MUSKRAT FALLS: A BETTER OPTION EXAMINED (Part 4)

The strain was showing on Uncle Gnarley’s face as he fought to complete his oration on that “dreaded” Muskrat Falls project.  His declaration that the Province should kill the power generation plant at Muskrat completely and build only the transmission line now, was deemed by him, a ‘modest’ proposal. 

Though he had reservations, Gnarley made certain that I understood, even his ‘modest’ proposal contained a significant qualifier: Nalcor must purchase access to 250-350 MWs from Hydro Quebec.  Together with the balance of ‘recall’ power from the Upper Churchill, of about 80MWs, the cost of which is small, might, he suggested, “and I emphasize, might, justify such an expensive transmission link to the island”.

The proposal had its face saving elements which Gnarley knew would have to be offered.  Some politicians would ‘go down with the ship’, he suggested, rather than acknowledge they had made a grievous error in judgement. 

Though he was a skilled Economist and retired University Professor, Uncle Gnarley had spent many a summer plying the waters off Petty Harbour, as a fisherman.  For him, turbulence, breaking waves and an unforgiving coastline were acceptable risks, though measureable when prudently assessed.  Those who conjured up Muskrat Falls were landlubbers, he suggested, for whom even the crises in Greece barely served as a metaphor for peril. For Uncle Gnarley, Muskrat Falls, wore all the hallmarks of impending disaster.

 “Just a drop”, Nav, as I offered to re-fill his glass.  I wish to be clear about my conclusions.

MUSKRAT FALLS: A MODEST PROPOSAL (Part 3)

Editor’s Note:  Part 3 of Uncle Gnarley’s review of the Muskrat Falls project became more expansive than first expected, as he explains why it is a bad idea right now, and what alternatives the Provincial Government ought to be considering.  Gnarley was not prepared to compromise completeness for brevity; hence, part 4 will be posted Monday, next).

Uncle Gnarley seated himself comfortably in his ‘own’ chair and gave me a look of expectation when his favourite ‘lubricant of the soul’ was not in evidence.  Sensitive to his most egregious habits, I proposed that we try a recent purchase, a 12 year old Balvenie, a personal favourite, aged in portwood and full bodied; the spirits boasted a taste and character that was delicious and smooth.  Producing the evidence, I received no comment on what a friend had thought was a “shrewd” purchase, though the look of surprise and satisfaction, which characterized his discerning smirk, afforded me confidence, that, this evening at least, I would not be reminded of my shortcomings on the water.

Uncle Gnarley was now ready to get on with his review of the Muskrat Falls project. 

“Indulge an old man for another few minutes, Nav, and I will head back down to the Shore, Gnarley began, simply. 

“Last time, I put paid to the Nova Scotia link.  For the reasons I explained, there is little or no power to export, so why give away 20% of the project for free. Though, the point is rather academic, he added.

“More importantly, replacing Holyrood at all, with Muskrat Falls, and at a cost that may well climb to $10 billion or more, is just such an incredibly terrible idea”.

“What about Alderon? I interjected.  The company says it needs power. “Yes, Alderon”! He scratched his head, shaking it a little: “they really should consult IOCC to see how they got their power”, replied Gnarly, dismissively.

“40% of Muskrat, 330 Megawatts (MWs), is thought necessary, by Nalcor, to replace Holyrood; the cost of the whole project will be repaid by levying the Newfoundland taxpayer a rate increase every year for 50 years. 

“That is the basis of the ‘take or pay’ contract they have designed for us, he declared, regardless of whether the power is needed, regardless of changes in technology over that period; regardless if oil prices fall; and, regardless if natural gas overtakes other forms of energy, as we are now seeing in the U.S. with shale gas. 

Muskrat Falls: NO POWER TO EXPORT (Part 1)

The distinctively loud and rapid sound of the gargoyle, which serves as a knocker on my front entrance, confirmed that a visit from Uncle Gnarley was imminent. I opened the door quickly and the grey bearded eminence himself entered in a flourish.  A day old newspaper covered his favourite ‘river warrior’, but could not hide its delicious aroma.  Uncle Gnarley had caught a salmon. 

Gnarley did have a sense of timing. He had been absent for several weeks and I had begun to miss the irascible old man.  Luckily, the day held no impediments and a dangerous shortage of our favourite elixir had just been remedied.

“Nav”, Uncle Gnarley barked, as he pushed the parcel towards me, “I thought I might invite myself to dinner.  I suggest you put a lid on this one, he was a real fighter”.

As Gnarley headed for the only chair that fit his broad frame, he allowed that we had some business to discuss and quickly held out a whiskey glass for an ample serving of 15 year old Macallan’s; a perfectly suitable reward for his victory on the Gander River.

“I have had a lot of time to think”, Gnarley bellowed, now anxious to share what was clearly bothering him. “I have never felt more unsettled”, he continued”. 

MUSKRAT FALLS: ‘POLICY OF PROGRESS REVISITED (PART 2)

(Uncle Gnarley had many views to share, regarding the Muskrat Falls Project, upon his return from the Gander River.  His comments were written as he expressed them, but the material suggests  his ideas should be shared in three Posts, beginning with part 2, to be followed later by parts 1 and 3.)

Having wolfed down the better part of his prize from the Gander River, Uncle Gnarley was ready for an evening stroll to aid digestion and to inspect all the little changes, in the neighbourhood, that were apparent to someone with his keen eye.


He loved improvements that showed pride of place.  There was much to see as we strolled down the old Newfoundland Railway bed, whose current purpose, as a T’Railway, seemed more suited to the charm of the Waterford Valley than any of the dreams of Sir William Whiteway, Newfoundland’s longest serving Prime Minister, before Confederation and the railway’s chief promoter.



“A Policy of Progress”, voiced Gnarley, in a tone that sounded almost derisive.  “That was a key Whiteway slogan and a trans-island railway was the centrepiece of his policy.  It had worked for many countries, including Canada.  But unlike central and western Canada, Newfoundland’s pattern of settlement was established around hundreds of coves and bays, built around an inshore cod fishery. 

ALDERON, DANNY AND BAD MANNERS

Small societies suffer from a distinct disadvantage: smallness. Smallness permeates our politics, our economy and all the institutions that constitute our societal underpinnings.
Smallness is not just about the absence of scale, it is about history and geography. Sometimes, it’s about diminutive politicians and business leaders, too.  The diminutive effect is compounded by a short history of democracy, compared, for example, with other small societies such as Iceland, where political maturity has overcome their small scale.

From a different perspective, smallness affords familiarity, the quaintness of distinguishing one resident from another, as tall Jim and short Jim.  It also imposes a certain discipline; to be careful about criticism and the giving of offense; perhaps, it is what prevents us from publicly telling the Chairman of Alderon Iron Ore Corp. to mind his own business.  
In small societies, a few people, often just one or two, can influence, not just the politics, but public policies, too.  Indeed, some often achieve a sway over their government that is disproportionate to their wisdom and ability.   Could one of those have been Danny Williams?

ALL EYES ON THE BACKBENCH, PLEASE.

The Muskrat Falls project, in all its complexity and potential for negative outcomes, is akin to a bomb with multiple warheads for politicians.  Political fallout could occur from several directions, perhaps even at once.  Weaknesses in decision making will be exposed as cost projections continue to increase, the price of oil remains weak, and low natural gas prices and power conversions to that form, continue to dominate the energy news in other jurisdictions. Look for a number of Cabinet Ministers and backbenchers alike, to become uncomfortable. 
By the time Muskrat Falls is sanctioned, it will be interesting to see whether any of the current Ministers have the courage exhibited, in another time, by John Crosbie, Clyde Wells, Alex Hickman and Val Earle, who sought the Opposition benches (Wells became an independent MHA) when the Smallwood government engaged in reckless behaviour with the finances of the Province.

Will any of them follow the example of Tom Rideout or Jim Hodder, who left the Liberal Party in the mid-1980s, because of the Party’s failure to back the Peckford Tories over natural resource issues and revenue sharing with the Feds?

Now, it’s the Tories who are in government and who are playing fast and loose with public policy and the public treasury. 

But even before you take notice of how guarded certain Ministers will become, you would do well to watch the Members sitting in the government’s back benches. 

A SERIOUS DEMOCRATIC DEFICIT IS EXPOSED

(The following Essay, is a companion piece to the last Post.  It was penned by Uncle Gnarley’s scribe and first appeared in The Telegram, Monday, June 11, 2012.  It is re-produced here for continuity purposes and for the benefit of Uncle Gnarley readers.)
The unfolding of the Muskrat Falls issue, as it has, demands that we pause for a moment.  The government and its proxy, Nalcor, has managed how we view the project by parcelling out selected information, steadfastly refusing the release of critical data, subverting the public review process and pummelling legitimate critics. 
As members of a democratic society, we need to consider how such behaviours have impacted our rightful participation in this major public policy initiative.  Equally, we need to consider what we have willfully acceded to the state given that many people have denied their responsibility to assess the project and its risk to themselves and to our economy; we also need to consider how we have enabled this process.

From the very beginning, government was careful about the information it released, ensuring that it was minimal.  When it was forced to send the issue for review, after opposition protest, it framed a very narrow reference question, and gave the PUB little time to conduct its enquiry. 

HOW SHOULD THE GOVERNMENT INFORM ITS CITIZENS ON MUSKRAT FALLS?

The Government of Newfoundland and Labrador has failed in its obligation to provide transparency on the Muskrat Falls issue; as a result, it has allowed a serious democratic deficit to occur.  Government has an obligation, as part of the democratic contract, to explain the complexities of Muskrat Falls; citizens should be engaged in the issue in order to assess the risks of the project themselves; they should not defer to the so-called experts.  It is the people, ultimately, who must take responsibility for critical matters of state. 

These are issues to be explored in another posting.  Let’s set the stage for that discussion by first dealing with this most basic question:  how should the government inform its citizens about the Muskrat Falls project? 

THE LIMITS OF PARTISANSHIP

The following Essay penned by Uncle Gnarley’s writer, appeared in The Telegram, Saturday, June 2, 2012 edition, and is re-produced here with minor edits.)          

Once the tyranny of the Smallwood years had been lifted, after the 1972 general election, it did not take long for new government systems to be introduced. 

Modern management practices including a more formalized public information system, a system for hiring public employees based upon merit, a public tendering system, as well as others were introduced.  A restructuring of the legislative and executive branches of the public service occurred; capable people became involved in the governance of the Province.  While the system was far from perfect and backsliding was sometimes manifest, major advances in the overall system of governing for a democratic society were evident.  Somehow, that process was halted with Muskrat Falls.

The Muskrat Falls project was a big head butt! Not at first. Not until the questions started to emerge. Maybe it wasn’t even then; perhaps, it was when Minister Kennedy was heard voicing outlandish and accusatory statements in an attempt to discredit certain individuals.  Many people then took the time to review the information on Muskrat Falls.  Personally, I came to the conclusion that it was not only ill thought out, it was reckless. Still, that is another matter.

HOW NOT TO LOSE YOUR MARBLES!

(Uncle Gnarley is hosting the Class of 2012; his umpteenth time performing high level instruction to the politically naïve.  Let’s listen in…as he addresses the group.) Here's Uncle Gnarley:

People, often to their detriment, enjoy a belief in the fundamental fairness of political institutions.    Human progress is frequently inhibited because, all too often, we give way to, what I call, “the tyranny of naïve realism”.  

The art of the process is not as much science as it is attitude.  Perhaps it is our relative isolation, maybe it is in the generous nature of island people, as most of us are; whatever its source, we have a tendency to see things as ‘we want them to be’ rather than ‘as they are’.  It is a common weakness, especially in politics. It has to stop!

But don’t worry. Uncle Gnarley will have you wearing the grim aspect of a Presbyterian in no time. 

Now, Johnny, down in the far corner; you look so wise, yes, you, the one with the Walmart ‘Prices are Falling’ sticker on your jacket.   Answer me this question, what does the phrase “envelope approach to federalism” mean?  No, Johnny, I didn’t ask you to let your eye balls fall out; it’s not time for ‘show and tell’.  What do you mean, ask, Mary.  I’m asking you!  You have never heard of it? Then sit down and let Mary speak.