Power to the People of Newfoundland and Labrador.
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Ever since the idea of developing the lower Churchill project moved to the front burner I’ve been a strong advocate for a truly home grown project. The province should not only develop the lower Churchill itself but that it should do it in a way that allows the power is used at home and not simply sold across the border into Quebec, Ontario or the U.S.
If Newfoundland and Labrador is to have any hope of a future and of attracting major industrial investment it needs this energy to attract them. Selling the power outside the province just makes it easier for companies to setup shop elsewhere and continues the forced out-migration of our citizens. Aside from the need for industrial development here at home we also need this power to improve our environmental record and reduce greenhouse gasses for the benefit of all the world’s people.
Should the Province of Newfoundland and Labrador develop the lower Churchill for it’s own use?
How in the name of God, Allah or Mohammad can the government of Newfoundland and Labrador even consider doing anything else?
The province is in desperate need of power to fuel industrial growth. The entire province, especially the Labrador portion, is arguably one of the richest sources of raw materials on the continent, if not the planet itself. Currently much of hte province’s resources are exported for processing elsewhere. Why is this happening? The answer is simple. There is no available source of inexpensive and abundant power in the province that would enable smelters or other processing facilities to be built and efficiently run.
I say “no available source†because there is indeed abundant power and there always has been. Never the less, it’s not available for use in Newfoundland and Labrador. Instead the power is being exported and used to fuel the economic engines in Quebec and beyond.
Can the province afford to make the same mistake with the Lower Churchill as it did with the Upper? Forget for a moment the bad financial deal that was signed in the past. The more critical issue is whether or not the province can afford to give up the potential industrial development and economic growth that would come from controlling and using a vast supply of power right here at home.
According to Newfoundland and Labrador Hydro, the province currently has a generating capacity of 7,289 megawatts for local use and for export. While our current needs are largely being met (with the exception of certain localtions in Labrador and on the island) there is very little power available for growth and expansion. Hydro predicts that we will hit the proverbial wall and have difficulty even supplying our existing needs in less than 5 years. Capacity and cost issues are plain to see all around us. Some paper mills have been struggling with a limited availability of low cost power in recent years and this led directly to the closure of the mill in Stephenville. In a limited power environment such as exists today, how can ayone expect major industries to setup shop here?
The lower Churchill project has the ability to produce 2,824 megawatts or an additional 40% above and beyond the capacity currently in place in the province.
Even though development estimates on the project run as high as $9 billion dollars, this is a bargain at the price.
It’s been estimated that the Upper Churchill system has generated over $24 billion in profits since coming on line in 1972 (approximately 96% of those revenues have gone to Quebec Hydro, 4 % to NL). The value of clean power continues to rise and it’s a revenue stream that will never stop flowing. Although the Lower Churchill is only half the size of the upper Churchill project, the numbers are still staggering and once the initial outlay has been recovered, revenues from hydro power are free to flow faster than the river itself.
Financing should not be an issue in the current political environment. The provincial government is in better financial shape than it was in the 1970s, when the upper Churchill deal was signed. For that matter, it’s in a better position than at any time in since joining confederation, thanks to high oil revenues. It wouldn’t be a stretch to expect the federal government to cost share the project based on its green value. The situation simply requires the action of a provincial government that is willing to be aggressive in attracting industry partners who are looking to setup shop in a low cost energy market.
Canada has extremely large and difficult commitments to meet on the environment. The Lower Churchill project alone would allow the Country to meet nearly 10% of its initial Kyoto commitments (should Canada ever decide to move on that issue). This doesn’t even take into account the additional benefits to be gained by using most of the power in Labrador while directing less than 20% of it to the island. That 20% would allow the shut down the Holyrood oil fired generating facility, an environmental black eye for the entire province and the Country.
The Holyrood station burns an estimated 6,000 barrels of heavy crude per day in each of three units, for a total of 18,000 barrels per day. It also uses over 750,000 litres of sea water per minute for cooling and 900,000 litres of fresh water for make up purposes. In return for this environmental disaster the plant generates a paltry 490 megawatts of power. Shutting down this plant would not only help Ottawa meet its environmental challenges but imagine how much money could be saved if Newfoundland and Labrador Hydro didn’t have to buy 6.5 million barrels of oil a year at market prices in order to run the Holyrood plant?
Not only should the lower Churchill project be developed by the province and for the province, the power should be used to attract industry and improve environmental conditions right here at home. The only power that should even be considered for external sale is any unusable over capacity that might exist and any over capacity should be viewed as a problem to be addressed and resolved as quickly as possible.
The timeline being considered for this project would see first power flow from the lower Churchill by 2014. This gives the province a seven years to market the power potential and to attract energy hungry companies from around the globe. Companies that are likely to jump at the chance for access to clean, stable and reasonably priced power in an area with a readily available workforce.
The potential is staggering in proportion. No longer would raw ore need to be pulled from the earth only to be processed elsewhere. Smelters could be build in the province.
No longer would raw materials of any kind need to leave for processing. Factories and mills would be able to setup shop in the province.
Perhaps most importantly, no longer would our people need to migrate out of the province in order to find work. The work could come to us.
Retaining control of this power is not something that’s nice to do. It’s something that must be done for the province’s very survival.
If the project is managed correctly, within a year or two of first power, the province of Newfoundland and Labrador could be in a position where it is experiencing impressive industrial growth.
Within a few years of first power, the province could find itself experiencing in-migration rather than out-migration.
Within a decade of first power the province could find itself with a booming oil industry that, although important, is only a small percentage of over all provincial revenues rather than its life’s blood. A life’s blood that will one day run out.
Within three decades of first power the Upper Churchill contract will expire and the staggering revenues from that mega project, as well as the available power it contains, can begin to flow to it’s rightful owners.
In less than 50 years, less than the time the province has been a part of Canada, Newfoundland and Labrador might just experience a population explosion. Power brings industry, industry brings jobs, jobs bring wealth and wealth brings people. The migration of 1 or 2 million people into a province with a land mass the size of Newfoundland and Labrador would not be a problem, in fact it might be a god send.
Finally, you add to all of the benefits outlined above the ultimate benefit to our province. Massive in-migration would eventually equate an increased population and a larger population translates into additional seats on Parliament Hill. With those additional seats would come an entirely new kind of power altogether. A power that has been lacking for too long in Eastern Canada.
By Myles Higgins
@ March 27, 2007