Muskrat Falls Review
Written submission presented

The following is a written submission I have made concerning the Muskrat Falls project. I wrote it on the basis of the consumer perspective, and what it could mean to consumers IF those options were looked at in scrutinizing the deal.

Frankly, I'm worried...

It's not that I would be against the project, IF all the options had been put on the table. That's the problem I have with it. So, excuse me if I wander away from the "gas thing" for just this once. I hope I wrote this clear enough that you will understand the perspective I was shooting for. We're supposed to be living, after all, in a world where the consumer is supposed to dictate. It just hasn't been that way for a while now, has it?...

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Dear sir or madam,

I would at first like to thank the Public Utilities board for their work, albeit under a stressful timeframe and with the limited resources that you have been given. It must be hard to live up to expectations at times given the limited time-frame you have to perform your work.

I have had some experience dealing with energy issues, particularly on a consumer perspective. It is in this perspective that I write to the Board.

The purpose of this presentation is to present my views of the Muskrat falls proposal, and what consumers could be missing. Even though these thoughts are outside the scope of your work, I feel they should be entered into the public record.

I feel that, in not choosing other options as the scope of the proposal into new energy for the province, that the consumer’s best interests have not been served, and that the province is missing out on other opportunities. My views are my own in this regard.

No natural Gas option

The fact of the matter is that natural gas was not considered in looking for other options in the supply of power to the province, and it is in this regard that I feel that the province should hold back until this option has been analyzed. Natural gas, as we know, can be used for the generation of electricity and it is currently cheap, in plentiful supply, and as the markets are predicting, will continue to be for at least ten years because of a build in the overall supply inventory.

Currently, as of February 29, 2012, Nova Scotia consumers are paying the rough equivalent of 4.7 cents a kilowatt hour for electricity, 50.1 cents a litre equivalent for heating oil and 33.3 cents a litre for propane. http://www.heritagegas.com/residential/residential-rates.html

It’s not just the fact that natural gas is available in quantity that should make it attractive. When it comes to the use of natural gas as a viable energy source, the province should also be looking at bringing in natural gas as an anchor to bring the gas to the North American marketplace. Whatever we don’t use for domestic electrical production, or for central heating for homes, we could be sending it further by connection to Nova Scotia’s present lines to the North American natural gas grid. It is estimated that Nova scotia’s natural gas only has another eight years of expectancy, so, we know they have to find alternative fuels to supplement mainland Canada needs.

That being said, we lose other things like royalties, a secondary source of taxation, municipal funding and employment in a new industry. We also lose employment in secondary sourced industries that would supply consumers and industry that use natural gas.

No wind option

A gentleman form a company called Western Wind Energy was on the Business News network a few weeks ago talking about the cost of wind energy right now. His costs put wind energy at $1 million per megawatt generated and installed being done by Asian wind energy companies now. Estimates for wind energy generation vary anywhere between seven cents, to upwards of fifteen cents a megawatt of generation. I really don’t know what the potential could be for lower cost electricity to the end user (consumer) here, but, I believe we are missing a key ingredient in the mix of our energy options and why we should be doing it in the first place.

No Conservation option and “choice”

We are fast getting to be a society that cares about what happens to our environment. Simply put, we are talking a lot about consumption of electricity and not enough about conservation of energy. Cost may be argued as a final arbiter of what the consumer uses, but “choice” is missing in the mix that brings affordability in line with consumer need. I’m asking that the Public Utilities Board consider the factor of consumer affordability in its further deliberations on the viability of the Muskrat Falls project. While discussions are ongoing, the fact is that we can in fact, take the demand off electrical needs by introducing natural gas as an alternative energy option. Not only will we take the pressure off the electrical grid by natural gas users’ switch to that source of heating, we also add further capacity to the “isolated island”. In the end, we can in fact, bring consumer prices for these energy commodities down by allowing the entry of another option like any of these into the consumer-driven marketplace.

Environmental impact

Negating the pressure to find alternative generation of electricity by the development of Muskrat Falls, we get to impact our foot-print on the environment as well. Considering the fact that there was a federal study done of the possible impacts on the Lower Churchill development on Lake Melville, it concerns me that the natural decay of vegetation into the ecosystem from the new reservoir would add another source of mercury to the water system that should be of concern. With Quebec’s development of the James Bay project, there was some concern over mercury levels in the eco-system that was a worry to residents of that water system. I’m going by memory here when I say that there was a correlation between fish in the area and the indigenous peoples who lived there. Links were made between mercury levels there and the situation in Minimata, Japan. Symptoms of Minimata disease were in the areas of the James Bay projects that allowed mercury to enter into the food chain where it affected the people there.

Do we really need this power that bad that we put these things at stake? Are there other things that we could be doing that we aren’t? Can we help make life affordable and cost-effective by allowing other options that aren’t being explored?

My regards and thanks,

George Murphy

Group researcher/member

Consumer Group for Fair Gas Prices

Consumers to take a hit

Numbers up across the board

Media release

Conception Bay South, NL, February 28, 2012- Consumers will see an increase at the pumps this week when the Public Utilities Board adjusts prices this Thursday morning. But, if the economic news today is any indication, elevated prices may just start on their way down. That news comes from George Murphy, group researcher with the Consumer Group for Fair Gas Prices.

“Numbers for refined commodities have been up substantially over the past week, but there is a sign today that we could start to see prices come down slightly,” Murphy said. “A drop in US durable goods sales today may be one of the first indicators of a solid slackening in consumer spending, while another report from the US is predicting an increase in crude oil supplies that would also be a strong sign of demand dropping”.

“ Consumers may be already sending a strong message.”

The numbers

“I have to caution that there is volatility in the numbers this week. Heating and stove oils are showing up by 2.23 cents a litre, while diesel fuel is up by close on 2.5 cents a litre. Gasoline shows an added 3.1 cents a litre this week.

However, with yesterday’s market trading, there was a sign of possible relief for next week, if market conditions hold or retreat from this week’s highs. The last day of data is pointing down by 2.6 cents a litre, but we still have a full week to go.”

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For more information, contact;

George Murphy

Group researcher

Consumer Group for Fair Gas Prices

Twitter: @GeorgeMurphyNDP

Numbers are up
Consumers will take a hit this Thursday

It's not going to be easy paying close on a $1.40 a litre here. Things are tight as they are. heating, stove oils and diesel are all showing up this week as oil continues to climb in spite of the realities of the markets.

Demand has faltered...

Total product supplied has dropped right along with it, and Big Oil has put the brakes on added production because they see something coming, and it's not nice.

An economic slowdown in the works maybe?...

regardless, the numbers are up and the speculator out there is going to make us all pay the piper. Here's what I have so far this week, with one more day to go:

• Heating and stove oils are up again by 2.36 cents a litre.
• Diesel is up by 3.0 cents a litre, and...
• Gasoline is up by 3.5 cents a litre.

I'll be back again with the bad news on the final numbers tomorrow night.

Regards,

George

Oil up $4 US this week…

Refined commodity prices up slightly

Media release

Conception Bay South, NL, February 21, 2012- Consumers in Newfoundland and Labrador may be worried about rising oil prices, and they will see some slight changes to refined commodity prices this week. That news comes from George Murphy, group researcher for the Consumer Group for Fair Gas Prices.

Oil prices up

“Oil increased on optimism that the Greek bailout will help Greece deal with mounting debt and secondly, people are optimistic that positive economic numbers show that the US economic recovery is underway. I don’t think that Iran’s embargo of oil sales to Britain and France really figured into things this week as total exports to the two Euro nation countries only amount to a combined 60,000 barrels of crude a day, hardly worth mentioning. However, the story of refined prices may not show itself here until next week, if the market trend from Tuesday continues,” Murphy said.

The numbers

“Refined commodities failed to move upwards any huge amount, but they were still up. Any increases to prices now are starting to add pressure to consumers. All fuels I measure are up, heating/stove oils by 45/100ths, diesel by 1.0 cents a litre, and gasoline up by 5/10ths of a cent. Keep in mind that there may have been some volatility in after-market trading hours that I cannot track. Monday’s close of the markets in the US was one such day.”

Muskrat consideration

“The Pub should have been mandated to look at all energy options in examining the scope of the Muskrat Falls project. The simple case in point here is the fact that Newfoundland and Labrador consumers have very little option in choosing the type of heat they would like to have in their homes and businesses, and therefore, consumer prices remain high as a result of that. In weighing in on any of the given options to consider, consumer choice has been left out and best pricing practice has been forgotten about. If consumers have the simple choice of natural gas as a central heating source, for example, it comes into competition with heating oil, electricity and wood heat. Right now, if you ask the consumer in a natural gas market if they’re getting a good deal, they’ll probably tell you a firm ‘yes’. That option for using natural gas as a future source of heating in your home is not being brought to the market, and that could be even more costly to consumers down the road. They are being cheated out of a lever that could be used in getting better prices for a consumer commodity.

‘Choice’ Is being taken away, and that could be another loss in going the Muskrat Falls way and failing to look at all the options available.”

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For more information, contact;

George Murphy

Group researcher/member

Consumer Group for Fair Gas Prices

Numbers up again

When will the consumer speak?

Media release

Conception Bay South, NL, February 14, 2012- Consumers in Newfoundland and Labrador will experience another increase in refined petroleum prices this week when the Public Utilities Board adjusts prices on Thursday. That news comes from George Murphy, group researcher for the Consumer Group for Fair Gas Prices and NDP Member of the House of Assembly for St. John’s East.

“I don’t know how far upwards prices have to climb before the consumer speaks by holding back on purchasing. Prices are out of balance with the realities of the crude oil markets and we should be seeing prices well below where they presently sit. I blame speculators for the move upward in the refined commodity markets”. Murphy said.

What’s happening with refined prices?

“Crude oil is up slightly this week by a rough two dollars US on a barrel and sit close to where they were during the first week of December of 2011. The kicker here is that refined prices for gasoline, for example, are close on ten cents a litre higher than where refined products were during the same week. Heating, stove oils and diesels are also trending up over the same weeks by close on five cents a litre for the distillates. There’s no doubt in my mind that there’s a concerted move afoot to make some quick dollars off the consumer, and the test of the consumers limits of patience in paying higher consumer prices.

The numbers this week

“As predicted last week, heating and stove oils are projected to increase by another 1.59 cents a litre, while diesel fuels are projected to increase by another 1.9 cents. Gasoline prices are projected to increase by 2.6 cents a litre. Keep in mind that the heating oil number is just a rough indicator but still is reflective of stove oil numbers. The same also occurs for the diesel fuel number as both heating oil and diesel fuels are reflective of a winter blend for which I cannot track without more information on kerosene in their mix. However, they are still a good indicator of those fuels direction in price change.”

Will the markets see a correction?

“Consumers are going to have to conserve and try to bring pressure, on a collective basis, to Big Oil’s investors. It will take a while for prices to retreat if consumers started tomorrow. In the meantime, it may take a drastic change to the present economic conditions out there in order for prices to return to something more affordable, and sustainable to consumers. Right now, there’s probably people out there whose patience with present pricing levels is beginning to wear thin.”

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For more information, contact;

George Murphy

Group researcher/member

Consumer Group for Fair Gas Prices

Twitter: @GeorgeMurphyNDP

Numbers still moving up.

What will it take to see pricing relief?

As speculators keep pouring money into refined product, it seems we're getting into the same runaway scenario we witness in early to mid 2008. Such was the time then when we were all exposed to a run-up in prices that saw crude oil finally enter the tailspin from $150 US a barrel.

Question now is: How long before we hit the wall?

Some stories out there are suggestive of $180 US a barrel oil by mid July, hardly likely with the world economy on the precipitous edge of economic recovery. If it does make it that high, look for cuts in manufacturing and production world-wide. I think we're close to a retreat, but the problem right now is how does it start?

Consumers are on the edge now. If prices to consumers do increase again this week, we may be at a early pivoting point. I just can't see how consumers can't spend in an age where just going to the grocery store is beginning to get expensive.

Surely, the market traders are realizing this?

I don't think so.

Here's what I have so far for this weeks price change, keeping in mind my numbers don't track volatility that occurs, and, of course, one day to go:

• Heating and stove oils show "up" by 1.68/Lt again this week.
• Diesel is also up by 1.9/Lt, and...
• Gasoline shows up also, but this time by 2.6 cents/Lt.

Back again tomorrow night, until then, or follow me on Twitter...

George

Twitter: @GeorgeMurphyNDP

Oil holding steady

Distillate prices up on cold European weather

Media release

Conception Bay South, NL, February 7, 2012- Consumers won’t see much change to gasoline prices this week, but the same can’t be said for distillate fuels as refined distillate prices continue to climb. That news comes from George Murphy, group researcher for the Consumer Group for Fair Gas Prices.

What’s driving up distillate prices?

“Cold European weather is probably what is driving up refined distillate prices this time around. Record cold and the fact that European countries are the heaviest consumer of distillate-type fuels are combining to move heating, stove oil and diesel fuel prices this time around, and if the cold weather persists there, it may not be the end of it.” Murphy said.

The numbers

“Numbers show that heating and stove oils will increase by 1.05 cents a litre, while diesel fuel will increase by a penny. Gasoline prices are relatively steady, in fact showing two tenths of a cent down for this week. Keeping in mind my margin for error of three tenths, there may be no change to gasoline prices this time around.

Numbers for next week are starting to form already with distillates showing up so far by another two cents or so, with gasoline again showing hardly any moves, albeit upwards in the tenths of cents. Those preliminary numbers will change if the cold snap breaks. Keep in mind as well that this is very early and full data has to be collected before I can make a final guess early next week.”

Saudi Arabia to keep prices below $100 a barrel

Bin Talal, the CEO of Saudi Arabia’s Kingdom Holding company says that his country cannot allow market jitters over the Iran situation drive up oil prices above the $100 US a barrel mark. Market fears are such that traders believe that if Iran were to block the Strait of Hormuz over its nuclear program, then any exports from Red Sea ports will be disrupted, thus driving up oil prices.

However, the same belief cannot be said of Brent crude prices, which are a more widespread use worldwide, which are set to break $120 US a barrel. Some are saying that the Saudi’s are playing the $100 a barrel card to calm market fears over a possible sharp rise in crude oil this summer where prices are projected to trade for $180 US.

“I don’t think that $180 US a barrel is possible however. If that happens, we’ll all be witness to a collapse in consumer spending and a collapse in any economic recovery the likes we’ve never witnessed before, you can count on that!”

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For more information, contact;

George Murphy

Group researcher/Member

Consumer Group for Fair Gas Prices

Twitter: @GeorgeMurphyNDP