October 25, 2013

Oil and gas to maintain key roles in New England energy picture

An industry analyst tells a Portland audience that gasoline, diesel fuel and home heating oil will continue to be in high demand for decades.

By Tux Turkel tturkel@pressherald.com
Staff Writer

PORTLAND — Total energy use in the United States will grow by 10 percent by 2040, an analyst from the American Petroleum Institute said Thursday in Portland.

Despite the surge of renewable sources, more than half of the energy will come from oil and natural gas, said Kyle Isakower, vice president for regulatory and economic policy at the trade group.

Hydraulic fracturing and horizontal drilling are driving the trends, he said, and the combination of these technologies is propelling the U.S. to become the world’s leading oil and gas producer this year.

In New England, Isakower pointed to government statistics that show that while heating oil consumption will continue to drop over the period, natural gas use will keep growing.

Isakower’s comments came during a seminar at the University of Southern Maine organized by the Environmental & Energy Technology Council of Maine, or E2Tech. The session focused on economics, technology and transportation in the state’s petroleum market.

The event was planned several months ago. But it was taking place a couple of weeks before voters in South Portland consider controversial rules that could restrict some oil industry activities on the city’s waterfront.

Because of that, the event attracted a handful of protesters who stood outside the entrance with banners and posters. One read: “No tar sands. Vote for WPO.” WPO is a reference to the Waterfront Protection Ordinance, and a fear among oil industry opponents that the Portland Pipe Line Co. some day will move crude oil from western Canada through South Portland.

Inside, organizers acknowledged the protesters, but said the issue wasn’t part of the agenda.

Instead, they heard from a panel of industry experts in geology, distribution, storage and transportation. Taken together, their message was that oil and gas will continue to play a vital role in powering the Northeast, and companies are taking steps to assure its availability to consumers.

Robert Moore, chief executive officer at Dead River Co., noted that roughly 70 percent of Maine homes still burn heating oil.

“If you take oil out of the energy mix, you’re going to leave a lot of people out in the cold,” Moore said.

Alternatives to heating oil are growing, he said. They include natural gas, although pipeline availability will be limited in rural areas, and propane, which is becoming cost-competitive with oil.

Moore also noted that 95 percent of transportation in Maine takes place on roads, in vehicles that burn gasoline and diesel. Later in the session, a participant asked the panel to comment on the future of natural gas and compressed natural gas for transportation.

Isakower predicted a slow and steady transition to natural gas vehicles. Truck fleets will lead the way, but it will take time to develop the needed storage and filling stations for cars.

After the session, an environmental activist challenged the notion that Maine’s transportation sector would remain so dependent on gasoline in the future.

Dylan Voorhees, clean energy director at the Natural Resources Council of Maine, said Isakower’s forecasts reflect a “business as usual” approach that favors more demand for oil and gas.

“I would contest that this needs to be what our future is,” he said.

Voorhees pointed out that emerging federal gasoline mileage standards will greatly reduce oil consumption. Oil use will be further eroded by the growing acceptance of hybrid cars, and refinements in battery technology that will make electric cars more popular and affordable, he said. With electric cars, people don’t have to wait for natural gas filling stations to be built, he said.

“We already have an electric distribution system,” he said.

Tux Turkel can be contacted at 791-6462 ortturkel@pressherald.com
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