Being Contrary With Those Contrary With Muskrat Falls

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I doubt that anyone could conceive of a more farcical debate than is currently existing throughout Newfoundland and Labrador with regards to the hydroelectric development of Muskrat Falls. It is as if a chunk of our population developed an instant dislike of project the moment it was proposed and have held fast to their position regardless of any debate or reason. It is unfair to belittle them for their opinions as all Newfoundlanders and Labradorians are entitled to have them, but when said opinions are affecting public policy then they must be defensible. This is where most of the arguments against developing Muskrat Falls begin to come apart as they cannot hold against the force of logic and reality. It becomes even more apparent when one attempts to analyze the criticisms of the development individually.


Costs seem to be perhaps the greatest concern when criticizing the project. The price tag of $6.2 billion as per Nalcor's projections is certainly hefty, but there are mitigating factors, such as at least $1.2 billion of the sum being paid by Emera as their part of the deal. In addition, this sum is not instantly paid by Nalcor and our government, but is spread over several years of construction. Once the infrastructure is in place, it then cost only a few million a year to maintain and operate and we then have installations that would continue to produce for decades. Since the Upper Churchill facilities are expected to last a minimum of seventy years from their creation without expensive and massive retrofitting, I think it is safe to assume we can expect the same from Muskrat Falls. So spread over such a time frame, the up-front costs of the hydroelectric development are certainly cost effective, if not outright cheap when considering the other options for power development to meet our growing needs. The alternatives, such as installing wind turbine generation, new island-based hydroelectric developments, and retrofitting Holyrood, have their own costs and since we would probably need them all, I think we would reach a comparable price tag of billions of dollars rather quickly. We would be looking at even greater yearly costs as any such developments, save hydroelectric power, can even begin to meet the lifespan of the Muskrat Falls development. For those who point out that power rate will probably increase from the project, they ignore the fact that the power rates we pay will increase over time anyway and that Holyrood is dependent on oil, which is decidedly more expensive than the free water that hydro development utilizes.


Environmental concerns seem to also be a mainstay of those who oppose the project. There are those oppose the possible flooding that will occur from the development and the effects it could have our environment. Herds of moose and caribou have certainly adapted to the hydroelectric developments in Newfoundland and to a comparable extent in Labrador thus mitigating concerns about endangering their survival. Other species will adapt and possibly prosper in the limited changes the development would bring. We also have decades of wildlife and forestry research since the original developments of Bay D'Espoir and Upper Churchill to learn from and to use to mitigate any negative results. Then there is the climate change aspect. Without pursuing hydroelectric development, such as Muskrat Falls, the burning of fossil fuels at Holyrood will continue and will probably have to be expanded to meet future needs. All that extra carbon in the air is a concern that must be considered. As for green energy alternatives, they too have an impact upon the environment; wind turbines can pose a hazard to birds and we would also have to use vast tracts of land for wind farms and transmission facilities. Environmentally speaking, Muskrat Falls is arguably far better than the alternatives and can only be viably criticized if you wish to have no impact upon the environment and thus no power generation at all.


The deal itself seems to be the final major area of concern. There is no question that the Upper Churchill deal has traumatized the people of Newfoundland and Labrador. Besides the almost palpable dislike it has fostered towards Hydro Quebec, it seems to have made us suspicious of anyone who would attempt to make a deal with us for our hydro resources. Naturally, this leads to the assumption that Nova Scotia's Emera has some sort of nefarious purpose in making a deal with Nalcor. Let's jettison the paranoia and focus on reality. Emera is tasked with providing power to the people of Nova Scotia, who pay much higher power rates than we do, and making money while doing it. They need power and rightfully believe that we will provide them with it for the long-term (guaranteed 35 years) if they provide billions of dollars up front. That's a lot of faith, both in us and in the ability of the project to make money. Nalcor faces the same expectations for our province; glory is meaningless to them with regards to Muskrat Falls as they can only be in it for the power and profit it generates. Nalcor is not some starry-eyed non-profit. The deal maintains primary ownership for Nalcor and even has reversion clauses dictating the assumption of ownership of Emera's positions once the original deal ends. Some would say that Nalcor is taking on too much risks and should partner with a deep-pocketed, known player in large scale hydro development. Nalcor could do so, but would probably have to give up much more ownership of the project. The only candidate that would leave is Hydro Quebec, who may be willing to reach an agreement that Nalcor would find acceptable (a tiny possibility), but such an agreement would not be politically possible in Newfoundland and Labrador. The agreement is sound and it is unfair to criticize it based on other hypothetical partners or arrangements that are themselves flawed.


It is fine to have doubts about the Muskrat Falls development and even to provide some opposition to it as such debate can only serve to make us better understand what we actually want from it as a province and people. However, this opposition has to be reasoned and has to actually serve some productive purpose instead of encouraging stasis and inactivity. There is just so much potential in developing this resource, which is far more currently manageable than the larger Gull Island. Once completed, the island portion of our province will finally be connected to the North American power grid and strengthened by the options that provides. Once completed, older island based hydro facilities like Bay D'Espoir can be temporarily idled for retrofitting to vastly increase the power they provide and further increase our hydro resources. Once completed, the extensive new transmission links can lead to the development of isolated mineral depositions or power generation that could not justify huge transmission links of their own. Once completed, Muskrat Falls will not only pay for itself (as every hydro project in Newfoundland and Labrador has), but can generate the revenue needed to develop Gull Island far more cheaply. We only need to move the debate from proceeding with the project or not to how to best make it work.  

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