I would like to respond to comments made by Brian Jones in his July 27 column (“Premier masters inconsistency”).
In his opinion piece, Mr. Jones asserts that “Oil prices have been dropping for a few months. The per-barrel price of oil declined about $20 since April.” He suggests that this should be a reason for not proceeding with the Muskrat Falls hydroelectric development.
To suggest that Muskrat Falls should be stopped because oil prices have declined for a few months is shortsighted and ignores the trend of the past decade or so.
I think a brief review of that trend warranted.
Shortly after Hibernia began producing oil in the late 1990s, Brent Crude was selling for as low as $12 or $13 per barrel. By late 2003, when this Progressive Conservative government first came to power, the price had risen to approximately $29.
By the end of 2004 and 2006, the price per barrel had increased to $40 and $60 respectively.
Early in 2008, oil had climbed to just under $144 per barrel. Then the short term, global recession hit and it fell dramatically to roughly $40.
Shortly after, the price again increased to more than $91 per barrel at the end of 2010 and it averaged $111 per barrel in 2011. As I write this, oil has risen again to almost $113.
Oil prices always have been and always will be volatile. Looking at the trend though, shows that one thing is clear: oil gets more expensive with time.
That is an indisputable fact that has been stated by me and Premier Kathy Dunderdale on numerous occasions. Evidence of this can be seen when residents compare their fuel and heating bills today versus five years ago.
Of course, everybody has the right to offer an opinion. However, I believe that opinion should be well informed and supported by accurate data.
I suspect Mr. Jones is not really interested in seeing Newfoundland and Labrador reach its true potential by moving forward with large-scale energy developments that are clearly in the best interest of the province.
Perhaps he would rather see the province slip back to times when the economy was not as solid as it is today, when outmigration was occurring at unprecedented levels, when Newfoundland and Labrador was dependent on equalization payments to pay its bills.
Simply put, Newfoundland and Labrador is a better province than it was in 2003. Our economy is strong and our fiscal shape has never been better. More people are working right now than at any other point in our history. Our infrastructure is much improved and our tax regime is more competitive. There has never been a better time to develop a project such as Muskrat Falls.
Minister of Finance and
president of Treasury Board