For immediate release
March 12, 2019
This week the provincial government announced it would introduce legislation to establish a new oil and gas corporation separate from Nalcor.
Today in Question Period, NDP House Leader Lorraine Michael (MHA, St. John’s East-Quidi Vidi) questioned how government plans to pay for this new standalone corporation and mitigate power rates at the same time. The Minister of Natural Resources indicated that Nalcor will siphon money into the new oil and gas corporation until it generates revenue, yet meanwhile, government is counting on Nalcor’s equity assets to mitigate electricity rates, says Michael.
“I ask the Minister, how can she be so sure there will be enough money in Nalcor’s assets in 2021 to cover both rate mitigation and the oil company’s operations?” Michael said.
According to the Minister, Michael says, the new corporation will return significant value to the people and economy of the province. However, it seems clear there will be no new revenue to the corporation before 2025 when Bay du Nord starts production.
“What will be the ‘significant value’ of this corporation to the lives of the people of the province before 2025?” Michael asked.
Michael says that equity revenues are dependent on production and price.
“We have already lost $70 million in royalties this fiscal year due to the oil spill,” said Michael. “I ask the Minister of Finance, have we met the oil price projected for this year or is Nalcor losing money in equity assets as well?
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For further information, contact Zaren Healey White, Director of Communications, NDP Caucus at 729-2137 (o), 693-9172 (c), or zarenhealeywhite@gov.nl.ca.