'A true Canadian tragedy'

“In oil equivalents, there are 55 million barrels a year in production at Churchill Falls which are being sold to Hydro Quebec at a price of $1.80 per barrel for the past 22 years and will continue to do so at prices as low as $1.20 per barrel over the next 43 years. This is a true Canadian tragedy.”
— Vic Young, who served as chair and CEO of Newfoundland Hydro and Churchill Falls Labrador Corporation (1978-84), corresponded in 1996/97 with then-prime minister Jean Chretien, calling for a tripartite resolution (involving the feds, Quebec and NL) to the “unconscionable” Churchill River situation. The above quote is taken from that correspondence.

Oh, and a barrel of oil today goes for almost $85.
•••
Make no mistake, there’s big money in hydro.

And the mountains of cash will only get bigger.

Take this morning’s Globe and Mail as yet another sign of just that.

A business headline blares: Ottawa tells energy firms to start powering down coal-fired plants.

Ottawa has told Canadian power producers that it wants to gradually close coal-fired power plants over the next 10 to 15 years.

According to the Globe article, the feds believe most of Canada’s 21 coal-burning power plants would reach the end of their commercial life between 2015 and 2025 (the U.S. has 650 coal-burning plants).

Canadian coal-fired plants will be replaced with cleaner sources of power — including natural gas, wind, solar, nuclear, and hydroelectricity.

Which is where the lower Churchill would come in.

The time is now to develop the project's 3,100 megawatts.

But then the time has been now for 40 years at least.

A second story appeared in Friday’s Globe, headlined: The Nova Scotia government is raising the bar on its renewable energy targets.

N.S. will strive to get 40 per cent of its electricity from renewable sources by 2020 — the most aggressive target in Canada.

Sounds like yet another reason for the lower Churchill to get off the ground.

Both Globe stories reflect the fact that renewable power (namely, the lower Churchill) is where it’s at.

Which brings me back to the “true Canadian tragedy.”

Why is the lower Churchill still not developed?

Vic Young gave two reasons.

First:
Labrador power can’t flow through Quebec to receptive markets in a manner similar to the unimpeded flow of oil and gas between provinces.

Canada’s flawed national energy policy treats energy resources from oil and gas in one manner and electricity in quite another.

Which is scandalous.

Here's how Vic put it:

“Who could imagine a situation where Alberta was forced to sell its oil to British Columbia, which in turn gained hundreds of million of dollars in annual benefits from the subsequent resale of Alberta’s oil to the United States?”

Hits the nail on the wellhead.

And second:
Vic Young’s second reason why the lower Churchill remained undeveloped is because of the outstanding inequities of the upper Churchill contract.

We know them well.

In turning down Young’s request for a tripartite committee to review the “unconscionable” Churchill River situation, Jean Chretien said the upper Churchill dispute is between the two contracting parties — Newfoundland and Quebec.

What a cop out.

So where does that leave Danny Williams?

A lower Churchill deal is said to be his political legacy.

The Williams administration is taking Quebec to court over the upper Churchill contract under the good faith provisions of Quebec civil law.

The provisions say there is a legal obligation for parties to act in good faith in all legal relationships, including the negotiation and ongoing performance of contracts.

Sounds reasonable to me.

As for the little problem of how to get the feds onside in allowing power to flow through Quebec the same as oil or gas, the Government of Canada must be prepared to lay down the law.

Until then, NL will live with the "true Canadian tragedy" as we always have.

Comments

Anonymous said…
I always wondered why the premier didn’t establish through a public offering the sale of stocks, bonds etc towards the financing of the lower Churchill. 100%. Take the Walt Disney attitude; If You Build It, They Will Come. Establish the momentum of starting the project, Commence the future of the Lower Churchill and don’t look back. By the time the project was finished the power corridor would be easy (Who Wants Power)
NL-ExPatriate said…
Ah that would be BRINCO.

"True canadian tragedy"

Put another way
Tyranny of the majority pop to the detriment of the majority of the provinces.
or
Per Capita Colonialism practiced by all of the national parties for the benefit of the more populace prov and to the detriment of he less pop provinces.

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