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Mining Power Issues

Soaring energy prices making Ontario look dim for manufacturers – by Adam Radwanski (Globe and Mail – March 19, 2014)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

For businesses in Brockville, the attempt to lure them over the border wasn’t new. But the pitch was. Earlier this winter, manufacturers in the Eastern Ontario community received a letter reminding them that their province’s industrial electricity rates were projected to rise by 33 per cent over the next five years, and 55 per cent by 2032.

“As a hedge against these increases,” it suggested, “setting up an operation just across the border in St. Lawrence County, New York, may be a competitive strategy you should consider.”

Such overtures, if not in written form then made more casually, are becoming increasingly common in Ontario. While they may not find immediate takers, they are emblematic of the mounting economic threat from an energy-cost trajectory that – following a series of questionable policy decisions – the province now seems powerless to do much about.

Owing mostly to a combination of overdue investments in infrastructure, phasing out coal and an ill-fated gamble on green energy, soaring power rates have already greatly increased the cost of doing business in Ontario.

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Ontario’s big industries plead for lower hydro rates – by John Spears (Toronto Star – February 26, 2014)

The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

Province’s industries pay highest electricity rates in North America, says survey by big power consumers.

Ontario industries pay more for electricity than their competitors elsewhere in North America, according to a survey by Ontario’s biggest power users. That’s creating a growing risk of industries and jobs bypassing Ontario for lower-cost jurisdictions, says the Association of Major Power Consumers of Ontario (AMPCO).

The survey was to be posted on AMPCO’s website Wednesday. http://www.ampco.org/  Ontario industries pay 7.6 cents to 9.4 cents a kilowatt hour for electricity, according to the survey, based on 2012 power prices.

That’s higher than big U.S. jurisdictions, where the price at the time of the survey averaged 5.6 cents a kilowatt hour in New York, 5.4 cents in six New England states, 4.5 cents in 14 jurisdictions clustered around Pennsylvania-New Jersey-Maryland, and 3.2 cents in a group of 15 midwestern states. (All prices in Canadian dollars.)

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Is Hudak’s ‘million jobs’ plan the economic shock Ontario needs? – by Christina Blizzard (Toronto Sun – February 23, 2014)

http://www.ottawasun.com/home

TORONTO – A million jobs: Is it myth or miracle. That’s the question PC leader Tim Hudak was asked as he introduced his “Million Jobs Act” in the legislature last week.

I posed that question to economists.The province’s manufacturing sector is dying. We’ve lost 300,000 jobs over the last 10 years. Big companies such as Heinz and Kelloggs are pulling out daily. University of Calgary Professor Jack Mintz said he’s not sure public policy alone will create a million jobs. Other factors, such as the world economy, play a big part.

Mintz figures this province needs a kick start.“I think Ontario needs a shock in the positive sense. It’s dragging. It needs a serious look at the restructured role it’s going to have,” he said. “I think he (Hudak) has the right focus, which is to say,’ How can we get more economic growth and more jobs?’

“Whether he can create a million jobs or not is another story,” he added. Hudak’s plan to get energy costs under control makes sense, Mintz said. “I think the energy file is in a mess in Ontario and needs to be fixed. It’s going in the wrong direction right now and it’s going to make Ontario very uncompetitive,” he said.

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Quebec v. Labrador: natives and the hydropower sweepstakes – by Bill Gallagher (First Perspective – February 6, 2014)

http://www.firstperspective.ca/

In my book, “Resource Rulers: Fortune and Folly on Canada’s Road to Resources”, I posit that Quebec had already won a 10-year head start over Newfoundland & Labrador in the hydropower race to North American energy markets. Quebec’s strategic power-surge was cemented by the ‘Paix des Braves’ in 2002; universally regarded as a pivotal resource management legal arrangement that fully recognized the Crees as ‘Resource Rulers’ within their vast homeland containing the watersheds.

Conversely, Newfoundland, at the same time, was finally rebounding on its troubled Voisey’s Bay mining project; yet it was soon to find itself back in court fighting the Labrador Metis Nation and losing to them at the appellate level. In fact, the province had earlier lost at the appellate level to the Innu Nation on the Voisey’s Bay project; which loss had instigated a project shut down and stock drop (similar to what is playing out today in the Ring of Fire with Cliffs Natural Resources – in what is fast becoming an almost unbelievable case of history repeats!)

To no-one’s surprise, the announcement of the Muskrat Falls hydropower project in 2011 landed in an unsettled and charged Labrador native empowerment landscape. Both the Labrador Metis Nation (now called NunatuKavut) and the Nunatsiavut Government, launched repeated and sustained press releases and legal maneuvers to persuade the province and its crown utility (Nalcor) to address the pending impacts on their traditional lands.

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Poo, power, profits and the cult of green investment – by Terence Corcoran (National Post – February 6, 2014)

The National Post is Canada’s second largest national paper.

From Toronto’s zoo poo bonds the World Bank’s fossil fuel divestment plan to green bonds and Muscrat Falls, green investment is uneconomic

At the high-powered World Economic Forum meeting in Davos last week, the head of the World Bank, Jim Yong Kim, called on the world’s top investors and pension funds to “divest” their fossil fuel stocks and bonds and move cash into green technologies. Canada contributes more than $400-million a year to the World Bank and holds 2.43% voting power: Was that voting power cast in favour of Mr. Kim’s “get out of oil and gas” campaign, in contradiction to the Canadian government’s hunger for fossil fuel expansion and investment?

Not that it matters. The World Bank’s anti-fossil fuel effort, and its specific endorsement of the burgeoning international movement to promote fossil fuel divestment, is part of a globe-spanning effort that encompasses a vast range of initiatives.

Canada is a leader in the field, with many projects underway. These range from the growing issuance of Green Bonds to the building of giant multi-billion-dollar so-called green energy projects.

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How the Polar Vortex revealed the hubris in Newfoundland’s leadership – by Konrad Yakabuski (Globe and Mail – January 9, 2014)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

Mother Nature just forced two of Canada’s premiers to show what they’re made of, after winter storms left thousands of their citizens without electricity.

Ontario’s Kathleen Wynne was sugar, spice and everything nice, delivering groceries and feeling everyone’s pain. Even when she bungled a gift-card distribution to the powerless, she showed that her heart was in the right place.

Newfoundland and Labrador’s Kathy Dunderdale, however, seemed to lead her province through the outages with neither heart nor head. With most of the Rock in the dark, she dismissed the situation as a non-crisis that underscored the wisdom of her government’s controversial Muskrat Falls hydroelectric project. “Would I have done things differently? Absolutely not,” she insisted after power was mostly restored.

Newfoundland premiers have rarely been known for humility, and Ms. Dunderdale seems to be keeping the tradition alive. But her self-assurance is misplaced.

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Better linking Canada’s grid – by Nicholas Fedorkiw (Prince George Citizen – January 7, 2014)

http://www.princegeorgecitizen.com/section/princegeorge

One theme I have written about before is the need for more interprovincial trade in electricity. The benefits of free trade in general are embraced by most these days. However, for a variety of reasons, electricity is the one sector of the economy that has least benefited from free trade, even within Canada.

Hopefully that’s about to change. There is a movement afoot in central Canada to use Manitoba’s clean hydro power to supply industrial mining and oil and gas development in northern Ontario, Saskatchewan, and even Alberta. There are some definite lessons for B.C. here, as well as the whole country.

Like B.C., Manitoba is powered by large scale hydroelectric power. Also, like B.C., they are surrounded by areas that need a lot of electricity to fuel their economy. Ontario’s “Ring of Fire”; an area of proposed mining development is probably most significant. Not only do mines consume a lot of electricity, but the mines of northern Ontario are actually closer to the power generation centres of Manitoba than of Ontario’s which are focused in southern Ontario.

Looking west, the oil and gas growth in Alberta and Saskatchewan is another target market for Manitoba’s power. In this case, its the carbon free nature of Manitoba’s power that has value in the otherwise carbon intensive economies of these western provinces.

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How long does Ontario need to turn around OPG? – by Konrad Yakabuski (Globe and Mail – December 12, 2013)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

How long should it take to turn the Titanic around? Is five years a reasonable amount of time to allow for the transformation of a bloated and poorly run government-owned utility into a disciplined, high-performing one? Surely 10 years should be enough?

A decade ago, Ontario’s newly appointed energy minister promised to fix the mess at Ontario Power Generation. Dwight Duncan vowed to end to the years of “indecision and ideology” that had hamstrung electricity policy under the Progressive Conservatives and New Democrats. Job One was ending the excesses at OPG.

Mr. Duncan hired a bank chairman and two former federal cabinet ministers to examine the utility that managed a motley stable of publicly owned energy assets, including the Adam Beck hydroelectric station at Niagara Falls that once made Ontario an energy leader and the problem-plagued fleet of nuclear reactors, which had become the bane of Mr. Duncan’s predecessors and saddled power consumers with the utility’s atomic-sized debt.

The group led by former Liberal minister John Manley, former Tory minister Jake Epp and Bank of Nova Scotia chairman Peter Godsoe, sized up their task:

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Corporate excess tops radioactive waste at OPG – by Martin Regg Cohn (Toronto Star – December 12, 2013)

The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

Why did OPG bosses overpay themselves while overcharging electricity ratepayers and impoverishing OPG’s sole shareholder — us?

Sweetheart hirings, obscene pensions, bloated bonuses, skyrocketing salaries: You don’t need to be a rocket scientist — or an auditor — to know the numbers don’t add up at OPG.

Surely a nuclear engineer could do the math? Like Tom Mitchell, the handsomely paid CEO of Ontario Power Generation?
Mitchell’s a smart guy who doesn’t count with his fingers, but it’s hard to wag your finger at overpaid staff when you’re pocketing $1.7 million in a good year.

But where was OPG’s board of directors, who are supposed to oversee work flow, supervise cash flow and superimpose core values? You don’t have to be a right-thinking, God-fearing apostle to know something smelled rotten in the boardroom.

Surely an old Tory, proud of his Mennonite heritage, could see through the lack of thrift? Like Jake Epp, the chairman of the board at OPG?

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China’s solar bubble bursting – by Ezra Levant (Toronto Sun – December 11, 2013)

http://www.torontosun.com/home

When Justin Trudeau said he admired China more than any other foreign country “because of their basic dictatorship,” it was a shock and a reminder that most Canadians know nothing of Trudeau’s policy beliefs.

By praising China’s government — specifically its dictatorship, not its people or its history or culture — Trudeau showed how outside the mainstream he is, and how cavalier when it comes to human rights. Trudeau lacks his father’s intellectual curiosity or accomplishment, but he seems to have inherited his father’s worst trait — an affection for totalitarian strongmen from Moscow to Beijing to Havana.

But Justin Trudeau made a second comment that received less attention. China’s “basic dictatorship is allowing them to actually turn their economy around on a dime and say we need to go green, we need to start, you know, investing in solar.” To Trudeau, China’s brutality is offset by the fact that they are “investing in solar.” As in solar panels.

Pierre Trudeau passed away in 2000, so this solar idea isn’t likely something Justin got from him. More likely it’s from Trudeau’s surrogate father — his campaign strategist, chief organizer and policy guru, Gerald Butts. Butts is Trudeau’s age, but much more grown up. And he’s an environmental extremist.

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Ontario driving jobs out with Blue Boxes, green energy – by Terence Corcoran (National Post – December 10, 2013)

The National Post is Canada’s second largest national paper.

Slowly but surely, Blue Boxes and green energy are driving red tomatoes out of the province

Did the blue box help kill Ontario’s red tomato? Certainly not by itself, but when Heinz announced last month that it was shutting its century-old ketchup-making plant in Leamington, Ontario, the U.S. food maker had already warned against a new provincial government plan to impose major new waste reduction fees on industry.

In a letter to the government in August, Heinz said, among other things, that the proposed massive overhaul of the province’s Blue Box program failed to consider the “impact the new framework could have on the Ontario economy.” The Heinz letter was part of major alarm-ringing exercise from Food and Consumer Products of Canada (FCPC) against Ontario Environment Minister Bill Bradley’s scheme to upload hundreds of millions of dollars in recycling costs onto industry.

Industry currently pays $104-million in “steward fees” to cover 50% of the cost of the province’s pioneering imposition, two decades ago, of a bass-ackward recycling regime. Now the province wants to upload all the costs, a burden the food industry says could boost the cost of the waste regime to $231-million.

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Province confirms, but mum, on special rate for Ring – by Darren MacDonald (Sudbury Northern Life – December 09, 2013)

http://www.northernlife.ca/

Energy minister says $60B chromite project exempt from new rate hike

Ontario Energy Minister Bob Chiarelli confirmed in a conference call with reporters last week what many people had long assumed: the province has offered Cliffs Natural Resources a special hydro rate for its Ring of Fire project.

Chiarelli was promoting the province’s long-term energy plan, entitled Achieving Balance, which forecasts energy demand in Ontario for the next 20 years. Steep hikes are forecast for the first three years of the plan – 33 per cent – but he said the increases are much lower than they would have been if the province hadn’t cancelled proposed gas plants and plans to build new nuclear plants.

He also touted the end of “dirty” coal plants, which he said cost the province $4.4 billion in added health-care costs, as well as polluting the environment.

But the rate increases announced as part of the plan mean Ontarians will pay about $40 a month more for energy by 2016. When asked about the implications for Cliffs, Chiarelli said a separate arrangement had already been struck.

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Way ahead for North is east or west of us – by Karl Lehto (Thunder Bay Chronicle-Journal – December 7, 2013)

Thunder Bay Chronicle-Journal is the daily newspaper of Northwestern Ontario.

Two articles in the past few days in this newspaper and a Sunday morning Global Television clip concerning the Ring of Fire are in serious need of comment:

1. The Nov. 30 Viewpoint, NWO Prime For Manitoba Power, could be the surprising game changer for Northern Ontario and the entire province.

For years, many have advocated the possibility of importing cheap, green hydroelectric power from Manitoba to our region but were met with resistance due mainly to the political inter-provincial restrictions, some of them greater than international restrictions between Ontario and the United States. And, more recently, others stated Manitoba had no more excess energy to export.

Well, apparently former federal minister of state for transport, Steven Fletcher of Manitoba begs to differ. He claims the real possibility now exists for 1,000 megawatts and up to 6,000 megawatts will be available for export to Ontario or Saskatchewan with the future completion of the Nelson River hydroelectric projects .

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UN’s war on coal threatens environmental progress in world’s desperate regions – by Donna Laframboise (National Post – December 4, 2013)

The National Post is Canada’s second largest national paper.

Activists want new coal plants banned outright

In Warsaw last month, Christiana Figueres, an unelected United Nations bureaucrat, demanded that the World Coal Association embrace three dubious and implausible ideas. This industry must, she said, shut down a particular class of coal plant, install as-yet-unavailable carbon-capture technology on any newly constructed facilities, and “leave most existing reserves in the ground.”

In the first instance, the implications of her words weren’t immediately apparent. But a 2012 International Energy Agency report reveals that when she speaks blithely of closing “all existing subcritical plants,” she’s advocating the mothballing of 100% of South Africa’s coal fleet, 99% of India’s, 97% of Poland’s, and 90% of Australia’s.

It turns out Figueres’ standards are so pie-in-the-sky that 79% of Germany’s coal facilities, 75% of China’s, 73% of America’s, and 71% of Russia’s don’t make the cut, either. All told, this UN official believes three-quarters of the world’s existing coal fleet — fully one third of the global electricity supply — should be taken offline.

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World Coal: UN climate chief Figueres ‘ignoring reality’ – by Sophie Yeo (Responding to Climate Change – December 2, 2013)

http://www.rtcc.org/

The head of the World Coal Association (WCA) has accused UN climate chief Christiana Figueres of ‘ignoring reality’, following her call to the coal industry to invest in more efficient technologies.

In an interview World Coal chief executive Milton Catelin told RTCC that Figueres’ lack of expertise in the mining and energy sectors meant she “misses some of the fundamentals about the energy sector”.

He was responding to a speech Figueres made to a ‘Climate and Coal Summit’ on the sidelines of UN negotiations in Warsaw two weeks ago, where she told the audience that “coal must change rapidly and dramatically for everyone’s sake.”

Figueres called for the closure of all low-efficiency subcritical plants, a roll out of carbon capture and storage (CCS) technology and a collective decision to leave most coal reserves in the ground. The UN climate chief was heavily criticised by green groups for attending the gathering, but her message does not seem to have gone down well with the coal investors and representatives inside.

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