Nfld. & Labrador

What's the deal with Muskrat Falls? Answers to a few frequently asked questions

We explain the boondoggle basics in far fewer words (and months) than the public inquiry. And we use gifs.

Remember when it was just a waterfall?

Former premier Kathy Dunderdale, left, sanctioned the Muskrat Falls project, former Nalcor CEO Ed Martin, centre, steered the project for the first few years, and former premier Danny Williams signed the deal to develop the project. (CBC)

In need of a brush-up on the boondoggle basics of Muskrat Falls? You're not alone.

Here's a list of key questions and points from the megaproject-turned-megaproblem.

What the heck is Muskrat Falls?

Before the political bluster, the protests, the rate mitigation strategies, the bankrupt contracting company and the public inquiry, Muskrat Falls was just a waterfall.

In particular, it was (and is) a waterfall in Labrador's Churchill River, about 25 kilometres west of Happy Valley-Goose Bay. 

Wait — the Churchill River? That sounds familiar.

That's because the Churchill River is the site of another hydroelectric power project causing the province grief: Churchill Falls.

That's the Joey Smallwood-led project with the 65-year-term contract that presently provides major financial benefits to Quebec and minor returns to Newfoundland and Labrador.

You know — the one the Newfoundland and Labrador government and Nalcor Energy have repeatedly challenged unsuccessfully in court.

So what's the Muskrat Falls project?

The so-called Muskrat Falls project was first pitched as a hydroelectric megaproject called the Lower Churchill Project. It was a vision with two parts: a dam at Gull Island, a small island in the Churchill River, and another dam at Muskrat Falls.

That Muskrat Falls dam and all of its associated power-generating infrastructure — including the Maritime Link, a line to bring power from Newfoundland to Nova Scotia — is the Muskrat Falls project, and construction is nearly complete.

Gull Island is on hold, for a number of reasons.

Nalcor Energy is in charge of the project and is overseeing its development.

Was it all Danny Williams's idea?

Well … not entirely.

There's been interest in the falls' hydroelectric potential since at least the 1900s, when the Grand River Pulp and Lumber Company wanted to dam it up.

And according to this Nalcor document, every premier since Frank Moores tried to start a Lower Churchill project, with the province spending a collective $118 million from 1972 to 2003 to get one going.

Danny Williams was the premier who got it off the ground. He created Nalcor Energy in 2007 with an eye on Lower Churchill and put together many of the initial pieces. He signed the deal with Nova Scotia to develop the Maritime Link and then retired from office a week later, handing it all over to Kathy Dunderdale.

She gave the project the official green light in 2012. At that point, the provincial government said it'd cost about $6.2 billion.

Why do we even need it?

When the Williams government was championing the project, their main argument was that it'd be a "green" source of energy to power most of the province.

In particular, Muskrat Falls would replace the generating station in Holyrood, which burns nearly 20,000 barrels of oil every single day and belches out more than a million tonnes of greenhouse gases each year.

And it doesn't always function properly. Remember #DarkNL?

The plan for a link to the North American energy grid, which would allow the province to sell the excess energy to different Canadian and perhaps even American markets, was another key selling point.

Why is everyone angry?

It's tough to put together a concise summary of all of the objections to and alleged problems with the Muskrat Falls project. That's why the public inquiry, looking at why that original $6.2-billion price tag has nearly doubled and why the project is a year behind schedule, won't wrap up until mid-August — and it began in December.

But here's a partial list:

Indigenous groups in Labrador have protested the project, saying the environmental assessment process was weak and that the project will expose people living downstream of the site to methylmercury poisoning.  A number of scientists agree with them.

The increased costs of the project could wind up doubling electricity rates if something isn't done, though last month, Dwight Ball promised voters the Liberal party has a plan to keep that from happening.

Astaldi, the company hired at the outset as the project's main contractor, filed for bankruptcy and had to be replaced.

Stan Marshall, Nalcor's present CEO and captain of the project, said it was a gamble that backfired when he took over for former Nalcor CEO Ed Martin, who left the corporation under a cloud of controversy.

Former premier Roger Grimes said it was Danny Williams's "biggest mistake," one that will "haunt us 50, 60, 70 years into the future."

Even economist Wade Locke said he now regrets trumpeting the project and that he should have listened to his wife, who warned it was a bad idea.

Still confused? You're forgiven. CBC's Terry Roberts has been at the Muskrat Falls Inquiry since it began, and compiled this handy list of five key reasons the project went so horribly wrong.

Read more from CBC Newfoundland and Labrador


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