Muskrat Falls is an excellent investment

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I have watched the debate over Muskrat Falls with keen interest, as it is one of the most important projects that Newfoundland and Labrador will undertake in my lifetime.

I have reviewed and digested much of the information available and attended presentations by Nalcor CEO Ed Martin. I have also spent considerable time reading editorials that are both for and against the project. I strongly support this project as one that will have significant long-term benefits for our province. I support this project for four main reasons. Others have outlined many more reasons to believe in this project.

1. We will build a 100-year asset — really forever — that will be paid off in 30 years, which will give us generations of excellent returns for the people of the province, and also stable long-term energy rates.

2. We will get a connection to the North American energy grid through the fixed-link deal with Emera in Nova Scotia. They will pay to build the link and use one-third of its capacity for 35 years and then it will be turned over to Nalcor for $1. A number of opponents say that Nova Scotians are getting cheap power, however, from this province’s perspective without the fixed-link deal, it is water that would flow over the dam and down the river without any benefit. This superbly negotiated deal gives us an important link to use now for excess power and to use exclusively, after the 35-year deal ends, for the remaining life of the asset.

3. This will put the province in the enviable position of having 98 per cent of its energy from clean energy sources. We will demonstrate tremendous environmental leadership with this project and it will put us in a position that most provinces and countries throughout the world can only dream of.

4. I have utmost confidence in the world-class team at Nalcor, led by Ed Martin. I’ve had the opportunity to question Mr. Martin and several of his senior staff about this project and they have always provided answers that are clear, and demonstrate the extensive due diligence they have undertaken.

I would encourage everyone in the province to learn more about Muskrat Falls as it will have a profound effect on future generations. I feel it is our responsibility as Newfoundlanders and Labradorians to get engaged. I am confident that when you review all the information you will come to the same conclusion as me and support this strategic investment for our province.


Martin Sullivan

St. John’s

Organizations: North American

Geographic location: Muskrat Falls, Newfoundland and Labrador, Nova Scotia

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Recent comments

  • Winston Adams
    October 22, 2012 - 09:10

    Mr . Businessman, business seems to be your expertise, and this article says MF is a excellent investment, and you beleive MF is good for NFLD. Now this project is 4 times bigger than would normally be required for our energy supply, and even the load growth forecast is very doubtful. A slight dip in the forecast means no load for this for the island. It's a take and pay contract, so even if the power is not needed on the island, the taxpayers and households will be stuck with the massive debt and costs to pay off. Sales to Nova Scotia is free for 35 years, for their contribution. Sales to the USA are net loss sales in that the revenue won't cover costs, and it is hoped that Labrador mines will pick up this power. But even those sales is less than costs because we can't sell as low cost as Quebec. So it is merely short term benefits at tremendous risk. As a private investor, if you could buy shares in this MF, you would need a reasonable return on investment. Would you enthusastically invest? Invest with concern? Or walk away? And if not good for you, why is it good for Nfld?

  • Winston Adams
    October 21, 2012 - 08:40

    Perhaps Mr Businessman can tell us by want means one can sell our power around the globe? You lose 10 percent in transmission from MF to St. Johns. So how much do you have left if we get it to Japan or China or Germany? Oh! Send it over the Internet? Who can do that? When was this invented? Has Mr Businessman patented that yet? Does make a profit make a difference?

    • a business man
      October 21, 2012 - 11:59

      I don't have any knowledge of how to sell power around the globe. I don't deal in resources because resource extraction cannot be offshored. I only invest in industries where workers have little if any leverage. My point is that I don't have to wake up to the Henry Ford Fact because I don't need my employees to be my customers. That point relates to this story because even if MF causes newfoundland citizens to pay higher power rates and huge debts, my business will go on because I have customers around the world. I believe that MF is good for newfoundland, but if I am wrong, I will still have customers all over the world. That is all I was trying to say.

  • Eli
    October 20, 2012 - 19:49

    Who's on tap for next week? The financial numbers are not in Sullivan supports Muskrat Falls. This crowd (Collingwood last week, and another one the week before) is led by the nose like those MHA's who were fingered to call Open Line to praise their saviour Danny Williams.

  • Brad Cabana thanks for your great questions
    October 20, 2012 - 17:32

    Thanks Brad Cabana for adding your input! The answers to the questions you asked are glaringly staring us in the face in the form of Economics 101. Even an elementary math student would be able to come up with the answer, but the covetous brains behind the Muskrat Falls monstrosity are not there to make a viable project for the province of Newfoundland and Labrador and its inhabitants, they are there to satisfy their would-be developers' instinct or their insatiable appetite or desire to make tens of millions and maybe hundreds of millions of dollars on the development of the project and then leave Billions of dollars in debt for the next generations of hydro-rate payers to be burdened with for the next 57 years. What a legacy for those would-be developers and politicians to leave to the long suffering economically deprived people of Newfoundland and Labrador! We finally thought our politicians had gotten the message right, but it is quite obvious they didn't. The only people who will be able to buy the hydro electric power will be the developers who will be involved in constructing the project and the rest of the elite of our province. Most Newfoundlanders and Labradorians are not earning big money. By the way the status quo with regards to the calibre of politicians who have governed Newfoundland and Labrador over the past 63 years has not changed. I truly believe we have produced and elected some of the most covetous and uncaring politicians to ever govern any place in the World. I hope to God those involved in the Muskrat Falls debacle will come to their senses before all is lost.

  • Brad Cabana
    October 20, 2012 - 11:56

    Sure its an excellent investment if you want short term employment and profits. Throwing 6-10 billion at anything will creat alot of short term jobs. The ral jobs, max 80, created to run, etc this dam for the long term, for the money invested, is almost non-sensical. The business community needs to wake up to the "Henry Ford" fact - "If the people building my cars can not afford to buy them..." The people will be indeed left to pay the huge debts, and power rates. The mines, etc will get subsidized power for the 20 or so years they are in production. But where will the hyper inflation and debt repayment leave the competitiveness of NL business in the medium to long run? It's not an excellent investment. It's a terrible, stupid waste of the oil legacy.

    • a business man
      October 20, 2012 - 16:45

      No Brad. The Henry Ford fact only applies to companies that are dependent on domestic customers. It does not apply to companies that can sell to people around the world. In most of my businesses, I do not need my Canadian customers to make a profit, and I don't need employees that can afford to buy my products. And I don't want businesses that cannot market to customers around the world. The bottom line is that, regardless of if you are selling widgets or pencils, the Henry Ford fact is a thing of the past because the Internet, and global markets makes domestic sales quite irrelevant.

    October 20, 2012 - 03:39

    Without a transmission line to carry the upper Churchill Power After 2041 when the contract with Quebec expires ,NFLD will still have to go to Quebec with cap in hand to transmit power on Quebec power grid, Quebec will still be holding all the cards.

    October 20, 2012 - 03:27

    Muskrat Falls is the only answer for the island for clean long lasting power. The Holyrood oil fired plant is burning many, many millions of barrels of oil each year costing many,many millions of dollars, it burns so much oil,that the smoke coming out of its stacks, has listed it as being one of the top 10 air poluters in the world,The cost of oil will increase each year to run plants like Holyrood but the muskrat falls will continue to turn the turbines forever,without burning a gallon of oil,the muskrat falls will turn the generators at no cost once it is built "FOR AS LONG AS WATER RUNS AND GRASS GROWS"

  • Ed Power
    October 19, 2012 - 19:03

    One half million people, living in 190,000(?) homes, paying $7 billion dollars (before the 40 - 50% overruns, 90%+ if the MHI Wuskwatim Hydro Project is any indication) for decades, and decades, and decades, and still more decades to provide subsidized power for industry and export. What could possibly go wrong, and where do I sign up?

  • John Smith you appear to be accounting illiterate
    October 19, 2012 - 17:15

    John Smith, you call the anti Muskrat Falls group the lunatic fringe but it is quite obvious that you, along with the pro side, are leading the province of Newfoundland and Labrador and its inhabitants into a contract that will cost Billions of dollars for just 800 mega watts of hydro-energy. I truly believe you are accounting illiterate and probably the real lunatic fringe.

  • John Smith
    October 19, 2012 - 15:12

    Well, the lunatic fringe have spoken, let's forget about the project, and go back to watching our bills increase, as they have by 70% since 1998, and will again by afurther 7% this march. Yes, that sounds so much better than building a dam, and providing power for our future needs, stableizing rates, connecting to the mainland, getting away from middle east oil...yep, the lunatic fringe have all the answers...dupes....

  • Newfoundlanders and Labradorians have been hookwinked by politicians and business people all their lives.
    October 19, 2012 - 12:37

    When someone already has the most important natural resource in Newfoundland and Labrador under his/her belt, the fish, a renewable resource, what do we expect that person to do other than support the government(s) on their endeavour. We cannot forget the Musrat Falls is a joint effort by both the Feds and the Province to fulfill Prime Minister Harper's new energy strategy, a venture that Newfoundlanders and Labradorians will pay dearly for over a 57 year amortization period. This is a terrible deal that is going to cause great economic stress on Newfoundlanders and Labradorians and their province during the next 57 years.

  • David
    October 19, 2012 - 11:31

    Muskrat Falls is already an investment failure. The first step to ANY investment decision is to identify, address, and mitigate all the various risks to adverse outcomes. The Government of Newfoundland, including Nalcor, has instead avoided, obfuscated and outright dismissed any such analysis, preferring instead to ram this pie-in-the-sky idea through like all other political footballs, and hope for the best. Our track record with this approach is long and illustrious. We will get exactly what we deserve.

    • William Daniels
      October 19, 2012 - 12:18

      Couldn't have said it better.

  • Read it
    October 19, 2012 - 10:49

    Most of us don't have time to study it or read it. We're too busy working or taking care of families. The only people that have time to read all that techno babble are the unemployed (they're not worried about paying the debt) and the retired (the ones who already ran up a massive debt). Most of us working people only get half an hour during lunch to see or read the news.

  • Winston Adams
    October 19, 2012 - 10:39

    Last year 11.4 percent of our energy was produced by Holyrood oil fired. We plan to spent some 8 billion or more to get us to 98 percent hydro. Nalcor's world class expertise cited has obviously not seriously looked at other effective options. My calculations show with efficient heating for the residential and business sector,it would offset Holyrood's 2011 year production by 2.7 times at a fraction of the cost of MF, and achieve the same result- 98 percent green hydro energy. These are my figures, where is Nalcor's for this approach? Compact bulbs just don't cut it, and anyone knowledgeable about efficiency knows that. They are treating efficiency as a joke. Environmental leadership? Check out Efficiency Vermont to see how to do it. Where are our yearly targets, for transportation and all sectors?

  • Maggy Carter
    October 19, 2012 - 09:56

    Thank you Mr. Sullivan. We'll be sure to add your name to the registry for the future Wall of Shame. Most intelligent Newfoundlanders have long since come to realize that the economics of this project are extraordinarily bad. The critics of Muskrat - and of the process by which Muskrat is being shoved along without proper scrutiny - include a great many respected citizens of this province and Canada. These conscientious objectors have no discernible axe to grind and nothing to gain from their public stance (they may even stand to suffer financially because of it). The fact that NALCOR and government feel the need to recruit defenders for Muskrat from within the business community - people one way or another beholding to government - is simply more evidence that this silk purse is being fabricated from a sow's ear. Mr. Sullivan is a successful businessman. If someone were to bring him an investment project that is as costly, risky and unprofitable as is this Muskrat boondoggle, he would throw him out the front door. Notice that nowhere in Sullivan's letter does he even broach the question of whether Muskrat is a viable investment. So, despite his years of experience in business, Martin Sullivan and others like him are quite prepared to turn a blind eye to the brutal economics of a project that will saddle ratepayers in this province with a backbreaking monthly bill that will persist for the next sixty years. Nor will the damage stop with ratepayers. When homeowners begin to balk at astronomically high utility bills, they will choose to opt out. They will exploit every opportunity to reduce consumption and to switch to more efficient sources of energy. When that happens, it will be the taxpayer who will then be called up to foot the bill - i.e. to make up any shortfall in revenues to satisfy NALCOR's obligation to service its enormous debt (our enormous debt). Again, thank you Mr. Sullivan. Your shallow, half-hearted defence of this project reinforces my belief that Muskrat Falls - in the form being advanced by this government - represents a greater threat to the fiscal integrity of this province than did the Upper Churchill itself. Now, which of our illustrious business leaders is up next?

    • Joe Welch
      October 19, 2012 - 13:01

      What did this person say or do that justifies your personal attack of him? There is nothing in his letter that has earned him such a demeaning and personal attack. It's just one person expressing an opinion in support of a project. And you, as someone who has frequently complained about the personal attacks and character assassination attempts by others, are so quick and effective to conduct your own character assassination. Looking back over your previous comments it is apparent that personal attacks are your preferred method of dealing with anyone who speaks in support of this project. Have you no decency at all.

  • Sniff... what's that smell?
    October 19, 2012 - 07:59

    These are the reasons? Really? Let's pick this apart. 1) ROI 'for' the people? Any profits are coming out of our own pockets! You don't profit when your only customer willing to pay the cost of your product is yourself. 2) It will provide us with a fixed link to mainland markets? What good is a fixed link if the energy we have to sell is not cost competitive with the market? The only energy exported will be highly subsidized by, you guessed it, the NL ratepayer. 3) 98% Green generation? We have 85%+ now, much greater than most jurisdictions globally. We already are world leaders. If We want to make a difference in green energy, we should be looking at our transportation system, which is the real contributor to GHG from this province. 4) The Team. Having confidence in Ed Martin's team is not a reason to spend billions on a project.

  • Cold Future
    October 19, 2012 - 07:34

    We have a giant asset at Upper Churchill which is paid off and will provide us with two thirds of its 5500 Mw capacity in 2041. Why build a generation project which is very challenged from an economic viabilty perspective. It will result in a very high taxation and associated hardship to the people through increased electricity rates or diversion of oil revenues in order to subsidize the rates.The people would love to see a detailed evaluation which proves otherwise.

  • Maurice E. Adams
    October 19, 2012 - 06:56

    1. We will build a 100-year asset — really forever — that will be paid off in 30 years, which will give us generations of excellent returns for the people of the province, and also stable long-term energy rates. (NOT SO --- the 'project', including transmission will be paid off over 50 years. Rates increase 2% EVERY YEAR (and the actual rate of increase itself, go up much faster in the latter decades --- for our children and grand children. Ask yourself, when the actual cost is 37 cents/Kwh and nalcor is only charging 16.5 cents/KWh in the first year, the difference MUST BE made up in the later years by our children and grand children) 2. We will get a connection to the North American energy grid through the fixed-link deal with Emera in Nova Scotia. They will pay to build the link and use one-third of its capacity for 35 years and then it will be turned over to Nalcor for $1. (NOT SO. Emera has not signed on to build an link, and have 2 years to decide IF they will. If they do not, ALL excess power Must be sold (given) once again, to Quebec. It will be designed for 50 years, So by the time NL owns the line, it will be near its end life and cost NL billions to build. 3. We will demonstrate tremendous environmental leadership with this project and it will put us in a position that most provinces and countries throughout the world can only dream of. NOT SO. While Holyrood accounts for 8% of our greenhouse gas emmissions, 73% is from transportation and large industry (like CBC oil refinery --- which government is doing nothing to reduce. 4. Mr. Martin and several of his senior staff about... have always provided answers that are clear, and demonstrate the extensive due diligence they have undertaken. (NOT SO. About as clear as the answers my Mr. Sullivan --- sourced, no doubt, by Nalcor)