When you’re talking formal logic, there’s a term called “tautology.” What it means is a statement that is always inherently true.
Some of the classic forms? “Either A or not A,” which you can see in something along the lines of “This candidate will win or will not win.”
Since the term “candidate” means someone is necessarily running for a spot, it stands to reason that they will either win or not win.
Keep that in mind when you read Manitoba Hydro International’s (MHI) conclusion about whether or not Muskrat Falls was the least-cost option of the two power generation possibilities they were told to consider on behalf of the Public Utilities Board.
“As a result of the investigations based on the material, data and assumptions provided by Nalcor, MHI finds that the infeed option is the least-cost option of the two alternatives reviewed. There are, however, risks associated with the assumptions used for certain key inputs such as load, fuel prices and cost estimates which may impact the cumulative present worth analysis for the two options.
“The risks associated with these inputs are further magnified considering the length of the period (2010-2067) used in the preparation of the cumulative present worth analysis.”
The provincial government has classed the report as pretty much wholehearted support for the project. In other words, they read the first sentence of the conclusion and stopped there. The project is good — and that’s fine, because that’s what the provincial government believed anyway.
But it’s worth thinking about the report’s conclusions in a different way.
No matter what happens if the project moves ahead, the MHI report will be correct.
If the project comes in on budget and performs with flying colours, MHI will be right.
If oil prices don’t rise the way Nalcor predicts and we end up eating giant electricity price increases all on our own, the conclusion will be right.
If the costs of building the dam, power plant and transmission system go wildly out of whack and the project has to recover massive cost overruns through a much higher rate for its power, MHI will be right.
And if the demand for power doesn’t occur in the way Nalcor is modelling that it will — to the point that we actually have to pay Nalcor for electrical power we’re not even using — MHI will still be right.
It’s hard to conceive of a situation where MHI hasn’t specifically warned that clear risks exist.
In fact, in the guts of the report, MHI came up with a number of circumstances where the comparison tilted different ways, sometimes by billions of dollars.
Much to ponder
That’s what happens when you’re looking at a vast array of variables and those variables are magnified by trying to decide what the right course of action is some 57 years down the road.
It is not an easy decision to have to make.
To make the decision that much more complex, go back to MHI’s conclusion about the project and their questions about the risks associated with the project’s assumptions about electrical power load, fuel prices and cost estimates.
Ask yourself this simple question: what else is there to consider in a theoretical power project other than load, fuel prices and cost estimates?
It is a fascinating report, and clearly the closest thing we’re going to see to an independent review of the project — the provincial government has been pretty clear that no one else is going to go any further to question Nalcor’s baseline assumptions, and even the PUB, tasked to review the project, is working on an extremely tight deadline while hemmed in by a reference question that makes it possible to consider only two possible choices.
To reduce it to a more obvious tautology: Muskrat Falls is either the best choice, or it isn’t.
Without being too cheeky about it, the Upper Churchill deal could have received exactly the same vote of confidence.
The consulting business: giving fuel for every single side of the debate. And always right.
Russell Wangersky is The Telegram’s editorial page editor. He can be reached by email at email@example.com.