Win augurs well for energy, resource development and First Nations

On April 7, 2014, Quebec elected a majority Liberal government. The Liberals have 70 out of 125 seats in the National Assembly and garnered 41% of the vote. The outgoing Parti Québécois has 30 seats and 25% of the popular vote. Barring extraordinary events, the Liberals will be able to govern until the next fixed election date in October 2018.

What are the implications of the Liberal victory for electricity, mining, oil & gas, the Plan Nord and First Nations?

Electricity

On the production and transmission side, little change is expected. Projects under construction will be completed and the upcoming call for tenders for 450MW of wind power should proceed. The Liberals will want to increase exports and as a result will encourage transmission projects. On the consumption side, electricity rates will continue to rise but not necessarily for large industrial consumers. The new government should be more open to using current surpluses to retain industry and encourage investments.

Mining

The recently adopted mining regime may be tweaked but will essentially remain. The big difference will be in attitude. The mining industry will now deal with a government unhesitatingly in favor of mining and other natural resource development, subject in all cases to social acceptability and the protection of the environment.

Oil & Gas

The Liberals are generally accepting of the proposed pipeline reversal and construction projects, provided that they benefit the Quebec economy. The Liberals are also in favor of shale gas and oil exploration and development and will put in place a proper legal and tax regime. The Liberals,however, are not in favor of massive governmental investment in oil & gas exploration. They are of the view that it is not government’s role and that it is ill equipped to incur the considerable risks associated with this activity. As such, the Anticosti oil exploration deals recently signed by Quebec may be revisited. Negotiations with the Federal government regarding the Old Harry offshore oil field should proceed more smoothly now that Quebec has a pro-Canada government.

Plan Nord

Though at present it is more marketing slogan than detailed plan, the Plan Nord is back and will be an important economic development tool.The Liberals now have time to develop the Plan Nord in a deliberate manner.

First Nations

In his acceptance speech, incoming Premier Philippe Couillard specifically mentioned First Nations and his desire to partner with them on projects (read energy, natural resource and infrastructure projects). This gracious gesture is something new, but is also reflective of the fact that Dr. Couillard ran and was elected personally in the constituency of Roberval, which extends over a large area of north-central Quebec, extending north from the Saguenay region. He now considers this area his “home.” It augurs well for a smoother and more rapid development of natural resources in much of Quebec.

Categories: Economy, Electricity, Energy, First Nations, Mining, Natural Resources, Plan Nord, Quebec Oil & Gas

How Alberta and the Keystone XL pipeline can learn from Quebec’s failed Great Whale project

Erik Richer La Flèche

Posted on March 18, 2013

Alberta, and by extension Canada, is learning a lesson Quebec learned the hard way 20 years ago.

U.S. opposition to the Keystone XL oil pipeline has been galvanized by less than favourable attention on Canada’s recent environmental record and the manner in which Alberta’s tar sands are exploited. The same is somewhat true in British Columbia and Quebec, where there is opposition to new pipeline routes from Alberta to the Pacific and the Atlantic, respectively.

If Albertan oil cannot be exported, then it will be stranded and its price heavily discounted. This will not just affect oil producers, but also Alberta’s finances and the Canadian economy as a whole.

It threatens to be Alberta’s Great Whale.

A Pocket History of Great Whale

It’s 1986. Quebec’s newly-elected premier, Robert Bourassa, announces his intention to build the Great Whale hydro-electric project in Quebec’s north. The project will add 3,090 MW to the more than 10,000 MW already completed at the La Grande complex.

Electricity generated at Great Whale is to be exported to New York and New England. In 1988, the New York Power Authority (NYPA) conditionally signs a 21-year $17 billion power purchase contract with Hydro-Quebec, Quebec’s state-owned power utility.

This contract is essential to make Great Whale feasible, and it’s great news for the Quebec economy.

But by 1992 the contract with NYPA is in tatters. Two years later, Great Whale is permanently beached.

Quebec’s Failure to Consult

One major mistake made by the Quebec government was that it undertook the Great Whale project with little inclination to consult, and even less to involve, the First Nations most affected by the projects, Quebec’s Cree and Inuit. This led to push back from First Nations, especially the Cree, resulting in lengthy and acrimonious lawsuits and public debates that galvanized opposition to the project.

The Quebec government and Hydro-Quebec were caught flat-footed and unprepared.

Image of an indigenous protest inside a traditional canoe

Via Ottertooth.com

The Cree and Inuit advantageously used the courts and media. First Nations accused Quebec of not only destroying a fragile environment, but also of committing “cultural genocide” by flooding large swaths of their ancestral lands.

The high point of the First Nations campaign was the very telegenic arrival on Earth Day 1990 at New York City of a Cree/Inuit boat paddling down the Hudson. Advance notice ensured maximum media coverage. This in turn rallied U.S. NGOs and other pressure groups behind the cause.

In 1991, NYPA asked Hydro-Quebec for a one-year extension before confirming the previously signed power contract.

A year later, NYPA decided not to proceed. While economic factors were the main cause of the cancelation, the environmental and other social issues raised by the project made the decision easier to make and defend.

Great Whale was finally shelved by premier Jacques Parizeau in 1994 after a face-saving hiatus.

Quebec learned a valuable lesson from this episode: what happens at home resonates in export markets.

As a result, Quebec has been mindful in the last 20 years to repair and improve relations with its First Nations in general, and the Cree in particular. Several comprehensive agreements have been concluded, relations normalized and a repeat of the Great Whale debacle made less likely.

Categories: Electricity, Energy, First Nations, International, Natural Resources, Quebec Oil & Gas

Future Imperfect

The business of infrastructure, energy and mining in Quebec

Posts from the “First Nations” Category

Liberals mine Quebec votes to power to majority

Erik Richer La Flèche

Posted on April 8, 2014

Win augurs well for energy, resource development and First Nations

Electricity

Mining

Oil & Gas

Plan Nord

First Nations

How Alberta and the Keystone XL pipeline can learn from Quebec’s failed Great Whale project

Erik Richer La Flèche

Posted on March 18, 2013

A Pocket History of Great Whale

Quebec’s Failure to Consult