Enbridge & Churchill Falls

[August1991]

The B.C. government wants to renegotiate a "fair share" of the benefits from Enbridge's Northern Gateway Project as one of five new requirements all new pipeline projects will be required to meet for provincial approval.

Under the current terms, Environment Minister Terry Lake said, British Columbia would get only eight per cent of the pipeline revenue while assuming 100 per cent of the marine risk for the port terminal and tanker traffic on the West Coast, and 58 per cent of the land-based risk for the pipeline.

"We do not feel the current approach to sharing these benefits is appropriate," Lake said Monday in Vancouver.

CBC

If you own a diamond mine on the Moon, what do you have? Are you "rich"?

Without a way to bring the diamonds to the Earth, you simply have a diamond mine on the Moon.

-----

By accident of nature, the Newfoundland government can claim that it owns a wonderful hydro-electric resource in Labrador. But what is the wonderful resource? Is it Churchill Falls, or the ability to bring the benefit to others?

Christy Clark (and Barack Obama) have sort-of answered that question better than I have ever been able to argue here on this forum.

If there is no way to deliver oil from the oil sands in Fort McMurray to consumers elsewhere, than the Albertan government owns "diamonds on the moon".

I think the confusion stems from a naive belief that the rare resource is the oil, or the diamonds. In fact, the "rare resource" in these cases is the "ability to deliver to market".

In the 1960s, foreign bankers understood this clearly and only agreed to finance the construction of a hydro dam at the Churchill Falls once Quebec agreed to transport the electricity across its territory.

Christy Clark (and the BC government) will no doubt play a similar card in Albertan oil sands/pipeline development.

-----

By chance, Labrador has hydro potential and Alberta has oil sands. And by chance, Quebec and BC are placed where they are. So, who truly won the lottery ticket?

[blueblood]

Well if those lefist provinces keep up their extortion scheme nwt and nova scotia are going to be winning that little war down the road.

Stupid is as stupid does.

Edited August 15, 2012 by Charles Anthony
removed entire Opening Post quoted in reply

[August1991]

Well if those lefist provinces keep up their extortion scheme nwt and nova scotia are going to be winning that little war down the road.

Extortion scheme?

The extortion scheme to me seems the claims of Edmonton/St. John's politicians: the chance geology of Labrador's Churchill Falls and Fort McMurray's Oil Sands. The politicians in Edmonton/St. John's believe that they can extort everyone else. Like the Saudis do.

---

But Blueblood, here's a better question - that you apparently missed about extortion: If you're a cosmetic/dental surgeon, meet a young man on Hollywood Blvd and explain that you can "make" him into the next Tom Cruise, who owns the "rare resource" of his stardom if he succeeds? You, or the young man?

IOW, Alberta may look tight - but without cute teeth, it's nobody.

Edited August 15, 2012 by August1991

[waldo]

Well if those lefist provinces keep up their extortion scheme nwt and nova scotia are going to be winning that little war down the road.

Stupid is as stupid does.

ah yes... you keep mentioning NWT. Care to actually follow-up on the practicalities of NWT's Premier Bob McLeod spouting off about an alternate NWT pipeline route up to the Arctic Ocean... any, uhhh... technical issues there, any similar environmental concerns over oil tanker passage... any concerns the U.S./Alaska might have... . Any reason why NWT's McLeod, almost immediately, has started walking back his off-the-cuff musings?

[TimG]

By accident of nature, the Newfoundland government can claim that it owns a wonderful hydro-electric resource in Labrador. But what is the wonderful resource? Is it Churchill Falls, or the ability to bring the benefit to others?

Do you believe in free trade or not? If you don't believe in free trade the charging for the passage of goods is fair game. If BC wants to extort money from Alberta to allow goods to flow to the coast then Alberta can respond by blocking all trains and truck access to BC ports. Do you really believe this is reasonable? I think you are simply engaging in the hypocritical logic of anti-free traders everywhere that assume that they can block trade when it benefits them but get upset when others respond in kind.

i.e. how would Quebec feel if Vermont started to demand tolls for power lines that allow the sale of power to New York? Would that be reasonable in your view of the world?

Edited August 15, 2012 by TimG

[Wild Bill]

By accident of nature, the Newfoundland government can claim that it owns a wonderful hydro-electric resource in Labrador. But what is the wonderful resource? Is it Churchill Falls, or the ability to bring the benefit to others?

I thought we flogged this one to death before, August. For some reason, you seem to desperately seize any chance to paint Quebec in a better light for the Churchill Falls deal.

Your premise is valid but only in an academic sense. Certainly Quebec is entitled to some of the pie for transmission lines across its territory, but that has never been disputed. The problem is the sheer immensity of the cut for Quebec compared to Newfoundland where the power was generated!

Newfoundland gets a nickel and Quebec gets 95 cents, for decades and decades! THAT'S why there has been hard feelings!

What's more, it's not as if it was a simple case of caveat emptor. Federal pressure was used to make Newfoundland accept the deal.

Whatever, even if everyone woke up tomorrow and said "OH! We've been wrong all these years. Certainly Quebec was always entitled to 95% of the pie! It was simply business!" it doesn't change the fact that Newfoundland now feels that cables to Nova Scotia are much more competitive as a route to bring power to market.

If Quebec is not competitive then too bad! That too is just business!

[Newfoundlander]

This comparison doesn't really make much sense really. The better comparison is what has gone on in recent years with Quebec not allowing Newfoundland and Labrador to transmit power through their province with Lower Churchill power.

[blueblood]

ah yes... you keep mentioning NWT. Care to actually follow-up on the practicalities of NWT's Premier Bob McLeod spouting off about an alternate NWT pipeline route up to the Arctic Ocean... any, uhhh... technical issues there, any similar environmental concerns over oil tanker passage... any concerns the U.S./Alaska might have... . Any reason why NWT's McLeod, almost immediately, has started walking back his off-the-cuff musings?

I suggest you look at Jaccard's projection chart on worldwide future energy usage, its really quite simple; no oil, no western lifestyle. In other words instead of getting your mom to drive you to futureshop like normal, you'll have to walk to whatever else replaces it because no oil also means no futureshop.

[August1991]

If BC wants to extort money from Alberta to allow goods to flow to the coast then Alberta can respond by blocking all trains and truck access to BC ports.

IOW, BC is providing a valuable service by transporting a good from point A to point B.

As I argue, if you own a diamond mine on the Moon, you may think that you are rich but without a transportation service to bring the diamonds to Earth, you have bupkis.

The valuable commodity is not the diamond mine but rather the transportation service.

As to free market, it's not free. Quebec has a monopoly on the transport of electricity out of Labrador and BC, apparently, has a monopoly on the transport of oil out of Alberta.

But then, Churchill Falls and the oil sands are something of monopolies too. Tom Cruise may be something of a monopoly but then so is his dental surgeon. Pot, meet kettle.

This comparison doesn't really make much sense really. The better comparison is what has gone on in recent years with Quebec not allowing Newfoundland and Labrador to transmit power through their province with Lower Churchill power.

Huh? Edited August 16, 2012 by August1991

[Newfoundlander]

Huh?

Care to elaborate?

[TimG]

IOW, BC is providing a valuable service by transporting a good from point A to point B.

BC is providing no services. A private company would build and operate the pipeline. By your logic the US is providing a valuable service by allowing Canadian goods into the country. Perhaps you think the US should start charging for the privilege of selling into their market?

Bottom line is there is absolutely no difference between a tariff on goods flowing through a territory and tariffs on goods entering a territory. If you think tariffs on goods entering a country and wrong then you cannot rationally claim that tariffs on goods flowing through a territory are fair. Even if you don't think tariffs are wrong you should recognize that tariffs are usually met with retaliatory tariffs designed to hurt the territory imposing the original tariffs.

You have also not answered by question. What if Vermont decided to start charging Quebec Hydro for the transport of electricity to New York? I suspect your so called 'principal' is based on the premise that the territories that Quebec has to cross are kind enough to let Quebec Hydro do it for free. Why should they be so generous if Quebec is keen on screwing Newfoundland?

Edited August 16, 2012 by TimG

[waldo]

Well if those lefist provinces keep up their extortion scheme nwt and nova scotia are going to be winning that little war down the road.

Stupid is as stupid does.

ah yes... you keep mentioning NWT. Care to actually follow-up on the practicalities of NWT's Premier Bob McLeod spouting off about an alternate NWT pipeline route up to the Arctic Ocean... any, uhhh... technical issues there, any similar environmental concerns over oil tanker passage... any concerns the U.S./Alaska might have... . Any reason why NWT's McLeod, almost immediately, has started walking back his off-the-cuff musings?

I suggest you look at Jaccard's projection chart on worldwide future energy usage, its really quite simple; no oil, no western lifestyle. In other words instead of getting your mom to drive you to futureshop like normal, you'll have to walk to whatever else replaces it because no oil also means no futureshop.

so... you reply without addressing the direct challenge to you concerning practicalities of an alternate NWT pipeline route to the Arctic Ocean - a NWT pipeline reference you keep bringing forward. Your childish, 'mom driving Futureshop', idiocy simply highlights your deflection and inability to address the challenge.

in any case, I'd suggest the next time you decide to name drop, you spend a bit of time on understanding just who you presume to reference. If you're going to name drop Mark Jaccard, someone who's statements and positions are leveraged on many accounts, from opposing sides, you may want to preface your attempted leverage with the over-riding positions Jaccard holds on energy sustainability amidst a continued... and diminishing... reliance on fossil-fuels towards that sustainable future - a reliance and progressively diminished use that presumes on full deployment of carbon capture technologies... notwithstanding his emphasis on GHG emission reduction climate policies that include strong emissions pricing and regulations.

[blueblood]

[/size]

so... you reply without addressing the direct challenge to you concerning practicalities of an alternate NWT pipeline route to the Arctic Ocean - a NWT pipeline reference you keep bringing forward. Your childish, 'mom driving Futureshop', idiocy simply highlights your deflection and inability to address the challenge.

in any case, I'd suggest the next time you decide to name drop, you spend a bit of time on understanding just who you presume to reference. If you're going to name drop Mark Jaccard, someone who's statements and positions are leveraged on many accounts, from opposing sides, you may want to preface your attempted leverage with the over-riding positions Jaccard holds on energy sustainability amidst a continued... and diminishing... reliance on fossil-fuels towards that sustainable future - a reliance and progressively diminished use that presumes on full deployment of carbon capture technologies... notwithstanding his emphasis on GHG emission reduction climate policies that include strong emissions pricing and regulations.

Really, because from what I get out of it is that you still need fossil fuels and given that worldwide energy consumption is projected to rise by 2 percent per year. The nwt premier sees the opportunity to facilitate the need to supply that demand, why can't you.

So what do you propose we do without killing our economy to supply an approximate 2 percent growth in energy demand per year?

Or is it waldo's mom gets to drive waldo everywhere and buy waldo all the products that involve oil/byproducts he wants while people in china, india, and brazil go back to living like peasants so the environment is saved? Let's see how that goes over.

[waldo]

Really, because from what I get out of it is that you still need fossil fuels and given that worldwide energy consumption is projected to rise by 2 percent per year. The nwt premier sees the opportunity to facilitate the need to supply that demand, why can't you.

So what do you propose we do without killing our economy to supply an approximate 2 percent growth in energy demand per year?

Or is it waldo's mom gets to drive waldo everywhere and buy waldo all the products that involve oil/byproducts he wants while people in china, india, and brazil go back to living like peasants so the environment is saved? Let's see how that goes over.

hey now - you've been on this board for 6+ years and you still can't figure out how to use quotes and the preview feature, hey?

perhaps you should review your false narrative that paints an overall rejection of fossil-fuels. And while you're doing that, and again mentioning the NWT... have a go at the practicalities of an alternate NWT pipeline route and related tanker passage route - you know, the thing you're avoiding. As you again mention the NWT premier, why not also address the point I made about NWT's Premier Bob McLeod starting to 'walk back' his earlier musings - sure you can, hey?

if you can't step it up beyond your continued juvenile references to "waldo's mom driving", why should one give your ignorance any further consideration?

[blueblood]

hey now - you've been on this board for 6+ years and you still can't figure out how to use quotes and the preview feature, hey?

perhaps you should review your false narrative that paints an overall rejection of fossil-fuels. And while you're doing that, and again mentioning the NWT... have a go at the practicalities of an alternate NWT pipeline route and related tanker passage route - you know, the thing you're avoiding. As you again mention the NWT premier, why not also address the point I made about NWT's Premier Bob McLeod starting to 'walk back' his earlier musings - sure you can, hey?

if you can't step it up beyond your continued juvenile references to "waldo's mom driving", why should one give your ignorance any further consideration?

I could care less if I know how to use ticky tack quotes and preview features. If that's your burn, bravo

Not my problem the nwt premier has a good idea that means wealth creation and jobs. And with energy consumption growing at 2 percent per year, its a no brainer.

But your one of those who already has theirs (or should I say parents have theirs) and states that others should have a less standard of living for your cause. Bravo!

[August1991]

Care to elaborate?

You questioned the comparison and then you made it.

Alberta is asking BC to allow transport of its oil. Just like Newfoundland asked Quebec to transport its electricity.

Hence my "huh?"

Newfoundlander, the people of Newfoundland have never quite understood that Churchill Falls is in Labrador, on the dark side of the moon. It's a wonderful resource but without access to a market, it is just water between glacial rocks. The key resource, worthy of market return, is not the glacial rock formation but access to market. Quebec owns the key resource, not Newfoundland.

Thanks to Obama, the BC government is now in effect saying the same to the Alberta government.

[August1991]

BC is providing no services. A private company would build and operate the pipeline.

But the BC government (and its taxpayers) will allow any private firm to build the pipeline. But the BC government (and its taxpayers) own the key resource.

Here's an idea, TimG. Maybe the BC government should sell in auction to the highest bidder the right to transport Albertan oil sands product to the Pacific coast.

Bottom line is there is absolutely no difference between a tariff on goods flowing through a territory and tariffs on goods entering a territory.

There's a huge difference.

For example, Panama's balance of payments are about 900% of its GDP - its exports/imports far exceed its home production. Panama has low tariffs - low taxes on stuff that stays in Panama - but it charges alot for the through traffic.

TimG, by your logic, you would let ships take JapCrap to US East Coast Best Buys through the Panama Canal without cost/fee because Panama "is providing no services".

PS. I made up that 900% statistic but it's probably an underestimate.

Edited August 17, 2012 by August1991

[TimG]

But the BC government (and its taxpayers) will allow any private firm to build the pipeline.

You completely evaded my argument: the US provides the same "service" by allowing Canadian goods to be shipped to the US. If you argue that BC has a right to charge for the 'service' of providing passage of goods then you are arguing the US has a right to charge for "service" of access to the US market.

There's a huge difference.

No there is not. You completely evaded by other point: are you really arguing that Vermont should be charging Quebec a tariff to allow passage of its electricity to New York? Or are you simply a hypocrite that only argues in favour of tariffs when it benefits or makes no difference to you?

I would also like an answer to my last point: reciprocity. Every state depends on free trade today and no state can afford to adopt protectionist policies because that means their trading partners will respond in kind. i.e. BC could try to charge tariffs for the passage of oil but Alberta could then charge tariffs for the passage of trucks and trains that supply BC's ports. It is unlikely that BC would come out further ahead.

Given that context why do you think BC could possibly derive a net benefit from a tariff on oil transport?

Edited August 17, 2012 by TimG

[waldo]

perhaps you should review your false narrative that paints an overall rejection of fossil-fuels. And while you're doing that, and again mentioning the NWT... have a go at the practicalities of an alternate NWT pipeline route and related tanker passage route - you know, the thing you're avoiding. As you again mention the NWT premier, why not also address the point I made about NWT's Premier Bob McLeod starting to 'walk back' his earlier musings - sure you can, hey?

Not my problem the nwt premier has a good idea that means wealth creation and jobs. And with energy consumption growing at 2 percent per year, its a no brainer.

yup... it's such a "blueblood good idea"... that you won't touch the challenge to speak to the practicalities of your "good idea". Or accept/realize the NWT Premier's early 'enthusiasm' has somewhat dampened, hey? Wonder why, hey?... since it's such a "blueblood good idea"... a "blueblood no brainer"!

if you can't step it up beyond your continued juvenile references to "waldo's mom driving", why should one give your ignorance any further consideration?

But your one of those who already has theirs (or should I say parents have theirs) and states that others should have a less standard of living for your cause. Bravo!

is this you... "stepping it up"?

[waldo]

No there is not. You completely evaded by other point: are really arguing that Vermont should be charging Quebec a tariff to allow passage of its electricity to New York? Or are you simply a hypocrite that only argues in favour of tariffs when it benefits or makes no difference to you?

crikey! At least come up with a legitimate hypothetical. Quebec sells directly to New York... and... there are significant over-riding agreements that control/manage the overall grid, such that your hypothetical wouldn't occur, regardless. Apparently, those massive eastern/NYC blackouts got governments attention.

[August1991]

You completely evaded my argument: the US provides the same "service" by allowing Canadian goods to be shipped to the US. If you argue that BC has a right to charge for the 'service' of providing passage of goods then you are arguing against free trade.

Canadian goods go to the US, for US citizens. Your argument would make sense if most of our goods travelled to Mexico, through the US.

You completely evaded by other point: are really arguing that Vermont should be charging Quebec a tariff to allow passage of its electricity to New York? Or are you simply a hypocrite that only argues in favour of tariffs when it benefits or makes no difference to you?

In fact, Vermont (and New Hampshire) do precisely as you say. (Quebec also has a border with NY. The problem is with electricity sales to the lucrative Boston market.) The US Constitution helpfully restricts the monopoly power of individual states in interstate trade. It's called the Tenth Amendment.

I would also like an answer to my last point: reciprocity. Every state depends on free trade today and no state can afford to adopt protectionist policies because that means their trading partners will respond in kind. i.e. BC could try to charge tariffs for the passage of oil but Alberta could then charge tariffs for the passage of trucks and trains that supply BC's ports. It is unlikely that BC would come out further ahead.

I think that you have this all wrong.

Quebec is a monopolist in the world production of maple syrup. Of course, it acts like OPEC. But unless you're Quebec in the maple syrup market or OPEC, it makes no sense to impose rules.

Reciprocity? If you hit your head with a hammer, why should I do the same?

Edited August 17, 2012 by August1991

[TimG]

Canadian goods go to the US, for US citizens. Your argument would make sense if most of our goods travelled to Mexico, through the US.

There is NO difference. Please explain why the "service" of allowing access to a market is different is any material way from the "service" of allowing transit of goods through a territory. You are trying to pretend there is a difference because you want to prop up a bad argument.

The US Constitution helpfully restricts the monopoly power of individual states in interstate trade. It's called the Tenth Amendment.

Canada has the same restrictions. BC has no legal right to block the pipeline nor to charge tariffs. But by conceding that Quebec benefits because the US constitution limits power of Vermont and other states to collect tariffs on Quebec electricity you have proven that you are a hypocrite. You want to benefit from tariffs but are happy that others cannot do the same to Quebec.

Reciprocity? If you hit your head with a hammer, why should I do the same?

More like I don't punch you in your face because I don't want you to punch me back. Edited August 17, 2012 by TimG

[August1991]

There is NO difference. Please explain why the "service" of allow access to a market is different is any material way from the "service" of allowing transit of goods through a territory. You are trying to pretend there is a difference because you want to prop up a bad argument.

OK, you're right. There's no difference.

Except I'm a politician in a democracy and I have to raise tax revenues. Guess how I choose to finance the budget. 1) I can tax my voters. 2) I can tax stuff travelling through my country that my voters don't see/buy/care about.

Now then, TimG, this obvious democratic vote difference should make you think about the broader difference; and there is one. (Hint: How do we value something? Is oil in Alberta any more valuable than its transport to Japan?)

BC has no legal right to block the pipeline nor to charge tariffs.

I think that the BNA Act contradicts you.

More like I don't punch you in your face because I don't want you to punch me back.

TimG, that's the demagogue's version of a trade war. In fact, a trade war is: "I'll stop hitting my kids/beating my wife when you stop hitting yours."

Canada should be open to trade, and Canadian men should stop beating their wives, regardless of how other countries impose tariffs on Canadian goods, or how foreign men treat their women. If foreign men beat their wives, that's no reason for Canadian men to do the same.

TimG, I fundamentally disagree with your idea of "reciprocity".

Edited August 17, 2012 by August1991

[blueblood]

OK, you're right. There's no difference.

Except I'm a politician in a democracy and I have to raise tax revenues. Guess how I choose to finance the budget. 1) I can tax my voters. 2) I can tax stuff travelling through my country that my voters don't see/buy/care about.

Now then, TimG, this obvious democratic vote difference should make you think about the broader difference; and there is one. (Hint: How do we value something?)

I think that the BNA Act contradicts you.

TimG, that's the demagogue's version of a trade war. In fact, a trade war is: "I'll stop hitting my kids when you stop hitting yours."

Its been clarified that the feds can trump bc as to where the pipeline goes. Since SK and AB directly gain and ontario through its financial sector also benefits, the feds can press the pipeline through.

However harper probably won't do that and can instead look to the territories to do that. No billions for bc. Jobs for nwt, and more money for the economy.

As for quebec, their incompetant fools just made running a giant ass cable under the ocean economically feasible. Looks like they're milking a dry cow. I wonder how marois is going to explain to quebecers if they get independance why nfld just turned the lights out.

[waldo]

However harper probably won't do that and can instead look to the territories to do that. No billions for bc. Jobs for nwt, and more money for the economy.

about those practicalities of both the pipeline and tanker routes... the practicalities you simply refuse to address/engage upon. Is there a problem you won't... you can't... speak to those practical aspects, hey?