In­for­ma­tion ‘sup­pressed,’ com­mis­sioner told

In­quiry co-coun­sel has sug­gested de­sire was to avoid liq­ue­fied nat­u­ral gas dis­cus­sion

The Western Star - - CLOSE TO HOME - BY ASH­LEY FITZ­PATRICK ash­ley.fitz­[email protected]­gram.com

More ques­tions are be­ing posed at the Muskrat Falls In­quiry about in­for­ma­tion from con­sul­tants, seen by the prov­ince and Nal­cor, but not re­leased to the pub­lic. That’s de­spite the in­for­ma­tion be­ing rel­e­vant to the de­bate rag­ing in 2012 over the prov­ince’s en­ergy op­tions.

Nal­cor Oil and Gas lead Jim Keat­ing was asked on Nov. 22 about a re­port from PIRA En­ergy Group in Septem­ber 2012 on nat­u­ral gas. It was never re­leased pub­licly, but is now in ev­i­dence.

Keat­ing was also asked that day about a sep­a­rate piece of work by Wood Macken­zie for the pro­vin­cial De­part­ment of Nat­u­ral Re­sources. Wood Macken­zie looked at the re­port by Ziff En­ergy on the prov­ince’s nat­u­ral gas op­tions, as a pro­posed al­ter­na­tive to hy­dro­elec­tric power from Muskrat Falls.

There were com­ments from Wood Macken­zie on the idea of us­ing im­ports of liq­ue­fied nat­u­ral gas (LNG) as an in­feed for a power plant at Holy­rood. But when Wood Macken­zie’s com­ments were re­leased to the pub­lic, the sec­tion on LNG im­ports was not there.

For­mer nat­u­ral re­sources min­is­ter Jerome Kennedy says he doesn’t know why the Wood Macken­zie com­men­tary was not re­leased to the pub­lic in full.

“I thought it was, to be quite hon­est,” he told in­quiry co­coun­sel Barry Lear­month, while on the stand ear­lier this week. He added he was well aware of com­men­tary pro­duced on nat­u­ral gas in New­found­land and Labrador and met with Ziff En­ergy, PIRA and Wood Macken­zie.

Over the past two days, Charles Bown — an as­so­ciate deputy min­is­ter in the De­part­ment of Nat­u­ral Re­sources in 2012 — was asked about the Wood Macken­zie sub­mis­sion to the gov­ern­ment while on the stand Wed­nes­day and Thurs­day. At first he couldn’t say who or­dered the changes. Af­ter some hes­i­ta­tion, Bown tes­ti­fied he over­saw the re­moval of the LNG sec­tion of the doc­u­ment at the or­der of then­min­is­ter Kennedy.

Bown sug­gested there was a de­sire by the pro­vin­cial gov­ern­ment and Nal­cor En­ergy to ad­dress the on­go­ing pub­lic de­bate on the idea of a pipe­line for nat­u­ral gas, us­ing gas from the prov­ince’s off­shore. That’s a dif­fer­ent set of num­bers than LNG im­ports.

Lear­month sug­gested the full Wood Macken­zie re­port was “sup­pressed,” be­cause it was some­thing other than Muskrat Falls to ex­plore and the gov­ern­ment was de­ter­mined at that point to elim­i­nate al­ter­na­tives.

None of the con­sul­tant re­ports state defini­tively nat­u­ral gas im­ports would have won out over Muskrat Falls as the “least-cost op­tion.”

The Ziff En­ergy re­port on nat­u­ral gas was dated Oct. 30, 2012. It was re­leased to the pub­lic on Nov. 1, 2012. It’s the doc­u­ment com­mented on by both PIRA and Wood Macken­zie, and said nat­u­ral gas was not a cheaper op­tion.

A broader “cu­mu­la­tive present worth” (CPW) com­par­i­son of al­ter­na­tives was pro­duced be­fore Nal­cor En­ergy and the prov­ince nar­rowed the op­tions to two: the “iso­lated is­land” and “in­ter­con­nected” (a.k.a. Muskrat Falls) op­tion for power. The broader com­par­i­son of op­tions showed liqui­fied nat­u­ral gas im­ports at “80 per cent to 90 per cent of Brent” price would lead to a CPW value of be­tween $10.7 bil­lion and $11.1 bil­lion. That’s com­pared to $10.8 bil­lion for the iso­lated is­land and $8.4 bil­lion for Muskrat Falls. The CPW val­ues for nat­u­ral gas pipe­line op­tions were higher.

The LNG op­tion, how­ever, was much closer to the “iso­lated is­land.” And with sug­ges­tions on pric­ing from Wood Macken­zie and PIRA, it could have come in lower than that al­ter­na­tive.

If nat­u­ral gas was one of the op­tions put for­ward to the Pub­lic Util­i­ties Board (PUB) as part of its re­view in 2011-12, the reg­u­la­tor and in­ter­ven­ers could have sought ad­di­tional in­for­ma­tion. They the­o­ret­i­cally could have of­fered ad­di­tional views on gas op­tions.

And if the ref­er­ences to LNG were left in the Wood Macken­zie com­men­tary, or if the re­port from PIRA was re­leased, there could have been ad­di­tional com­men­tary and de­bate on LNG im­ports.

Com­mis­sioner Richard LeBlanc will have the abil­ity to ad­dress whether or not nat­u­ral gas was a fully ex­plored op­tion for meet­ing New­found­land and Labrador’s en­ergy needs.

JOE GIB­BONS/THE TELE­GRAM

Charles Bown at the Muskrat Falls In­quiry on Thurs­day.

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