Jerome Kennedy takes the reins of one of N.L.’s busiest departments
Jerome Kennedy — Submitted photo
Jerome Kennedy has to set priorities as he gets up to speed. There’s just too much going on in the province’s natural resources sector.
Since he was appointed to the portfolio Friday, he’s had a meeting with a top official in the forestry branch of the department, but Kennedy didn’t even bother to ask about the Grand Falls-Windsor mill expropriated from AbitibiBowater.
Forestry, he said, will have to wait.
“My first few days I’m trying to address the issues that are urgent or require immediate attention,” he said. “The urgency will be in familiarizing myself with the department as a whole, then of course, Muskrat Falls is an issue that I have to obtain much more detail about, and then getting a better understanding of the oil and gas and mineral industries — especially where this is mining week.”
Kennedy has to hit the ground running, picking up from his predecessor — Shawn Skinner — who was defeated in the Oct. 11 provincial election.
There’s a lot to be done.
By the end of the month, the province needs to finalize details of the $6.2-billion Muskrat Falls hydroelectric deal.
Kennedy said most of those details will be worked out between provincial utility Nalcor and Emera, its Nova Scotia counterpart and partner in the hydro development.
“There will be some legal agreements put in place that will deal with everything from governance matters to operation and maintenance agreements to joint-development agreements, supply and delivery of power and issues like that,” Kennedy said. “I won’t be as involved
in those discussions because that’s between Nalcor and Emera, although I’ll certainly be briefed on them and updated.”
On the Muskrat Falls file, Kennedy will also have to sort out a review being done by the Public Utilities Board (PUB) into whether the hydro dam is the lowest-cost option for Newfoundland’s electricity needs.
The process was supposed to be finished by the end of December, but it’s been put on hold, because the PUB says it hasn’t received enough information from Nalcor.
Kennedy said he’ll give the PUB as much of an extension as is necessary to get the job done.
“They will certainly be given whatever time they need to do the job. We want this done right, and it’s important that they have the time to do it,” he said.
As things move towards a final debate in the House of Assembly on Muskrat Falls in the spring — and then a sanctioning decision by cabinet — Kennedy has other files to worry about.
The provincial government relies on offshore oil revenue for roughly a third of the provincial budget, and production is declining in the offshore.
As a former finance minister, Kennedy said he knows what’s at stake.
“Those non-renewable resources have to be utilized to build our infrastructure that we require in the province, such as schools and hospitals and rinks and roads,” he said. “The only way to keep the money flowing when you’re dealing with non-renewable resources is to find new non-renewable resources.”
Only a few days into the job, Kennedy is still getting briefed on the specifics of how to get that done exactly, but speaking to the Telegram, he was full of numbers to emphasize how important the natural resources sector is.
Oil revenue represents roughly $2 billion per year to the provincial coffers over the past several years.
Mining companies are forecasting $15 billion worth of capital investment in Labrador West alone. The Hebron offshore oil project represents another $7 billion in capital expenditures in the province.
“Last year the mineral shipments in this province had a value of $4.7 billion, with approximately 6,000 men and women employed in the industry,” Kennedy said. “The forecast value of exploration expenditures in 2011 is $155 million.
“We can never underestimate the significance of mining to our economy.”
As for the mill in Grand-Falls Windsor, which the government accidentally expropriated, Kennedy said he’ll get to that eventually.
“The forestry is certainly a very significant part of our economy, and not one to be underestimated,” he said. “That’s one that I will be reading more about as I move along.”