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Thursday, November 22, 2012

PUB needs to review Muskrat Falls again...

Hi to all,

This is a “must read” for anyone concerned with the Muskrat Falls project, whether you are for, or against it…

I’m forwarding this off to everyone on my blog. I think it’s one of the most important reasons why the government has to send the Muskrat Falls project off to the Public Utilities Board again for full review of the business case.

In fact, there might even be a danger here to our offshore energy exploration and development if this scenario is right.

There are several reasons why I believe them to be true, with the latest coming just the other day in the Globe and Mail story on Canada’s own energy industry that tells of the same dangers.

Several factors in this report also have changed. The author talks about the Bakken oil field development in the US Midwest that shows the immense growth on North Dakota oil production. Just back in 2006, they reported domestic crude production at just 30, 000 barrels per day. Last week, the Globe reported their production had increased to 756,000 barrels, above Mauderi’s own projections of 530,000 BPD in this paper.

Last week, US domestic oil production reached 6.8 million barrels per day, up from last year’s domestic number of 5.1 million. The difference, if stretched out until 2020, the same year he projects production to 11.6 million barrels, US domestic production could total near 14 million barrels per day. That figure alone is staggering!

All the projections on natural gas are in there too.

He’s projecting a drop in oil prices to $50 and $65 US by 2015 and worldwide demand growth of just 1% . The International Energy Agency projects 1.6%, but that number has been adjusted downwards three times already.

Now, if the US starts getting into electrical generation using natural gas, we have a problem finding markets for excess electricity. We could be saddled with an immense debt to pay off through the rate payers or through any increases to taxpayers to offset the losses of Muskrat Falls.

It’s probably a big reason why some have not signed on to bring the power across the Cabot Strait yet either. They’re possibly waiting for the world to unfold, as we should…

Read the report here:


George Murphy
Twitter: @GeorgeMurphyMHA

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