he was the
guy in the room who always looked out for what others could not see; in
particular, he took notice of anyone who was inclined to the view that we are powerless
to influence big decisions, whether by big companies or a big Federal
Government. Martin never shared those
views; he was never intimidated by “big’.
Now, more
than twenty years later, Martin is again challenging the belief, clasped onto,
evidently, by the current crop of senior bureaucrats and an insecure political leadership this time, that it is too late
to change course on an already outdated energy strategy. Disconcerting too, is that Dunderdale and her Natural Resources Minister sent out to the Media Husky to complete any re-assurance Ziff could not give.
Dunderdale is
no Brian Peckford confronting Trudeau and Chretien in the 1980s. Imagine, as Peckford did, this Premier facing
down the heads of a group of international oil companies and telling them, if
they drill federally issued licenses, the Province is not bound to recognize
their claims! No! No one could possibly imagine
Dunderdale doing that.
But, it is Newfoundland
and Labrador’s loss.
A capable Premier
would call in the head of Husky Energy, not to ask him IF he might, but to instruct
him HOW his company could assist this Province develop a new gas strategy as an
integral part of developing the White Rose field; that his company is going to join
the Province and a group of capable international consultants, in a combined
effort to satisfy, more cheaply, the electrical needs of NL, using OUR GAS
RESOURCES! You can be certain, “Yes, Premier”
would be quickly audible from Husky’s man.
That’s the exercise of power! That’s political leadership.
And, if
Dunderdale possessed that confidence, that skill, Husky would respect the
Premier for her bold initiative.
Likely,
Martin was thinking those thoughts at his Press Briefing. Likely, he hoped that the media understood,
not just the things he said, but what he implied and what, in a less public
forum, he would say, even more frankly.
In allowing
Husky Energy to bolster the Government’s position on Muskrat Falls, Dunderdale
has weakened an already weak Premier’s Office. She has raised a white flag in the pursuit of our
fundamental resource interests. Brian Peckford, Bill Marshall (the highly
competent former Energy Minister under Peckford and now retired Supreme Court
of Appeals Judge) and others must be livid!
Dunderdale’s
inability to recognize that good public policy must be allowed to emerge amidst
change, is bad enough. Worse is that, under
her leadership, we have become, as big oil always wanted us to be: partisan, pliable and parochial.
It will
take some time to re-assert our place, as stewards of our own resources, we
once earned. But, it won’t begin until this Premier is gone.