Tag Archives: energy

Muskrat Falls hydroelectric – Who buried the risk assessment report?

Muskrat Falls, Labrador. Site of a proposed hydro electric project by the governments of Newfoundland and Quebec. This is downriver from the Churchill Falls Hydro project in Labrador. Photo by Greg Locke © 2017 DCS Files

Muskrat Falls on the Churchill River, Labrador in 2006 before construction of an ill-conceived hydro-electric project by the government of Newfoundland and Labrador.  Photo by Greg Locke ©2017

ROGER BILL
November 25, 2017

ST. JOHN’S, Newfoundland — The man in charge of finishing the Muskrat Falls hydroelectric project on the Churchill River in remote central Labrador calls the venture a “boondoggle”. The Newfoundland and Labrador government has established a commission of inquiry to determine why the project is wildly over budget and years behind schedule. A good place for the Commissioner, Judge Richard D. LeBlanc, to start is to find out who buried the warning that there was a “very high risk” of a multi-billion dollar cost overrun barely four months after the massive project was green-lighted in December, 2012.

 

The warning came in the form of a risk assessment undertaken by SNC-Lavalin, the engineering company retained by the Nalcor Energy, the provincial government agency managing the project. SNC-Lavalin officials, who were responsible for construction management and procurement on the project, conducted the risk assessment when initial prices for some major construction elements came in well above the original estimates in the $6.2 billion December, 2012 budget. The experts at SNC-Lavalin warned their Newfoundland client the project could go over-budget by an additional $2.4 billion. The warning was buried for four years.

 

Some critics of the Muskrat Falls project argue that warnings were ignored long before 2013but when the SNC-Lavalin risk assessment finally surfaced in June of this year it was too much to ignore and according to Newfoundland and Labrador’s premier Dwight Ball too late to put the brakes on the project

 

 According to Nalcor Energy’s CEO, Stan Marshall, the Province is now staring at a total cost of $12+ billion to bring the megaproject in two years behind schedule and the Province wants Judge LeBlanc to inquire into “any risk assessments, financial or otherwise” and whether “Nalcor took possession of the reports” and “made the government aware of the reports and assessments”

 

Judge LeBlanc will find that, yes, there was a risk assessment done by SNC-Lavalin in April, 2013 and maybe Nalcor Energy took possession of it or maybe not, and according to the provincial Minister of Natural Resources in April, 2013, no, the provincial government was not made aware of the SNC-Lavalin risk assessment.

 

Ed Martin, former president and CEO of Nalcor Energy. Photo by Greg Locke © 2017

Ed Martin, former president and CEO of Nalcor Energy. Photo by Greg Locke © 2017

What is a matter of public record is the following: Ed Martin, Nalcor Energy’s CEO, parted company with the provincial government in 2016. Whether he was dismissed or resigned is still a bit of a puzzle, but he was succeeded by Stan Marshall, a very successful executive with the private energy company, Fortis Inc. Stan Marshall says he heard about the 2013 SNC-Lavalin risk assessment from a former SNC-Lavalin engineer, but could not find a copy of it in Nalcor Energy’s files. Finally, Stan Marshall says he asked SNC-Lavalin for a copy of the risk assessment, received it, gave it to the provincial government, and it was released by the Premier and Minister of Natural Resources on June 23, 2017 (External Link to CBC story)

 

A spokesperson for SNC-Lavalin told The Telegram newspaper and www.allnewfoundlandlabrador.com that they “attempted” to hand over the risk assessment to Nalcor. Ed Martin, the former Nalcor CEO told the media the risk assessment was never “presented” to him. Premier Dwight Ball told the media that he had been advised that the risk assessment results were presented by SNC-Lavalin at a meeting attended by Nalcor officials including Ed Martin. Obviously, either Premier Dwight Ball has been poorly advised or Ed Martin is not telling the truth or the word “presented” has a very narrow and specific meaning in the world of engineers and consultants that outsiders fail to understand.

 

The expression “attempted to hand it over” makes one wonder if an official of SNC-Lavalin held the nine-page risk assessment document in their hand and reached out to give it to a Nalcor Energy official who refused to accept it. Or, maybe there was a meeting where the SNC-Lavalin, motivated by what is described in the risk assessment as a sense of “urgency” to convey their findings verbally briefed Nalcor Energy officials on the results of the risk assessment, but did not have the report in hand. When engineers are under oath and lawyers from Judge LeBlanc rather than journalists are asking questions about who told who what and who gave what to who then the people who will ultimately pay for the “boondoggle” will know who buried what.

 

What does not take any clarifying are the words of Tom Marshall, the provincial Minister of Natural Resources in 2013. When the SNC-Lavalin risk assessment surfaced in June, 2017. I asked Tom Marshall if he saw the risk assessment in 2013. He said, “I never saw that report.” Asked if he had been advised of the risk assessment findings Mr. Marshall said, “No.” Did he think Ed Martin, the Nalcor CEO who he met with regularly at the time, held back the risk assessment’s findings Mr. Marshall said, “That would be terrible. I can’t fathom if that is the case.” Would it have made a difference if he had known? “It would have rung all kinds of alarm bells”

 

Eleven months after the SNC-Lavalin risk assessment warning Tom Marshall’s successor as Minister of Natural Resources, Derrick Dalley addressed the House of Assembly to reassure members that the government’s oversight of the Muskrat Falls project was “robust.” Mr. Dalley said, “senior staff with the Department of Natural Resources and Finance have met regularly with Nalcor’s CEO and their staff. As well, the provincial cabinet has had regular meetings and ongoing reports from the CEO of Nalcor”

 

For those who gamble on political affairs the question Mr. Dalley’s assurances in 2014 raise is this; what are the odds that Judge LeBlanc will hear testimony from one single senior staff or cabinet member who met regularly with the CEO of Nalcor who will recall hearing the words, “SNC-Lavalin risk assessment” or “serious concerns” or “very high risk of cost overruns” in any of those meetings?

 

Two days later the Minister again sought to reassure the members of the House of Assembly that there was no very high risk of cost overruns, “Nobody is putting my signature on a paper that costs my children $6 billion and $7 billion into the future. I can tell you the work is done. The oversight is there” he said.

 

When the Muskrat Falls Inquiry releases its schedule of witnesses make a note of the date of Mr. Dalley’s appearance.

 

Copyright Roger Bill 2017

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Artists call for ban on fracking near national park

FAO-BonneBay_GSL8376

Gros Morne National Park and UNESCO World Heritage Site. Bonne Bay, Newfoundland, Canada. Photo by Greg Locke © 2014

Thirty two well known artists sent an open letter to Canadian Prime Minster Stephen Harper, and  Newfoundland & Labrador Premier Paul Davis, calling on them to establish a permanent buffer zone free of industrial activity around Gros Morn National Park  and UNESCO World Heritage Site on the west coast of the island of Newfoundland.

The area has been the target of many unsuccessful oil exploration attempt over the past two decades. In 2012 a number of companies proposed to conduct hydraulic fracturing (“fracking”) drilling right up to the park’s boundaries. Last summer, UNESCO called on Canada to do more to protect the site. There was much public opposition, and in 2013 the proposals failed. There is currently a moratorium on fracking while the provincial government reviews a commissioned industry study.

The artists include musician Tim Baker of Hey Rosetta, authors Lawrence Hill, Lisa Moore, Michael Crummy and Joseph Boyden, astronaut Dr. Roberta Bondar, painter Mary Pratt, and actor Greg Malone, who said, “If we can’t protect the most brilliant places in our province and in our country, what are we doing?”

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The back story behind New York’s fracking ban

Alberta Gas well

New York banned fracking after investigative journalism revealed risks. Above, a gas well in Alberta, Canada.

 

Careful, evidence-based journalism underpinned New York’s decision Wednesday to ban fracking in the state. This story by the not-for-profit investigative news room ProPublica provides the back story of the state governor’s announcement.

Fracking — the technique of fracturing underground rock by piping in hydraulically pressurized liquid  — has boosted oil and gas extraction around the world. The boom in fracking in the U.S. especially has vastly increased America’s domestic energy supply, and is a factor in the recent plunge in global oil prices. Fracking has also led to conflicts over land use, and is also linked to human health and environmental risks, and earthquakes under some conditions. 

Jurisdictions that have banned or suspended fracking include, as of this posting, several counties and municipalities in other American states; parts of Spain; France; Germany; the Netherlands; Bulgaria; and the Canadian provinces of New Brunswick and Quebec.1 Other jurisdictions have banned or regulated some of the chemicals used in fracking. 

 

by Abrahm Lustgarten, ProPublica

When natural gas companies first pressed into New York in 2008, state environmental regulators barely understood the process of “hydraulic fracturing.” On Wednesday, six and a half years after ProPublica first raised concerns that the drilling could threaten both the state’s water supply and its residents’ health, Gov. Andrew Cuomo banned the process across the state.

The ban makes New York, which holds large natural gas reserves in the Marcellus Shale, the largest and most significant region to bow out of the nation’s energy boom because of concerns that its benefits may be outweighed by the risk. 

The decision comes after a long-awaited report from the state’s Health Department this week concluded that the fracking would pose health risks to New Yorkers. It also follows an exhaustive state environmental review effort that began the day after ProPublica’s first story in July 2008.

Since then, New York has walked an indecisive line on drilling, while an energy boom provoked by advances in fracking technology took much of the rest of the country by storm. Today’s lower oil prices are due, in part, to an oil bonanza in North Dakota’s Bakken Shale that had barely begun when New York first put a temporary halt to new drilling in the state. Likewise, the gas drilling waves that have rippled through states from Pennsylvania and West Virginia to Michigan, North Carolina, Maryland, Texas and Wyoming had yet to run their course.

But by delaying a decision on drilling for so many years, Cuomo also allowed a clearer picture of the impacts and changes that drilling activity would bring to emerge. That clearer picture ultimately dampened the enthusiasm for drilling in New York and validated many of the environmental and health concerns that anti-drilling groups have raised across the country.

Just across the state line from New York’s Southern Tier, where the richest Marcellus gas deposits lie, Pennsylvania landowners dealt with one incident of water contamination after another. They complained of illnesses caused by both the water and new air pollution brought by the drilling. State regulators in Pennsylvania 2013 once enthusiastic boosters of the process 2013 wound up cracking down on drilling companies’ messy practices and strengthening their own environmental laws as a result.

Across the country, similar stories emerged, many of them reported as part of a four-year-long investigation by ProPublica. From Texas and Louisiana to California, drilling waste was being spilled or leaking into drinking water aquifers and high pressures caused by fracking activities were causing wells to leak. Methane gushed from wells and pipelines. And residents’ allegations that the drilling was causing symptoms from nerve disorders to skin lesions and birth defects began to be substantiated through peer-reviewed scientific research.

The potential payoff for such risks 2013 which the drilling industry long maintained were minimal 2013 was that drilling would bring huge economic benefits to rural regions long desperate for new jobs and an injection of economic vigor. That economic promise has been born out across many parts of the country, but in some instances, those who needed the financial benefits most have been denied them.

An investigation by ProPublica earlier this year found that landowners in Pennsylvania who supported drilling and signed leases with drilling companies in order to earn a share of the profits were instead being cheated out their payments, called royalties. In fact, the stories showed, energy companies had withheld royalty payments worth billions of dollars from both landowners and the federal government across states from Texas and Wyoming to Louisiana and Colorado, substantially blunting the prosperity that could come from allowing drilling to proceed.

All of this, it now seems, must have made Cuomo’s decision this week a lot easier. But the ban also reflects the conclusion of a lengthy learning curve for New York State.

When ProPublica reporters, in a joint project with WNYC, first went to Albany to talk with the state’s environment regulators, those officials couldn’t answer basic questions about the process they were poised to permit: What chemicals would be pumped underground near drinking water supplies? Where would the waste be disposed of and did New York have facilities capable of handling it? State officials told ProPublica then that fracking had never once caused pollution to water supplies, and said they were unaware of the hundreds of cases brought to their attention by ProPublica where such damage had indeed taken place.

On the morning of July 23, 2008, then Gov. David Paterson called for those state environment officials to go back to the drawing board in their assessment of the risks of fracking before the state issued any new permits, effectively placing a moratorium on drilling that lasted until now.

Creative Commons

Notes:

1. Wikipedia page: Hydraulic fracturing by country
     Keep Tap Water Safe organization

Further reading on F&O:

Risky Business: The facts behind fracking, F&O Magazine, by Chris Wood (subscription)

F&O NATURAL SECURITY column, by Chris Wood (subscription)

Fracking Water Contamination Feared in California Drought (ProPublica)

Aggressive Tactic on the Fracking Front (ProPublica)

Landowners often losers in deals with U.S. energy companies  (ProPublica)

Drilling for Certainty: The Latest in Fracking Health Studies (ProPublica)

Frack fluids can migrate to aquifers within years, study predicts (ProPublica)

 

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