The Muskrat Falls Hydro
Electric project has much strength and possibly even more weaknesses. The major
strengths of the project come from its ability to provide electricity
independently to Newfoundland and Labrador into the future. This is important
because the ability of the NL economy to grow is dependent upon its ability to
provide electricity to NL. There are concerns of consumer protection, and
rising electricity costs, but this is probably inevitable regardless of whether
this project goes ahead. However, when we look at the big picture without
looking at the numbers, not slowing economy growth should trump raising
electricity bills because the tax revenue generated from the investment in
heavily electricity consuming industry such as mining should outweigh the cost
of the to the consumers through higher electricity bills. This is true because
the same consumers which will pay more on their electricity will also be
receiving benefits through the additional tax revenue (from companies which
require this electricity) they will receive these benefits through government
expenditure (health care, road work, pensions, and many other social services)
of the tax money derived from companies who need this energy. Next, there is
potential to sell energy to Nova Scotia through the submersed lines to Cape
Breton, and Nova Scotia’s Emera has the potential to sell it to New England and
other provinces. There is also strength in the jobs created directly and
indirectly through spin off companies such as mining companies in Labrador. For
example, I have read of at least two rare earth companies waiting to start
production in Labrador but cannot get power they need. We should consider not
only the direct jobs and project but
the indirect jobs that depend upon this energy. So, 3000 jobs for the project
is not as relevant, but the projects from growth in the economy could be. There
is strength in not having to buy power from Hydro Quebec because they have
proven to have little ethic or decency in doing business in the past, so having
an alternative supplier independent of Quebec Hydro is a strength to this
power.
The weaknesses of this project are numerous as
well. First, Quebec is building a competing generation station according to the
financial post “Hydro-Québec
is constructing a comparable hydroelectric complex on the Romaine River, 350
kilometres closer to southern markets.” And this project is supposed to
be cost less then the Muskrat falls. Next, there are legal concerns with the
Muskrat falls project because of its location downriver from Upper Churchill
Falls in which Hydro Quebec has a 34.2 % equity position. Because the water for
Muskrat falls is dependent upon cooperation from the existing Churchill Falls
generating station. Next, Nalcor PC government under
Dunderdale have gone to great lengths to expedite the Muskrat Falls project by
changing public access to information laws, and by refusing to allow an
extended review from Newfoundland’s Public Utilities board which is suppose to
protect consumers. There is also weakness in the fact that Muskrat falls line
to Cape Breton and its export markets is not certain because it is conditional
on approval from Nova Soctia’s Public utilitys board. In addition, there are no
known/public contracted buyers for electricity in Labrador for electricity, and
some analysts believe that there won’t be many buyers with the costs the
project because Muskrat will have to charge too high of a rate. Also, as of
now, Nalcor seems to be proceeding without a water contract with Upper Chuchill.
Newfoundland and Labrador residences should
have concerns with this project. They should ask:
1. Is there sufficient demand for the supply that Muskrat falls will
create?
2. Is NL’s economic growth dependent upon obtaining additional
electricity sources?
3. Looking beyond just the project, will this project produce more
revenue to NL economy and government than it will cost?
4. Why is the Dunderdales current PC Government deny access to
information to the residences? Is this purely strategic and business move in
the best interest of Newfoundlanders and Labradoreans? Or , is this a violation
of our democracy and the government has gone to far?
5. Are the benefits from the tax revenue the province and its
residence receiving from the projects and future business venture dependent
upon the electricity worth the increase in NL’s electricity bills?
6. What are our alternatives? Keeping in mind the 500 million already
invested.
I I believe that Newfoundlanders
and Labradoreans should be asking these questions, but they need to keep the
big picture in mind and realize that our economy is dependent upon supplying it
with electricity to operate. We need to be reasonable and ask ourselves why we
are doing this project? Does it make economic sense? Or, are we just trying to
spite Hydro Quebec? And, if it doesn’t make economic sense we should support
pulling the plug before we have invested to deeply. Also, we should look forward
to the Gull Island Generating station, and if this is a bad business decision
we can still stop this from going forward because it is going to generated over
twice as much energy. Lastly, we
should realize that there has to be a balance between our ability to do
business and our democratic right to information, and consumer protection. We
should ask ourselves: does Newfoundland and Labrador have too much public
information and consumer protection which is slowing our business or is the
government seriously violating our democratic right and not protecting NL
residences.
Some
additional resources:
Gull Island :
(We should seriously consider the viability of
this project)
Nicholas,
ReplyDeleteThank you for this extensive and in-depth review!