Editor’s Note: Patrick Laracy P.Geo., holds a B.Sc. (Hons.) 1981 from Memorial University (Earth Science) and a LL.B 1988 from the University of Calgary. He has over 40 years experience working with international oil companies, crown corporations, government and independent public exploration companies in the fields of geoscience, law and business. He has worked on resource projects spanning five continents. For 10 years he practised law in St. John’s with emphasis on litigation, insurance, mining and offshore petroleum regulatory affairs. He is the founder of two Newfoundland based public-traded exploration companies.
Churchill Falls – The Latest Sequel
To use a movie analogy, the script for another Churchill River sequel is currently being written. Sequels are generally not as good as the original film. The Newfoundland and Labrador version, The Muskrat, was a complete flop. Just ask the investors (taxpayers) who will spend a generation paying off its production costs. However, Quebec, as producer of the next version, is hoping its sequel is even better than their original success.
I had a dream. A business associate of mine came up to me who has been ripping me off for years on a real estate deal. He wanted to enter a new partnership to develop a new apartment building on my land. He would build it. He would give me some rent, but at a rate significantly below market value. After all “it was his idea” and he needed to get his investment back as soon as possible before I could get a larger share of the rent, albeit still below market value. To add further insult, the rent would be set according to a complicated formula that he could manipulate. ”These were just details that needed to be worked out.” My response was simple. Pay me the fair share of the money you have been ripping me off over the years and then we can talk. If not, I will solicit other potential partners for the project.
This should have been the context for the Churchill River MOU conversation. However, based on the events we have seen and the “trust me” attitude of Hydro-Quebec, the MOU appears to short-change our interests and bargaining power. We are being offered a small piece of a very succulent pie. How can we be satisfied with this outcome. How can we not solicit other parties and proposals for the Churchill opportunity. The process is mind boggling to me.
I don’t blame Hydro-Quebec for looking out for their best interests. I am not convinced that our side understands our best interests. They may honestly believe they do. But many knowledgeable commentators who have analyzed the MOU in detail suggest it simply doesn’t represent the best possible deal. They cannot be ignored and casts serious doubt on the credibility of the MOU. Don’t forget that the forces pushing this MOU are the same forces that brought us the Muskrat Falls boondoggle. Parties to the MOU and their proxies simply cannot be relied upon as independent and unbiased sources to evaluate the merits of their own deal.
We can’t let the Muskrat experience demoralize us and gut our confidence to do better. We can’t let this be the legacy of Muskrat, a fate worst than its financial mess that will require generations to cleanup. Remember your power bill from last winter, it will only continue to go up.
This is not about politics. This is about the long-term economic viability of the province and the exercise of our democratic right to express an opinion and act on it. We can do better. We have the bargaining power, lets use it.
Scrap the MOU before it turns into another horror flick.