THE WIND/HYDROGEN PROJECT: WILL WE BE SUCKERS AGAIN?

Even after Muskrat Falls, transparent and oversight institutions independent and capable of assessing Government’s embroilment in foolish ventures have not materialized. A public still thinking that they won’t have to pay, and a Government preferring to keep their options open, and their “friends” handy, are content to risk more of the same. This collective laxity provides its own proof that we are destined to be suckered again, whether in relations to the World Energy GH2 proposal or some other.

The sale of the Stephenville Airport – a separate matter – on undisclosed terms, for reasons of “commercial sensitivity”, only proves that the cancer of secrecy begun under Danny Williams, rather than shrunk, has metastasized. The purchaser promises 5,000 jobs, ostensibly building drones, when we can neither staff the health care system nor the local take-outs. The story could inspire gut-busting laughter, except the risk of a doctor not showing up is too great, making such a reaction inadvisable.

On a serious note, one can’t help but have noticed the registration of an environmental assessment application with the Department of Environment by World Energy GH2. The Company proposes a US $2.65 billion wind/hydrogen project on the Port au Port Peninsula estimated to provide 100 jobs after commissioning.

The Company has applied “for the occupation of crown land” and holds out the carrot of a second and third phase. One has to wonder if local liviers have even thought about how a concentrated, even dominating, industrial presence of massive windmills, will affect their lives.

Otherwise, World Energy GH2 is as welcome as any other company provided they ready to invest on ordinary commercial terms; that is to say, following environmental approval, that they are not expecting a public handout.     

Of course, equity and risk issues are still obscure, even as the environmental review process proceeds. NLers having been “burnt” many times before, it would be wise to raise issues in relation to the development proposal now, if only to be on the alert, the Furey Administration having placed Mr. Brendan Paddick in a position of a potential conflict with the public interest.

Brendan Paddick is a Director on the Board of the Proponent, World Energy GH2.

Until recently, he was Chair of Nalcor Energy Inc., stepping down in 2020 at the request of the Premier and appointed to head a team to negotiate rate mitigation with the Federal Government. More recently, All Newfoundland, a business news web site, reported that Premier Furey appointed Mr. Paddick chair of a previously undisclosed “Churchill River Energy Analysis Team” and noted that the fact was “not publicly disclosed until this spring”, 2022.

Now Mr. Paddick, a friend and confident of the Premier, in an official capacity with the Government of NL, too, has been elevated to a position of influence with both politicians and officials at the highest level.

When the Minister of Industry states that NL is “open for business”, does Andrew Parsons mean only for those with the right pedigree? A “normal” approach to economic development assumes a level playing field for all parties. The media have confirmed that Brookfield Renewable, Pattern Energy and Shell, an oil and gas company, are interested in developing wind in the Province. It hard to see how Mr. Paddick’s association with World Energy GH2, and his GNL appointment, is not inherently destructive of the “level playing field” to which all developers – and the public – are entitled.

In that same context, it is worth asking if World Energy GH2’s early start is due to favoritism paid to that Company?

 Consider:

GNL lifted the moratorium on wind development on 5 April, 2022; the World Energy GH2 application was registered on June 21, 2022 – only two and a half months later.

The Application contains 125 pages in addition to 97 pages of appendices.

Rarely in such a short period of time is a development of this size conceived, site selected, and land surveys and investigations concluded, including those geological, geotechnical and archeological. Neither does the short time leave much opportunity for negotiations with Consultants, local and international partners.

Did the Company receive a heads up? Was the Application filed in response to the lifting of the wind power moratorium by GNL, or was the moratorium lifted in response to World Energy GH2’s expression of interest?

The Government’s Environment and Climate Change website states that the deadline for public comments on the Application is July 27, 2022 and that the Minister’s decision is due by August 5, 2022.

The Minister may, under Section 12(6) of Environmental Assessment Regulations extend the period during which the Application is under Review. The idea that any major development can proceed without Public Hearings, and that written public comments are disposed of within one week, evokes the question whether this particular Application is being “fast-tracked”.

Other concerns include whether GNL intends to commit loans or grants to the Company, and whether other commitments have been made by NL Hydro that result in a benefit via the “ratepayers”.

A member of the World Energy GH2 group has suggested that their power could be used to backstop the NL Hydro deal with Emera. Hydro has never said that the Emera deal needs support.

The public might remember that NL Hydro/Nalcor has already agreed to “backstop” 100 MW of wind on the Nova Scotia grid under an agreement called the Maritime Link Compliance Filing; it was one of the additional conditions demanded by the NS UARB to sign on to the Maritime Link without which there would be no Federal Loan Guarantee for Muskrat Falls. Ed Martin and Kathy Dunderdale would have agreed to any set of conditions at the time and did so. (See “The New Deal With Emera: What will Nalcor Think of Next“?)

Where does the gift-giving end? Is NL prepared to “backstop” other parts of the Maritime Link Agreement when the real intention might be to lower World Energy GH2’s financial risk?

Where is the Official Opposition, who have the responsibility to illuminate those issues for the public? 

Other questions come to mind in relation to the World Energy GH2 proposal: Will the NL grid also have to backstop power for the hydrogen project itself, when the wind doesn’t blow? Will World Energy GH2 be given right of access to the Maritime Link and at what price? Is the Company expecting public subsidies or other financial guarantees?

In other words, what price must we pay for World Energy GH2 to invest here?

Daft people think that only NL has windy places, and that Nova Scotia, New Brunswick and other provinces aren’t suitable?

What is NL’s competitive advantage?

Is it wind? “Wind-bags”, maybe, but not necessarily wind.

In short, the worry is that Companies like World Energy GH2 see this as a place of weak governance – correctly – one possessing a proven track record of resource giveaways, financial subsidies, and a willingness to let unwarranted investment risk fall on the public dime.  It is a situation which Premier Furey’s flat-footedness has helped perpetuate.

World Energy GH2 should know that they are welcome to the Province on ordinary commercial terms.

The public, on the other hand, in advance of extending the red carpet, should want to see if extensive Crown lands are granted absent either cost or the requirement for oyalties paid annually to the public purse, and if “subsidies” are part of the deal, too.

They will want to watch for the word “backstop” and other “long-term commitments”, with more money attached. 

And, Oh! Watch out for the claim of “commercial sensitivity”; that is modern NL Governments’ short-cut to public ignorance.

In the meantime, friends in high places wait to be served.

Please, can we save the red carpet until the public has read the fine print!

Des Sullivan
Des Sullivan
St. John's, Newfoundland and Labrador, Canada Uncle Gnarley is hosted by Des Sullivan, of St. John's. He is a businessman engaged over three decades in real estate management and development companies and in retail. He is currently a Director of Dorset Investments Limited and Donovan Holdings Limited. During his early career he served as Executive Assistant to Premier's Frank D. Moores (1975-1979) and Brian Peckford (1979-1985). He also served as a Part-Time Board Member on the Canada-Newfoundland Labrador Offshore Petroleum Board (C-NLOPB). Uncle Gnarley appears on the masthead representing serious and unambiguous positions on NL politics and public policy. Uncle Gnarley is a fiscal conservative possessing distinctly liberal values and a non-partisan persusasion. Those values and opinions underlie this writer's views on NL's politics, economy and society. Uncle Gnarley publishes Monday mornings and more often when events warrant.

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