30 Oct A bad deal for NB? – feedback
Contrarian reader Cliff White writes:
I’m in Quebec at the moment and, as you can imagine, the deal with New Brunswick is playing very well here. I can’t see how this won’t turn out to be a very bad deal for New Brunswick in the long term, similar to, but eventually worse then, the one Newfoundland agreed to under Smallwood.
At the time Smallwood signed the Churchill Falls deal, it looked pretty good, given the cost of energy at the time. The problem arose when energy prices went up dramatically and Quebec refused to renegotiate. The length of the agreement meant that Newfoundland was getting fleeced, while struggling financially, for many decades.
In New Brunswick’s case, of course, the deal is permanent. One of the things this latest deal highlights is the continuing inability of Atlantic Premiers to work together in their own interest.
One last thing I’ve wondered about for some time is why our energy resources aren’t being use here at home rather then exporting it. It has always seemed to me a better strategy to use any excess energy supplies as cheap energy to attract business rather then shipping it off to other jurisdictions. I realize this is a complex issue, but there have to be better strategies then the ones we’ve followed to date. One would hope that the NDP government will take a more innovative approach in the future.
The short answer to the last question is that intermittent supplies like wind and tidal work better as part of a large system—one that can absorb their ups and downs. Also, intermittent energy sources need backup supplies that can be summoned in a hurry when the renewables go down. And since, as a practical matter, electricity can’t be stored, it’s helpful to have someone you can sell it to when there is an excess. Hopefully, those sales will balance the cost of buying backup power from time to time. All three needs argue for robust interconnections with regional suppliers and customers. This is why a Quebec Hydro monopoly poses so much risk for the est of Atlantic Canada.
As to Cliff’s main point, five years goes by in the twinkling of an eye. From that point on, the deal’s downsides may look bigger and bigger.
As Frank Corbett’s off the cuff comment in Question Period Thursday shows, the Dexter Government is dismayed at Graham. Dexter’s comments have been appropriately muted because he has to deal with things are they are, not as he might wish them to be.
Half way through its mandate, Dexter’s task force on renewable energy, headed by Dalhousie University’s David Wheeler, faces a daunting challenge: many of the assumptions it has been operating under are out the window.