Guest Post by Agent 13
Oil to further assess the feasibility of developing the Bay du Nord oil field,
located some 500 km offshore in the Flemish Pass region, represents good news
for the province. Unfortunately, the Ball Government turned what was a good
news day on July 26, 2018 into one of disappointment and disbelief.
That the provincial government thinks it is solvent enough,
knowledgeable enough, or savvy enough to deal with one of those major oil
companies — with their mixed portfolio of huge capital assets — is a prolongation
of the same pretense that facilitated the reckless decision to sanction the
Muskrat Falls project.
Equinor, the lead player in the Bay du Nord development, and
Husky plan to spend millions of dollars studying the field and looking at the
best way to develop the structure. They will develop cost projections for both
construction and operations. If the numbers are attractive enough, they plan on
sanctioning the project within two years. Presumably, if the development costs
and oil prices don’t align, it will be put on hold or cancelled altogether.
Bay du Nord is located in a remote deep-water field containing
(based upon current estimates) in the range of 300 million barrels of oil — a
number which many industry analysts consider a marginal reserve.
representing 10% of the costs of exploration and other expenses to the end of
2017. The public will be responsible for the same share of planning and
engineering costs on an on-going basis, which will run into the tens of
millions. If, on further assessment, the project is cancelled for any of a host
of reasons, those are sunk costs for the Province.
major oil companies having rights to the field.
a high-risk gambit with 100% borrowed money.
attempt to wear two hats. The public
might consider this question: what if Equinor and Husky decide that they need
more concessions as a condition of proceeding with the project? Faced with such
a choice, on what basis would the province not cave?
 |
| Location Bay du Nord field (CBC Photo) |
More and more questions arise. For example: Why does the
Premier think he has the right to borrow money we don’t have? Why would we wait
for a return that may never arrive unless literally every aspect of the project
goes okay?
basis is it justified? Why is it that an assessment of “risk” plays no role in
our decision-making?
every project built in NL hinges.
project does proceed, the scant opportunities available to tradespeople will consist
of the most unsophisticated work on the project.
have negotiated the amount of work that the Owners must commit to the local
workforce. The Ball Government’s press release suggests that 5000 tonnes of
local fabrication will be performed here. The work seems to be associated with
mooring/anchor systems and the construction of subsea systems. There is no
mention that any module of the Floating Production System (FPSO) will be built
in NL.
“topsides” work was huge. In both cases, the bare hulls came to NL for topside
outfitting. 60% of the Terra Nova topsides were fabricated in NL; local
fabrication on the SeaRose was over 90%. Installation of the topsides,
outfitting and commissioning all took place in NL.
Nord FPSO will arrive complete, likely from Norway.
pre-development and development phases.” If the number had been converted to person
minutes, it could have “appeared” even higher! But PR flourishes aside, the
estimate is likely not even close to being correct.
formula representing the average per “tonne”. With the complex “topsides”
constructed elsewhere, the remaining mix of work simply won’t warrant the same
equation. In other words, the person years/hours of work on mooring/anchoring
systems is far less per tonne than on topsides infrastructure.
describes the specific work to be performed and the international standard for
person hours/days of work associated with each component.
of the hull, turret, flowlines, umbilicals, and other components will be
international.” That leaves only the mooring/anchoring and subsea systems.
Little wonder person years of work have been converted to “person hours”.
Trades Council. We have heard nothing from Marystown, the Shipyard Union, Peter
Kiewit, Clarenville or the many, many other small yards and contractors from
around the Island that, in the past, have benefited from oil-related projects.
_______________________________________________
Bay du Nord Framework Agreement (Technical Briefing July 2018
by Department Natural Resources)
________________________________________________
they have been left out of a major piece of work. Possibly, they are disabled
by international affiliations or local politics and are unable to object when
resource development does not reflect our capabilities, employment needs and
human resource potential.
work will go elsewhere: out of the province. With little fabrication work for
NL, the 10% equity stake makes even less sense.
released to the public. Nalcor Oil and Gas should also release a summary of the
total equity investment made to date, the anticipated level of investment
required prior to Decision Date and, based upon current knowledge, the anticipated
rate of return from the investment.
The public deserves to see the details of what inspired the
Ball Administration to get mixed up in another high-risk, speculative venture
in a Province that has only barely grasped the seriousness of the Muskrat Falls
debacle.
Premier Danny Williams, the NL offshore worked very well without Nalcor Oil and
Gas. We had a competent Natural Resources Department and the C-NLOPB was an
effective administrator, managing lands, discovery applications, exploration
licenses and benefits agreements, negotiated by the Province. The system worked
well and the Province took no risks that would impair the public Treasury.
Williams’ idea of an energy warehouse fundamentally changed
provincial policy, shifting risk onto the public. It seems that nothing has
been learned, having permitted billions of dollars to be placed in the hands of
inexperienced public servants and squandered.
capital funding on which those reliant on health and social services should be
able to depend.
Govern the Province.
_____________________________________
Most readers will know “Agent 13” as one
of the good guys, a support for “Agent 86”
Field reconnaissance missions were his
mailboxes, lockers, trash cans, and fire
myriad construction
has already written on the Uncle Gnarley
on public policy
serious.
The Flemish Pas and the Drake Passage are the two most horrible pieces of Atlantic Ocean imaginable. Cross currents, strong winds, perpetual fogs will require robust equipment and specialized procedures if is stands a chance of working.
Borrowing money for this venture is very problematic. A high risk gamble with no immediate returns; ans do I understand correctly that if it costs 10 billion that we cough up 1 billion (10%)?
Agent 13 wants to see the rate of return calculations and the timing involved, so do we all. Premier Ball is getting ready for an election, if he loses will the deal still be stuck on the government like Muskrat Falls was stuck on him?
These gigaprojects are spiralling out of control.
Why is it that leaders always try and write their own legacies with very expensive and risky mega-projects?
There is a more fundamental question. Will NL continue to depend on planet destroying fossil fuel development? Is there a disconnect in NL between cause and effect? How long will the cause of the vicious weather that keeps hammering NL be ignored and disconnected from our fossil fuel habit?
Is it not time to look for solutions that are not self destructive? Winston let us turn NL into the world leader in mini split manufacture and use.
You make me smile Bruno. You have slung many arrows in my directions as to minisplits,(Winston should as a politician, and he should use the phrase"A chicken in every pot,and a minisplit in every attic" which I thought was funny, but still an arrow) but now that Feehan has noted their potential to destroy the power demand here, maybe you finally see the value of that technology.
But we agree on climate change issues, you , I and Robert Holmes, and Ex militiary, and maybe PENG2.
Minisplits are made in Asia, Japan, Korea, and many in China, licenced plants using Japanese technology, not in the USA even. So doubt if Nfld can compete in labour costs for manufacturing here. And to mfg in Nfld, first you need to bribe the system with political donations, and then they hand out grants and interest free loans with borrowed money, otherwise obstacles are put in your way. That is development Nfld Style.
Winston
Winston I have never dissed mini splits, It is only your over the top evangelism that is counterproductive I have taken issue with.
Bruno,as I monitored for 1 year,I reported data on an ongoing basis,fog , rain or cold snaps, and summer AC loads. some on UG challenged me to report once temperature hit -15C, and I did.
Evangelism? "Let us turn Nfld into a world leader for Mfg of minisplits" now that is evangelism, that I never suggested. Maybe a world leader in percentage using them makes for goal? If so , MFs and Holyrood is dead. So , maybe a minisplit in every attic, and throw in the chicken as a bonus. LOL
Winston
Have to agree. Some of our highly skilled, competent offshore oil workers have been rubbing shoulders with their Norweigan counterparts for too long. They assume from that, that we are their equals, and yes we are, or on that individual level of expertise and operations in those harsh environments, those select few are. So they say, and no doubt whisper in our political bosses ear, let's do it the Norweigan way, see where they are, and we can do it too. But that's where the similarity ends. First of all we are using mainly their technology. They grew up with the oil industry, as the leaders, the movers and shakers. Norway invested and made good on the ground floor, reaped billions, invested it in the money markets of the world, and now using a little of the new found oil wealth to venture further afield in much greater water depths, beyond our 200 nautical mile economic zone, and into the Flemish pass. One might say almost as close to Norway as to NL. Do we have the same kind of control and clout as within our zone, I would think not. If they say they can build the vessel, delivered and complete in say South Korea at a much cheaper cost, then we will have very little say in that matter. End of story. We are a tiny province in a big country, Norway is its own country. They have untold wealth set aside, we are in debt up to our eyeballs, we are not in the same league. Even if we had money to gamble in those ventures, we should not gamble the people's money. Leave that to the hugh oil companies of the world, but still participate, but at our own level says Joe blow.
More oil development represents good news for the province say UG. Well yes and no.Yes if it generates more revenue and jobs for the province. No if as part owner we risk more public money, part owner of a megaproject.
As Heracles from Quebec says, again, with borrowed money and high risk, we be a frog wanting to be a ox like Norway
Also no as to climate change mitigation. Canada has one of the highest carbon footprints in the world. Nfld oil is a major contributor to Canada GHG. Further, Ball wants to feed back any carbon tax to the polluters (to keep them competitive)rather than to households that bare the costs.
Seems most all Nflders are in climate change denial, and maybe UG too? Half of Norway citizens now in favour of reducing oil production there, and they are leading the pack in using their hydro power for their transportation for electric cars. Here Balls says "electrify everything" to make good use of MFs power in the province. Okay we can can all laugh at Ball and his plan for The Way Forward", as we just go backwards. And the Tories environment critic even has oil on the brain. Governments that have poor governance are most dependent on oil development and leads to corruption: Russia, Nigeria and many others.Add Nfld to the list.Did not Nalcor keep a list of naysayers, and for what reason?
WA
With our 10% investment are we also on the hook for 10% of cleanup costs should there be a "spill"? If drilling is in treacherous waters there is a high risk of a catastrophic incident. Look what happened in the Gulf of Mexico a few years back and that was in relatively shallow and warm waters. High risk drilling and production should be accompanied with a detailed action plan and cost sharing agreements should the worst happen and the public should be advised of such.
Remediation in the Flemish Pass????
Our Labrador cold current plays a major part in the Gulf Stream current, which has already reduced 15 %. This can be catastrophic for climates both in Nfld and Europe.That risk is part of the latest update coming from the Climate Change Panel, is noted in the text of the document, but intended to be deleted from the summary, so not to offend the USA, Australia and a few countries who are climate change deniers (Trumpites)and economic clout if you go against them. Here , the ocean on our door step, and as goes the Labrador current and Gulf Stream, we are at its mercy.
What is MUN scientists and researchers doing as to advancing our knowledge on this and effect on our fishing resources and fishing industry? They too most all have oil on the brain. Scientists from elsewhere now trying to understand what make our Nfld fog. Resaerchers from Quebec, study why our caplin are scarce. We neglect big time our own renewable resources. What did Joey ever do in over 30 years to advance our fishery? Burn our boats advise? Two jobs for every worker, but not with the fish resource.
WA
Watched Dan , the Nalcor legal beagle decimate GTs David,and GT generally at the Inquiry, so doing an excellent job of making a silk purse of a sow's ear. So what GT says in their summary can be shown to be inconsistent with the main report of GT, or bias by GT! Ed Martin jumping for joy at this testimony this morning. Leblanc, at break time, sort of a little smile at all of this. Indeed, Leblanc was very satisfied, last week, of the expertise of GT from the get go, and GT now showing not so expert after all.
Dan setting the stage for finding that Nalcor acted reasonably in all decisions.
Winston
At the Get go last week Dan noted that GT has no expertise as to power megaprojects, (so, even basically no understanding of high maintenance of old thermal units like Holyrood vs hydro, and many other details) . I read that GT has a relationship with Williams Engineering , of western canada, that maybe they consult with.But Williams seems to also have no power system engineers, but mostly involved with buildings! So what could they offer GT for advise?
So, from the first question last week by Dan to GT, GT seemed to be on shaky ground as to their expertise, and that Dan would take advantage of their weakness and lack of knowledge on power systems.
Dan making the case for throwing out various other options so only 2 left, to all seem very reasonable, but not reasonable but manipulation by Nalcor, and now by Nalcor's laywer. But Dan might prevail to twist and turn and avoid the whole truth, just what he deems relevant. What says Joe blow?
Winston
My only comment, Winston is as in my two previous, that not much has changed, except GT has confirmed what the naysayers have been saying. That we did not need the power and muskrat was not the least cost option. So I was not overly impressed with GT report, as I don't think they had a total and indepth understanding of all the details surrounding the muskrat decision. But in general terms, they have provided the basis that the integrated island option was not the least cost option. No doubt there will be many ups and downs, and various minor points made on all sides by all parties, but that the learned judge will in the end give us the complete, unbiased, truthful, and honest facts, and that nalcor and the govt, cooked the books in their favor, in sanctioning muskrat, and that we did not need the power. The universe is unfolding as it should says Joe blow.
Well, Dan , the Nalcor legal beagle almost scored a knock blow against GT and their report, as to the power forecasting, Conservation Demand Management and elasticity issues.
If the Concerned Citizens don't have a energy efficiency consulting firm to guide them, them the trickery of Dan andNalcor can prevail.
The problem : GTs ignorance of the details of CDM, elasticity,and of the "technology change " factor used by Nalcor in forecasting, and especially the method of econmetric or END USE models.
END USE< END USE < END USE. Recall last week how our Kate got tripped up on those two words, and actualy misled Leblanc, but was corrected, fortunately by GT's David. But the issue was glossed over. WHy?
Even Dan admits he does not understand the "technology Change" change factor, so alright says Dan that David of GT does not understand it , nor explored it.
Let's just trust Nalcor and Nfld Power that what they did was fine! Remember Reagan using the old Russian proverb "Trust but verify"
Can we trust Nalcor?
Can we now trust Nalcor's lawyer? Damn no!
He omits or skirts around what is damaging, and suggest that Nalocr was "world class" , did everything by the book. If so , why the boondoggle? The made not one false assumption but close to a dozen. Nalcor's work, and to Nfld Power, does not pass the smell test. If Dan prevails here this Inquiry will not give any justice to our citizens.
Winston
Etienne says that he never said Nflders should abandon the Rock (last UG piece comment), and hopes they will not. I suggested that Etienne said they will abandon Nfld. I think he said they will depopulate and Nfld be similar to Detroit? Maybe I recall it wrong?
Today TD forecasts that for NL 2018 to be a decline in the economy here but 2019 and 2020 a rebound, one of the better in Canada.Maybe TD, holding some of MFs debt wants to show positive news? oil prices up is one the factors. Today oil >80.00, but Fortis down a bit.
But oil is a two edged sword.
WA
Hi Winston,
Yes, you recall wrong about that one. I am the one comparing what is happening in Newfoundland with Detroit city. As for what Etienne expressed at that moment, it was that he feared depopulation of the Rock as a consequence of this fiasco. Not that this is something he wishes, promotes or supports. I told him that considering even in Detroit, which is not an island so people can literally walk away from it, complete depopulation did not happen, it would clearly not happen in Newfoundland either.
So that's the resume of this discussion I had with him on the subject some time ago.
Sorry Etienne, I mixed up comments from you and Heracles. Heracles says he compared us to Detroit, but Heracles also says he has never been to Nfld.
We are no Detroit, no concrete jungle here, but beautiful world class scenery and wild life, and whales and puffins and icebergs, and quaint fishing villages, and salmon and trout, and polar bears and walrus at times, and forest, and berries, and large island water resources, and mostly hardworking people, but stupid political leaders, a curse for sure. So no Detroit here. I once went to Detroit , travelled hobo style on a freight train in summer, from the RCAF base in Trenton Ont. A friend from Windsor took we that way to see the sights of Detroit, in 1967. So, sights, yes, I saw naked female breasts for the first time at a show there, such sights never seen in rural Nfld. So an education too. But not to compare to the sights of Nfld, Heracles.
Now on the Nlfd west coast near Port au Basques, there is the Twin Hills I recall. The locals call them the tits, as the resemble large breasts. And to we have the town of Dildo, but no naked breasts to be seen there either.
So , Heracles,if you come to Nfld, you might relocate here, and help us with our debt problems?
Winston
Hi Winston,
the comparison with Detroit is not about the sights, architecture or landscape. It is 100% economic.
Detroit lost its core business and ended up in a debt loop that concluded on the bankruptcy of the city. At that time, everyone who had enough skills or money to leave the city did. The result was that only the poorest of all stayed behind.
These ones are the ones who need support from the public system, not the one feeding that public system to support others. As such, the entire system collapsed.
So many houses on sale that their value dropped to 0$. So many that the city paid contractors to bulldoze them not house after house, but streets after streets. Buildings downtown could be bought at about 5000 or less.
Because there was no more money in the city, all stores closed one after the other. No more grocery or any other kind of store to buy the most essential of anything.
Police and other services were overwhelmed with too much chaos and could not handled it. Public parks were turned in improvised garden for people to grow their own food, every piece of metal on a structure owned by the city was stolen and re-sold by everyone.
Detroit turned into a real war zone.
Officials stats already showed that in the first 3 months of the years, Newfoundland's population decreased by about 1 600. If people are kept in the dark, more and more will choose to Leave-N-Live instead of Stay-N-Pay. If too many leave, it may hurt the economy enough for pushing more people who were ready to stay, to leave. Once that circle is started, it may be very very difficult to revert.
Lucky you Winston, you had the chance in 1967 to see the Canadair CC – 106 Yukon (or the CL-44, with a swing tale for cargo loading) in action while in Trenton!!!
(This beauty; https://www.dusinfo.net/showpic.php?id=267 )
Good Heracles that you repeat the Detroit comparison, as you see it. But rural Nfld is not Detroit. Even in the Dirty Thirties, and miserable Commission Govn, and 6 cents per day for many, there was no war zone here. Nflder were survivors and did not run for the hills, nor abandon the Rock in droves. Some merchants and business people helped the poor with much credit and assistance to help the survival, though some did not much, and a few closed up as you say can happen. There may have been a little theft in those days but not much, as rural Nfld especially neighbours were friends, that you might not much understand.
So you use another fable of crying wolf, to scare Nflders that the sky is falling, so sell your house now before too late, and leave to live you say, and so create fear instead of hope and solutions. Why trust your expectations Heracles?
TD yesterday forecasts a rise in house prices here next year after a decline this year, so they do not project the wolf fable.
You are full of fables Heracles.
Winston
Ex Military, In 67 I was fortunate, as training for an officer, to hitch a ride on a transport plane back to Nfld for a weekend , most to see my girlfriend, and maybe get lucky. But her virtue was in tact and I was a bit disappointed.She was not as one might imagine the Detroit ladies, but my virtue there too was intact.
LOL, EX
Winston
Winston,
Detroit City is very real and not a fable. Also, I do not tell Newfoundlanders that they should leave. I just read the very real and officials stats about Newfoundland demography which show that many already made that choice.
I also says that the government should not leave people in the dark because the longer they will be, the more and more will choose to leave and that may be irreversible. Should my goal be to see the Rock empty, I would not hope for more transparency from Newfoundland's government.
Newfoundland is in the middle of a crisis, that is true. Years of structural deficit, plus existing debt, plus MF debt is simply too much. The best (only?) way to deal with such a crisis is to face it and be fully aware of all of its facets.
To kick the can down the road, minimize the situation, deny it, search for responsibility outside of Newfoundland or expect a miracle are no way to handle such a situation.
Cue the discussion currently on CBC out of Toronto radio; Arts, Letters and Common folk applying Elastic Economics to their own lives, are streaming out of the Big Smoke to Hamilton for God's sake. Back to the soil we called it in the 60's.
For at least the third time , David of GT says CDM(Conservation Demand Management), his example of this technology is smart thermostats. Tonight on NTV , Peter Upshall of Nfld Power, Take Charge promoting Energy Efficiecny, and includes programmble thermostats, and an ad saying 100,000 installed n Nfld. WOW. seems to align with GT.
Is such thermostats very effective?
Go to the Inquiry website, see the ICF report from 2015. Compare the energy saving and demand reductions from such thermostats vs minisplit heat pumps or insulation upgrades for basements or other measures. Thermostats one of the worst as to savings.
Nfld installs 100,000 thermostats, of little benefit and actually detrimental as to peak demand. NS installs 100,000 minisplits. Who got it right?
When Upshall appears on TV promoting not just minisplits but Cold climate minisplits, then you can say they care about the ratepayer and energy savings. Otherwise they continue to mislead the public. Maybe Upshall will appear before Leblanc and be questioned by lawyer Budden.
Winston
Upshall says Nfld power offers 100 dollars as a website prize for some contest. I offer 100 dollars for the first UG reader who post accurately the numbers, and page number from the ICF report, mentioned above, and so help the MFCCC at the Inquiry. Trust but verify.
WA
Lots of hits on UG, but few researchers. So as NP offers only 100 dollars, I offer 250.00.someone get off their duff and find the answer.
WA
Quote: In the Base Year of 2014, NL’s Commercial sector consumed about 2,360 GWh/yr. Exhibit ES 5 shows that space heating accounts for about 27% of total commercial electricity use. Lighting accounts for the second largest percentage, at 17%. These are followed by HVAC Fans and Pumps at 12%, miscellaneous equipment at 9%, refrigeration at 8%, secondary lighting at 5%, and domestic hot water (DHW) at 5%. Other end uses account for 4% or less of the total.
Space heating is the largest item.
In the report http://www.muskratfallsinquiry.ca/files/P-00120.pdf there is a table on page 80 titled exhibit 30. It lists potential items for energy savings in the commercial sector. The top three items are:
High Efficiency Air Source Heat Pumps (109,737 MWh/yr)
Building Recommissioning (96,103 MWh/yr)
Advanced Building Automation Systems (49,883 MWh/yr)
Number six on the list is Programmable Thermostats (31,416 MWh/yr)
Since space heating is the largest single item, and ductless minisplits are about three times more efficient than baseboard, it is not surprising that the greatest potential demand reduction would be from heat pump adoption on a massive scale.
Peter Upshall's excuse was that there weren't enough heat pump installers for mass adoption. Later that morphed into carbon dioxide reduction rather than energy reduction. Since moving from baseboard to heat pumps when using green energy from Muskrat Falls didn't reduce C02, why encourage heat pumps with rebates?
As for moving to biomass, the excuse was that they are an electric utility and only interested in electricity.
The take charge savings ideas (full loads of dishes, unplug the alarm clock in guest bedrooms, unplug USB chargers) are all trivial. The glaring omission are things that would really make a difference to electric demand, like rebating heat pumps and pellet stoves. I would have been happy just to not have to pay provincial sales tax on a heat pump.
At a government level, we could have stopped replacing oil furnaces with electric baseboard in public buildings.
Thank you anon@22:59, as to the commercial sector
As to residential, see Exhibit P-00119 page 172, it shows the gross lower energy efficiency potential up to 2029, mwh/yr
For Interconnected For Isolated
minisplits ………….134,507 828
basement insulation….. 38,891
crawl space insulation.. 37,097
Programmable thermostats….174 1
Electronic thermostats……547 5
So thermostats almost nothing, and also resdential heating is greater loads to the grid than our commercial
So David of GT only citing smart thermostats, instead of big energy savers.
But why do they show saving for the isolated much lower than for the interconnected?
Winston
It came out different than on my screen, should be
For interconnected
minisplits ………..134,507
basement insulation….38,891
crawl sp insulation….37,097
programmable stats……..174
electronic stats……….574
For isolated system
minisplits…………..828
programmable stats……..1
electronic stats……….5
WA
A programmable thermostat will only set a ratepayer back a hundred bucks or so.
However, your minsi-split heat pump contraption you keep going on and on and on and on and on and on and on and on and on and on about… purchased and installed at exorbitantly inflated cost from the local heat pump cartels… will set a ratepayer back anywhere from $5K to $7K. And that's with any recoup on the investment not occurring until after a significant portion of the unit's life cycle has expired.
So any such comparison is pretty-much meaningless.
We should let the Inquiry determine the comparitive value of EE for CDM, and impact to the cost of the Interconnected vs Isolated option.A typical unit is 4000, paid or in about 5.5 years,(less than 3 years if rates double) . For 1200 sq ft house and 7000 cost it saves the owner 15000 over 15 years, and over 30,000 if rates double. As to savings, these are ICF consultants figures not mine, but yet this all not considered by Nalcor. Hps but one measure, the top dog, but there are many others that make up the CDM . Yes thermostats only 100 installed, and 10 rebate. Like computers, if you put junk in you get junk out. So GT concept of CDM measures,thermostats, and Take Charge is junk. ANd actually adds to peak load in the morning warmup, so larger capacity thermal capacity needed at Holyrood. What Nalcor or Nfld Power division do u work for anon?
WA
"A typical unit is 4000, paid or in about 5.5 years,(less than 3 years if rates double)."
You must be living in some kind of techni-colour dreamworld if you actually think the local heat pump cartels will be charging the same price for a heat pump plus installation after electricity rates double.
If a cartel and price fixing, report it, as a crime. If too much business and prices go up due to demand, get into the business your self and compete to keep prices down. It's called the the free market system. And it creates jobs besides for tradesmen.
You are a whiner, period, and not worried about your thousands of dollars ever year to pay for this boondoggle.
I have anecdotal evidence… I know an individual in the Moncton NB area who had two… that's TWO… heat pumps purchased/installed at a total cost of $4K.
So if the local outlets in NL are charging for just one unit installed the same price other vendors are charging elsewhere in Atlantic Canada for TWO units installed, in my mind that's a goddamed local cartel engaged in price-gouging.
First advise what is the make , model no, capacity, and if the installer a regular HP contractor or a brother in law type installer/
Because I have a friend with a 70,000 dollar car, and another with 2 cars for less than 70,000. so you talk nonsense and told that before so nothing new there. If you can get a unit here installed by a contractor you have a piece of junk and an un qualified installer who supplied you a piece of junk, and expect little savings on energy and then you get mad as hell for your own stupidity
WA
Go way with ya and your silly pedantics for chrissakes.. .this individual is a business-person who researches his/her investments.
You think this business-person might've wasted his/her money on a piece of junk not up to the requirements of functioning in a northern climate like the snowbelts of NB?
Don't be so naive… I still say there's a bloody heat pump cartel at play here in NL, just like everything else in this godforsaken shithole.
The reality is that offshore oil shouldn't be developed with short term construction jobs as a priority. Peckford tried this and the feds had to bail it out to the tune of $1.8 Billion with a serious loss of badly needed royalties for the provincial government and Hebron had to same theme-short term construction jobs in return the province gave up massive amounts of royalties. When the Hebron GBS was launched the price of oil was $52 per barrel and at that price it would have taken about 14 years before any royalties kicked in because the $14 Billion it took to build, finance and maintain the structure needed to be "earned" first. Even at today's prices Hebron may take 7 to 8 years before any royalties are accrued at a time when nearly $700 a year is need just to keep the hydro system going.
Creating short term construction jobs for political purposes is what got us into this mess with Muskrat Falls and it certainly won't bring any prosperity to this place in the future either. We need to stop these Mega Projects and ask ourselves "Why isn't private industry developing these resources and if so how can we use these resources to increase our finances instead of another make work project that makes no economic sense."
Well AJ, Dan for Nalcor kept racking up points this afternoon. As to Vale and Long Hr, GT had to withdraw that as to the issue of loads if Voicey's Bay closed, that GT was wrong to assume Long Hr would shut. So even GT making a false assumption, a hard blow that.
Then as to Energy efficiency savings to be overlooked, Dan says Vale is a modern plant, suggesting there is no opportunity for savings, trying to get GT to admit this, but didn't.
Now Long Hr while new, is using 100 year old technology for heating their huge buildings. I was amazed this was even permitted, and Vale being a wealth firm, but likley getting electricity dirt cheap, and fixed , immune from MFs probably. Same as electric baseboard heaters essentially, and so 3 times more energy used then necessary there. But what could GT say? he didn't know. So Dan is cunning, and deceived us and Leblanc. But he opened that subject, so now that can be revealed later by Budden , we hope.
So too on transmission losses, whether 5.15 % or 9 %, Dan scored a point. he showed up GT for another assumption. But did Dan reveal the true transmission loss? No, and didn't want to because it bad for Nalcor likely. But he sows doubt, that was his aim Joe.
Now he has opened that subject Budden needs to demand the true comparitive transmission losses, and that will not be so pretty for Dan and Nalcor. So on it goes.
Budden is not polished like Dan, but he is on the right track and needs to kick ass with Dan, with facts and evidence. He can do it.
Winston
Your digests are great, thanks.
Did any UG readers following the Inquiry, think it a bit much for Nalcor's laywer Dan to insult David of GT not knowing that Long Hr had a deep water port? Nor whether Vale's buildings there were LEEDS standard or not of Gold, platinum or substandard as to energy efficiency? Likely GT would not have known that Beothic once roamed that area also, if Dan stated that fact. But if Dan says its true , David politely says "I believe you".So was Dan, like Nalcor , arrogant and disrespectful to GT, likely so, and to infer that GT was stupid not knowing that Long hr was a deep water port.
WA
Yes agree Winston,nalcor lawyer scored some points with DT, especially on Vale plant operations, the largest industrial user of electricity in the province. So think DT should have known more about that subject, and a little more in the know about Voicys Bay shutting down, unless he knows something more than we know, but he certainly didn't show it. Also, sometimes Dan appeared more familiar with the DT report than the authors. But don't think he destroyed much of the core of the report, but certainly nibbled around the edges to undermine it. Will be interesting to see the next few days, as mostly nalcor people on the stand, and if their focus remains the DT report or their own boondoggle. Nalcor might attempt to use the DT report as a scape goat, focusing on that rather than nalcor. Hope the other parties and lawyers don't allow that. DT is not really the ones under investigation or what the inquiry is all about, it is about nalcor and the boondoggle. So don't let the buggers off the hook and shift the focus to DT. Think there might be some nalcor people egar to get their teeth into DT, thinks Joe blow.
And while Nalcor's lawyer, at Goose Bay, defends the waste of 12.7 billion, anther lawyer for Nalcor, also at Goose Bay at court trying to convict protesters from 2 years ago, who tried to stop this waste and destruction. 17 still facing the judge there. Recall one woman hauled off and locked up at HMP in St john's last year, Beatrice, I think.
So now at Leblanc's court, all locals in fear to appear, to witness justice or injustice in action, there for that spectacle. The large building is empty of spectators. Maybe Leblanc should do an invite?
PF
GT is no expert for mega hydro project planning and design, construction or operation. GT are accontants, not engineers. So GT mostly relays engneerings reports and decisions already made,and what other say of best practises, and whether it is good or bad, largely for Leblanc to decipher. Otherwise, off the bat, GT could say nalcor f..ked everything up, so the Inquiry could end at day one, and save us 30 million.
16 lawyers there, and how many engineers to explain the technical? How many ecomomists there, to explain the false economics arrived at by Nalcor?
How many engineers at the Inquiry? One….. Kate, Leblanc's legal counsel.
So, on a engneering technical point, that is understood neither by GT nor Dan,(Nalcor's legal beagle), should Kate say " To assist the Commissioner and the court on this point, let me clarify", and so explain this to Leblanc, and to the public watching as well? Now, is that improper in such proceedings? And the Inquiry having the good fortune that Kate is both a lawyer and an electrical engineer with power system experience, and a little economics knowledge as well. Perhaps some UG reader could educate me and UG readers further if this appropriate for Kate?
Winston
Back on topic. Although there is some risk associated with this participation, it is in no way remotely close to Nalcor taking on Muskrat Falls. First and foremost, this project is being managed by companies that have significant “skin in the game” as well as significant experience in the business. If the investment doesn’t pan out, the CEO will not be rewarded with a $6 Million dollar exit. In fact the whole senior executive team would lose a large portion of their share value which is their primary funds for retirement. The promoters behind the Bay du Nord project all have a lot of their own money at stake unlike the St. John’s Board of Trade people who had nothing personally at stake in the success or failure of Muskrat Falls and were lining up for fat contracts.
Equinor is two thirds owned by the Norwegian government but it is managed by the other third (private) so no gross mismanagement occurs as happened in this province with Muskrat Falls. This investment and strategic positioning with their oil and gas assets has allowed Norway to build a $1.1 Trillion dollar heritage fund. Alberta, with its hands off approach and Ralph Klein’s subservience to the oil industry has built a $18 Billion heritage fund over a similar period. Norway has about the same population as Alberta and has had about the same oil production. Alberta currently has more production than Norway although two thirds of their production is oil sands which is less profitable
The 10% allows a seat at the board table which is not a bad thing. The real money for the province is in the royalties not the economic stimulus or even the return on the investment. Some of the investment that is written off against capital can be questioned at the Board level which if successful can foster earlier royalties.
Agree with you mostly anon:08:39. Including on topic. But guess there are not many on this blog that are in the oil industry or focused on that aspect of our economy, right now. Mostly focused on power rates and the boondoggle. Though it was rather pericular to throw off shore oil into UG at the time when the focus is on the inquiry at its start up time. Wondering if that was a nalcor trick too, as they are still in charge of our oil dollars. Hope they are not the ones deciding how deep we will be investing in this project, even if it can't be as big a boondoggle as muskrat. But when you get in, difficult to get out, like any gambling game, and your 10 percent equity contribution keeps skyrocketing. Cheers, Joe blow.
Joe, I too was expecting a blow out piece by UG yesterday morning. But then thought UG being prudent , perhaps, being one of MFCCC members, so not to be critical of the Inquiry, so let her go with the flow now. But you, I and others need not be so restrained AJ.
Maybe I am wrong.
WA
And Ashley of the Telegram reports that Nalcor is confident of their MFs decision of least cost, as to yesterday proceedings, restating the point scored by Dan, but no critical analysis of what was said. So she parrots the Nalcor confidence in decisons, and does not even mention MFCCC Budden legal beagle, who stated to chip at Dan's pride and arrogance. But then what of prudent measures of hydro megaproject design does Ashley know? So if nothing, can she do critical analysis or just parrot for Telegram readers, and advertisers that pays her salary?
Winston
WA
Time, I think, for perhaps Plantet NL to explain, all in one piece
Econmetric model
End use model
Elasticity factor in econmetric model
Technology factor used in econmetric factor
The devil is in the details, of engineering and economics, and these terms being tossed around at the Iquiry, and no one understands them we are told, not even, by his own admission, arrogant Dan of Nalcor. If so, then how can Leblanc understand how things went so wrong to the tune of 12.7 billion?
This is not rocket science! This is fundamental to prudent forecasting for all power companies. This is not beyond AJ's understanding, as to complexity. A little technobabble, maybe, but essential to see the where the devil hides.
Winston
To find Nalcor guilty as charged should be duck soup, as AJ suggests, because, not just one thing messed up big time, but a dozen things.
Stupid forecasting alone should be sufficient, and there is so much more than that.
In my research I saw one investigation or Inquiry as to 20 years ago in the USA: a power company proceeded to purchase and install about 600MW of additional power supply, based on forecasted needs, all new gas turbines.
The job was done, and found not needed at all, as the demand was not there,so all wasted money, so a big investigation.What was the result,from expert analysis? Wrong forecast obvious, but why wrong? They used just "econometric" forecasting model, like Nlfd dHydro, Nfld Power,and Nalcor uses here, and used for MFs
That USA inquiry found they never used an "End Use" model, deemed to be best practise!
Dose anyone remember Kate tripping up over the words END USE, last week?
Winston
So now with Scott , the legal beagle for the Consumer Advocate, exposing some damming emails, there is an objection from Fitzgerald, and Leblanc tightens the reins on Scott, saying it goes beyond what the GT experts can comment on. But now we know, GT had seen none of these emails up to now, and causes concern, as expressed on their face big time: within days of MHI finished with the PUB in 2012, Nfld Govn hired them, and Gil Bennett and others all buddy buddy, to hire MHI, and Govn enacted the Take or pay noose on the ratepayers, and the PUB put in the lock up then, no say to protect the poor and downtrodden.
Winston
What were the e-mails about? Were they entered into the record?
Now we see that GT was only to address the elimination of the of options as selected by Nalcor. So it an option was not even considered, then nothing there folks. Is that the way this goes?
CDM and EE was not an option.
CDM combined with wind and island hydro was not an option.
So, that was ignored, and now we cannot even question why it was ignored as a possible least cost option? Do I read this right?
What was very likely the least cost option, such a combination, is now off limits for discussion, is that right? Or am I wrong?
Seems Kate just said that was outside the scope of this Inquiry?
Winston
Keep the Shadow inquiry going boys and girls. Don't be hamstrung with limited terms on the GI.
Hopefully, materials that would be disallowed by the terms of reference will make their way onto this blog for analysis. If Des can't publish them, he can link to them and others will host them.
I have looked at the options and I am quite certain that the low cost solution was the isolated grid, refurbishing holyrood, upgrading the lines from Bay d'Espoir to the western Avalon, allowing private firms to build wind farms and reducing heating demand with heat pumps. In the event that the province grows again (uncertain) then there is additional small hydro available and an incinerator/thermal plant could have been built at Robinhood Bay landfill.
Negawatts (Watts not used or demand reduction or conservation) is ALWAYS cheaper than generating power. Government should have exhausted this first before looking at building new, centralized, generation capacity. Unfortunately, TakeChargeNL didn't even scratch the surface. Holyrood is often shut down in the summer months so the real issue is power for electric heat and for that there are many solutions (insulation, heat pumps, oil, propane, biomass, better building standards or that old standby, going to Florida for the winter months :-).
Also: there are interesting rumours on Twitter about Astaldi (preparing for bankruptcy), wind damage in Labrador and General Electric (turbine defects). If anyone is up on this, please post evidence.
The schedule for today was intended to be first the culprit who fudged the forecast, a Mr Statton, who we are told by Kate is sick to day and will appear in the morning.
So we hear from the System Planning engineer Bob Moutton. Bob determies the least cost forward to meet the forecast, and did the analysis on Isolated vs MFs. Bob says Stratton, I think, had used some elasticity in the forecast, who knows what?
Normally forecasts are for 20 years but to make this work (on paper) they used 50 years which is very risky. So he considered for the Isolated Island, gas turbines, some wind, but nothing on CDM. So Kate says: Just to be clear, what you did, that was least cost, right? Of course CDM was excluded, but say little on that as to why. So bingo, MFs 2.4 billion cheaper! Kate explains that wind is only available when the wind blows, t , you cannot store energy like with hydro. Bob agrees. At this point, I imagine, Bruno jumped out of his chair, as you can store excess wind energy with batteries which are now being used on some grids. But also, there is pumped storage. For this, you use wind energy not then needed to pump water back up to the reservoir, for reuse of that water. That is about 80 % efficient, which is more than the 30- 40 % efficiency of Holyrood or gas turbine thermal. But Kate and Bob says you cannot store. Who too believe?
Then there s load shape> that is Bob's area too. So we have a very bad load shape due to our antique baseboard heater technology, now a century old. When you improve the load shape with lower winter loads , it reduces the grid costs and smaller back up generators, so a more efficient operations. Any analysis on that by BOb? Apparently not. And Kate asked no questions on that.
Winston
At the cost of being a bit premature in commenting on our technically educated computer and program experts, as they will be answering many question over the next couple of days, in determining the least cost options, and if we indeed needed the power. I respect these gentlemen in their technical, and professional qualifications and computer expertise. But the fact remains that despite their best advice and expertise we still have a project that we didn't need, way over budget, and years behind completion schedule. Technical advances were supposed to avoid these kind of challenges. As somone reported years ago on a similar project, that Joey had mused that he taught the minister of finance should have an adding machine, that was the latest technology of the day, and of course a typewriter. So maybe the numbers are bigger today than they were 60 years ago, but 10 percent is still 10 percent, and a kilowatt of power is still a kilowatt. Our population has remained almost constant, and our industry power need has not changed much. Yes, our method of heating our houses has changed, but that concept of 20 degrees of heat or so has not changed in our homes. Churchill power was not economically viable to bring to the island 60 years ago, and is still not economically today, as shown by the muskrat boondoggle. So was it the high tech and computers that made us do it. Reminds me of the young lady appearing before the courts, and had caused an auto accident at the time of using her cell phone. She blamed her smart phone as the cause of her accident rather than herself. Will the latest technology and programs suffer the same fate during this enquiry, or will the learned judge place the blame on humans and their egoes, and placing too much trust in their technology ask Joe blow.
Yes, wait and see what Straton says. In my days at Hydro, the planning dept and forecasts were always taken with a big grain of salt, because it was largely looking into a crystal ball. Who cold accurately say what the load would be 10 or 20 years down the road?
That a watt is a watt, yes, but one that is generated at MFs, almost 10% vanishes before reaching your house, that is transmission loss. But it must be paid for by the power company, and for MFs 10s of million of these disappear like that, so Straton must consider that, when avoiding CDM and avoiding EE, and Moutton must consider it for planning facilities 1100kw away, and Mr Warren must consider it as to the ecomomics. And too , a 50 year forecast is voodoo economics so much can change. And too, for a plant 4 times bigger than we needed, hoping the load would grow, when there is no growth. And too our peak winter load is now almost 200 Mw lower than forecast a few years ago, going down instead of up, Joe.
So, if I were Straton , and faced with this result , and to face the TV cameras, I would be sick too. So how to explain all of that?
To get the boondoggle, first you make up, that is fudge, a forecast that shows we need the power, sometime need it or maybe not at all, then you avoid considering reasonable least cost solutions,and put in silly options that are off the wall anyway and discard them, and tailor the result you want:MFs
Then you hire consultants to give you cover, and say we had independent advise. So you are off to the races for a boondoggle.
Now the Inquiry: show all that as a reasonable thing to do. Can't blame computers or software. Where is the checks and balances? ANd the Gatekeeper ,Ed Martin left the gate wide open.Not agatekeeper like St Peter, but this is St Martin. His lawyer today wasted an hour to protect that halo, saying GT was unfair but failed. Where is the fairness to 12.7 billion of our public money all wasted, and this lawyer Harold Smith, trying to keep the halo in place! Leblanc should have told him to sit down after 10 minutes, after rambling on and on, worse than me on minisplits, which now everyone soon wants one.
So a Take and Pay for 50 years, knowing little power was needed in the early years so plan on it for the later years so a generational thing. Sounded fine to Kate, intended to "smooth out the costs " she said. Well the smoothing shows a 700 million short fall every year. Lots of smooth talking going on, and we need straight talk, Joe, not smooth talk.
Winston
These witnesses are mid level management who were being told what assumptions to use. Did they cook this up all on their own or did some executives carefully guide them on what to do to get the right answer? Some of these Inquiry lawyers need to root out the methods by which the planners iteratively issued models for review and what feedback was given and by whom.
Well Winston you are getting the picture finally! The outcome, MF,was predetermined, the alternatives twisted to appear uneconomic.
The outcome was politically determined from the outset to satisfy a huge ego. The result is a 12.7 billion (and counting) bill for a useless, dangerous, unneeded MF.
It is time to stop pretending this project has any justification.
Talk about trying to smear lipstick on a 12.7 billion dollar pig…
https://www.cbc.ca/news/canada/newfoundland-labrador/ed-martin-lawyer-attacks-muskrat-falls-audit-unfair-1.4837707
Are these witnesses open to legal action or are they shielded by the inquiry? I was wondering when Ed or DannyW would start threatening to sue witnesses who don't toe the line, I figured it would be early on to help persuade the later witnesses to mind their manners
"From a business standpoint, I'm wondering why it didn't happen years ago because we have very low attendance during midweek," said Richard Wells, manager of sales and marketing.
Richard, it didn't happen years ago because it's run by a derelict government that doesn't give a fiddler's fnck about pissing away million$ in taxpayers' dollars.
https://www.cbc.ca/news/canada/newfoundland-labrador/marble-mountain-cutting-ski-days-1.4837619
And now here we have the Prince of Bile himself, Gerry Byrne, abdicating his sworn oath to protect NL's wildlife because he hasn't got the spine to do what need to be done…
http://vocm.com/news/indigenous-groups-who-rely-on-george-river-caribou-will-decide-if-herd-is-endangered/
So heartbreaking that the George River caribou herd had the tragic misfortune to be condemned to so-called "stewardship" by mealy-mouthed, 3rd-rate politicians who haven't the guts to take the decisive action necessary to protect it.
This week is Energy Efficiency Week, so says the Take Charge ad by Nfld Power. They promote washing with cold water. They show wearing sweaters in the house.
Meanwhile at the Inquiry we see little if any consideration was paid to Conservation to avoid the megaproject of Muskrat falls. Now we need sweaters we are told. Are we the customers of concern, or are only the shareholders all that matter?
This weeks TakeCharge challenge: aerators on the faucet to save hot water. They claim $14 a year in possible savings. I calculate far less. In any case, $1 a month is trivial.
So, I panic a bit this morning, No UG, no Inquiry, No watching Stratton on the hot seat, my Internet was down, Rogers! What else but a conspiracy by Danny to prevent viewers from watching? But then up and running just in time. Danny losing his clout? Will i get sued for saying that? Steve Marshall lives just 6 houses down and seems a nice fellow. But I worry.
WA
Winston, just so you hold your horses and keep blame in check,,,lol… I heard on VOCM that there were Rogers outages from BC .. And most places in between… Don't think Danny has that much clout…lol…and of course all back to normal..cheers,maverage joe…
Yes, and I was joking, knowing it was up in Canada too.
WA
Straton testimony impressions: what does other UG reader think, and AJ, and engineers especially? What would Liberty say?
Winston
Two things Winston, I am not as much in tune as you are, not an expert, and my old technology. I would maybe not have questioned that Rogers was down, as when I tune in, I loose the feed every 10 or fifteen minutes, so have to try and click it back in and it seems to happen at very critical times…lol…but I have the patience of Jobe, or should I say Joe. So I just comment in general terms. Appears we have world class experts testifying, with world class technology, so just waiting for the shoe to drop, to explain totally why we have this boondoggle. Or maybe the shoe already dropped and some of us missed it on day one when Dr. F testified. That overruns in maga projects can be up to 97 percent. And I missed that presentation completely, just read about it after. But as you may recall, I then commented, that the way you figure out the cost and time period to do maga projects, is you just figure out the cost and time, then double it, then award cost plus contracts, and then add the interest on the money….and bingo…yo have the total cost and time. So I am trying to stick with the "big picture", as I am sure down the road, we will hear many give us the big picture. But should also say I was impressed with the assistant commissioner this morning, well prepared and on the ball, but as she said she had discussed this previously with those giving evidance. So maybe like some others that haven't questioned any witness yet, I am keeping my powder dry says Joe blow.
When and who will be on the stand to explain the assumption of the prime consultant role, by the Owner, (NALCOR)? This should also bring about discovery on the abandonment of true objective and professional project risk management.
Both Kata and Budden doing a good job, but especially MFCCC legal beagle.
Any one else notice he is left handed and why that may be important, I think?
Winston
At the end,Leblanc said, as best I remember, "Today something very complicated was very well explained by these witnesses".
Yesterday I said Planet NL should do a piece on on explanation of : econometric model, end use model, technology change factor, and elasticity. The Inquiry covered these terms today and how they were applied (or misapplied), by these witnesses,as a factor to arrive at the boondoggle.
So Joe, and especially PENG2 and 3, and Ex military , and Heracles, M. Adams,and Bruno, and any technical or non technical people…..what is your impressions, do you agree with the learned judge? Was there nothing to see there, or lots to see?
Winston
Not having heard or read the report of the am expert, on day 1, but having now read it this evening, I recommend it to give perspective on the testimony of the planners heard today, as to possible bias or misrepresentation ( or possible deliberate misrepresentation). Also it has value to assess the decision makers who we have yet to hear form, and the next witness and major decision maker, Danny Williams.
Winston Adams
Regarding the Commission of Inquiry to the Muskrat Falls Fiasco, why is CBC Here & Now continually providing a soapbox to The Six Million Dollar Man for play-by-play commentary yet the Labrador Land Protectors and similar groups are being ignored by this media outlet?
WTF is up with that?????
The dam expert says the cost overruns of dams are typical 96 %, if so then MFs seems not abnormal, but it also says the median is 32 % overrun which is much less.
CFs was actually under budget slightly, and on schedule. Was CFs included in his list? Was other HQ projects vastly over budget? Why the silence of our Quebec friends here?
WA
There is another aspect of this conversation which must be discussed; the International Seabed Authority and the division of profits between NFLD, Canada (other provinces), other nations, and First Nations. NFLD may not be entitled to much of the money from a rate of return and royalties.
The International Seabed Authority (ISA), established under the 1982 United Nations Convention on the Law of the Sea, is a body created by the United Nation Convention on the Law of the Sea in 1994 where by all its members states are authorized to carry out sea related activities in the area such as, mining, trade and many others, and as of July 2017, the ISA has 168-members around the globe (ISA, 2018), including Canada. An interesting factor with the ISA is that this body has a legal right or authority to adopt laws which are related to the protection of human life and maritime sea resources.
ISA's official objective statement is that "… the seabed and ocean floor and subsoil thereof beyond the limits of national jurisdiction (the Area) established in Part XI and the Agreement, organize and control activities in the Area, particularly with a view to administering the resources of the Area." This places ISA in the legal position to act as an authority when nations wish to expand mining operations beyond their political maritime borders (200 nm).
ISA has not had the opportunity to be involved in many offshore mining operations. This is due to the large expense required to undertake deep-water mining. Currently, resources are still being mined inside political borders and this trend will continue until these resources are nearly exhausted. The return on investment for corporations usually follow the standard economic model where lower capital investments, combined with lower operational costs, produce a reasonable priced product. Expanding further offshore changes this model as the costs involved become much higher and additional R&D costs are introduced. The product selling price (based largely on cost recovery and profit) does have a theoretical upper limit; the breaching of which can result in losses due to less consumer interest in purchasing this product. This means that there is potentially less profit when operating further offshore, thus making it an high-risk venture.
References:
About The International Seabed Authority. (n.d.). Retrieved September 16, 2018, from https://www.isa.org.jm/authority