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Muskrat Falls Case Study

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In 2010, it would have made sense for the construction of the Muskrat Falls Generation Facility to go ahead. With Nalcor, the province of Newfoundland and Labrador, and the First Nations living in the surrounding area as the primary stakeholders, the main concern is the dam’s effect on the environment. Examining the problem from two schools of ethical thought, utilitarianism and formalism, leads to the conclusion that the advantages for the average citizen would outweigh the drawbacks from damaging the environment. Utilitarianism would state that the creation of a dam would benefit many people living in Newfoundland and Labrador by creating jobs and allowing the province to be more self-sufficient. Clean energy allows the province to start replacing the damaging energy sources of oil and coal, positively influencing Canadians for generations. The effect on the First Nations depending on the land surrounding Muskrat Falls must also be considered. However, the intensity and duration of this inconvenience on a small number of people is largely outweighed by the number of people the project would affect positively. The hundreds of thousands of citizens receiving clean energy and jobs from the dam dwarf the several hundred inconvenienced by the construction. The ethical principle of formalism would …show more content…

This is an estimate of capital costs, including labour, materials, permits, equipment, and fuel. There will also be operating expenses, which include insurance, maintenance, and the cost of labour to carry out these continuing operations. The revenue for this project will come from the sale of electricity to the province and other buyers. Per Nalcor’s economic benefits projections, the average income per year will be $710 million [1]. Therefore, the following equation can be used to find the breakeven point, using values in millions of dollars. The minimum acceptable rate of return is taken to be

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