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Friday 26 August 2011

Muskrat Falls Joint Review Report in Brief

This just in: Muskrat Falls deal "might not" be the best option!

Hardly breaking news if you read this, or any one of a multitude of blogs on Newfoundland and Labrador. But what makes this pronouncement a little different is that it comes from an independent panel mandated to study the environmental impacts of the project. For the full report go here. But be warned it's almost 400 pages so I'd suggest you boil the kettle first. To get the majority of the points in the least amount of time you could stick with the Executive Summary in the front and the list of recommendations at the back.

While the Report largely covers the potential environmental impacts (and there are MANY) there are a few very specific points worth noting. The first is captured in this quote:
However, the Panel concluded that Nalcor’s analysis, showing Muskrat Falls to be the best and least-cost way to meet domestic demand requirements, was inadequate and recommended a new, independent analysis based on economic, energy and environmental considerations. The analysis would address domestic demand projections, conservation and demand management, alternate on-Island energy sources, the role of power from Churchill Falls, Nalcor’s cost estimates and assumptions with respect to its no-Project thermal option, the possible use of offshore gas as a fuel for the Holyrood thermal generating facility, cash flow projections for Muskrat Falls, and the implications for the province’s ratepayers and regulatory systems.

So in other words there could be other ways to meet the potential electrical demand. Then Why is Government pushing Muskrat Falls so hard?

The Second point is clearly identified in this note:
Would there be net benefits to Newfoundland and Labrador?
The Panel concluded that the Project might deliver net economic benefits to the Province as a whole, depending on the results of the recommended studies regarding long-term benefits and alternatives. The residual environmental effect for Labrador would likely be adverse. Whether there would be net social and economic benefits for Labrador would depend on whether enough of the revenues generated by the Project were re-invested in Labrador.

So not only is this a project that we may not need, but we may also not get any real benefits from it. Especially if you live in the Big Land.

Sounds like a good use of $6.4 billion to me.

PS. According to the review the cost is now $6.4 billion. I guess that means the cost has gone up by $0.2 billion in about 8 months since the project was announced. Wonder what the over run will be by the time the project is complete in 6 or 7 years time?

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