Muskrat Falls as ‘crown jewel’ — hilarious

Published on July 8, 2014

It is clear that Nalcor, plus the two previous and present adminstrations, have a seriously flawed appreciation respecting inevitable implications arising from current modes of developing “stranded” hydroelectric sites in Labrador (e.g. Muskrat Falls).

The basic problem stems from false expectations that such energy outputs show market characteristics as do durable commodities, whereas, in fact, their realities will more largely resemble catalysts. Catalysts demand different handling than commodities.

At Muskrat, this basic error became compounded by a mismatch of a relatively modest-sized (though horrendously expensive) site plant with long, uniquely problematic transmission requirements.

Despite all this, at the NOIA conference Muskrat Falls was touted hilariously as the “crown jewel” of Newfoundland and Labrador’s future economy: and Nalcor’s annual report, in the like vein, fantasizes on “multi-generational prosperity.”

Just to be clear. Oil typifies a durable commodity, valuable at production, during transmission and saleable even long after.

Electricity, however, in keeping with its largely catalytic nature, engenders little or no “market” value at its remote generation site, nor during its necessarily costly transmission; then, if profitable distribution is not immediately guaranteed, its non-storable nature results in dissipation of all potential value.

Hence, the unique market vulnerability of “stranded” hydropower, especially for those export sales which Muskrat Falls proponents extol so lavishly, supremely ignoring self-evident limiting factors — remunerative contracts not nailed down in a wider energy market that is ever-changing and highly competitive!

Though Nalcor/government are both blatantly loath to admit it, Muskrat Falls viability relies solely on the captive Newfoundland and Labrador domestic market (industrial clients enjoy “special deals”) which Muskrat Falls will serve only marginally (if at all) — a victim exposed to unprecedented near-future risks.

Far from being the “crown jewel” of NL’s future economy, the Lower Churchill projects as now presented are loaded dice and Newfoundlanders and Labradorians the obvious dupes.

A rethink is urgent.

Dr. J.F. Collins

St. John’s