Exclusive Interview with the Honourable Shawn Skinner

Minister of Natural Resources, Newfoundland and Labrador, Canada

Lower Churchill Project becomes a reality

The Lower Churchill Falls development represents a new era in the management of the abundant natural resources in Newfoundland and Labrador.

In a landmark deal signed in November 2010, the provinces of Newfoundland and Labrador and Nova Scotia signed an agreement with Nalcor Energy and Emera to begin development of the $6.2 billion hydroelectric deal.

The project, divided into Muskrat Falls and the larger Gull Island, will finally see Newfoundland and Labrador benefit from its significant hydro power. Churchill Falls has been generating hydro power through an arrangement with Quebec since the 1960s, but due to short-sighted negotiations, Newfoundland and Labrador does not wield any power from the Upper Churchill station.

Called a “day of great historic significance to Newfoundland and Labrador,” by then Premier Danny Williams, the benefits of the deal are enormous, including thousands of jobs and billions of dollars of economic activity.

In an exclusive interview with CBJ, the Honourable Shawn Skinner, the Minister of Natural Resources, N.L. says, “The Lower Churchill project is the most significant electrical generation and transmission project undertaken by this province in 50 years.

The Lower Churchill River system comprises Muskrat Falls with 824 megawatts of power and Gull Island with 2,250 megawatts. Phase 2 of the project will be the development of Gull Island for which construction is expected to start several years after Muskrat Falls.

“We Newfoundland and Labradoreans view the Lower Churchill as being an opportunity for us to finally control our own destiny, to finally make the money that we should be making from our hydro resources that we never got the opportunity to make with Upper Churchill.” 

“To get that opportunity.”

That was the mandate of the government under premier Danny Williams, and get it, they did. After more than five years of negotiations, the Newfoundland and Labrador government were able to consummate a deal whereby the province will use power generated by the Lower Churchill to meet its energy needs, and those of Nova Scotia, New Brunswick and potentially the New England states.

“There is great excitement in the Maritimes and Atlantic Canada about the fact that this power can be wielded through Nova Scotia,” says Skinner. It opens up all kinds of opportunities for development in Nova Scotia, New Brunswick and P.E.I.  They now have a source of energy that they did not anticipate having and they can use that to further their social and economic development.

“We are developing better relations with the Maritimes and American customers. This I see as being the first business deal of many more that could potentially happen.”

There is no doubt Lower Churchill will provide the people of Newfoundland and Labrador with a clean, reliable source of power which ensured the long-term stability of power rates. Once on-stream in 2017, Lower Churchill will generate 4.9 terawatt hours annually, with about half of that allocated to the island’s power needs, and dispensing with the currently-used Holyrood oil station. 20 per cent of the power will be provided to Emera Inc. for use in Nova Scotia. The remaining power will be sold into the Maritime Provinces and the New England states.

“The closing of the Holyrood station will take over 1 million tonnes of carbon out of the environment annually,” says Skinner. “Once Muskrat Falls comes on stream, Newfoundland and Labrador will have an electrical system that will be 98 per cent carbon free. As a province we are blessed with an abundance of renewable energy resources.”

Lower Churchill will also equate to lower electricity rates and more sustainable energy, according to Skinner. “We are going to be more in control of electric because we will be producing our own. There will be more control over the cost of energy to the people.”

New era

When it is mentioned that Lower Churchill, along with the Hibernia, White Rose, Terra Nova and Hebron oil fields, have ushered in a new era for the province’s economy, Skinner says, “Your assertion that we have turned a corner and done a 180 is absolutely correct. The economy here in Newfoundland is robust. We are an energy warehouse.

“When entered into new fields, so to speak, when we got involved in the oil and gas business, initially we were just taking royalties. Once we got into equity stakes we started off with a five per cent equity stakes in some field, we now have a provincial policy it will be a 10 per cent stake, so we are getting more benefits from our resources, which is benefitting the people of the province.”

With better management of its natural resources, Newfoundland and Labrador is a new Canadian power house.