May 26, 2013

Maine poised for historic transition to natural gas

Amid the state's rush to convert from oil to natural gas, however, it's possible that some issues important to Mainers are not being fully examined.

By Tux Turkel tturkel@pressherald.com
Staff Writer

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Bruce Madore, director of engineering and construction, looks over natural gas pipes Friday in the Summit Natural Gas of Maine yard in Augusta. Summit is poised to undertake major multimillion-dollar pipeline construction projects in both central and southern Maine.

Joe Phelan / Kennebec Journal

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"In the short term, the rush to natural gas is going to make it challenging for those of us in the wood heat and pellet business," said Phil Coupe, co-founder of ReVision Energy in Portland. "But gas is not a panacea. At the end of the day, it's still a finite, nonrenewable fossil fuel."

The company's subsidiary, ReVision Heat, is promoting a European-made wood pellet boiler that installs for between $9,000 and $13,000, depending on the degree of automation. That's more than a new gas boiler, but heating with wood keeps energy dollars in the state, supports local jobs and cuts the carbon dioxide emissions associated with climate change by 90 percent, Coupe said.

For these and other reasons, gas shouldn't be considered "a silver bullet," in the view of Beth Nagusky, Maine office director of Environment Northeast. It may be a cleaner-burning fuel, she said, but gas has impacts that are being largely downplayed by its supporters, including hydraulic fracturing that can pollute ground water, and methane emissions that speed up climate change.

"There's a concern about becoming overly dependent on another fossil fuel, when we really should be getting off fossil fuels," Nagusky said. "Being overly dependent on natural gas is not the answer."

Natural gas should be viewed as part of a comprehensive energy strategy, she said. It shouldn't be promoted over cost-effective energy efficiency measures, which Nagusky said should always have the highest priority. And gas should be compared to other heating options that may make better financial sense for some homes, she said, such as high-performance electric heat pumps.

But with the Northeast's newfound abundance of natural gas expected to keep prices below oil for many years, the case for gas-fired power plants is just too compelling, according to Tom Welch, chairman of the Maine Public Utilities Commission. There just aren't many other practical choices, Welch said. No new nuclear plants are being built in the region. Canadian hydro-power, while abundant, is priced for export into New England at market prices that track natural gas.

"So it's not so much whether natural gas is a good idea, it's just a fact," he said. "The question is, what can Maine start doing now, to ensure it gets natural gas that's closest to the wellhead price?"

WHO WILL PAY FOR PIPELINES?

Until the 1990s, Maine literally was at the end of a natural gas pipeline system that originated in the Gulf Coast. Then two interstate lines were built through Maine to bring new Canadian gas supplies into New England, from Nova Scotia and Alberta. These lines -- the Maritimes & Northeast Pipeline, and the Portland Natural Gas Transmission System -- led to the construction of gas-fired power plants in Maine, and helped bring gas to homes and businesses in communities that include Bangor, Windham and Brunswick. The line from Nova Scotia also made it attractive to build a terminal to import liquefied natural gas from overseas into New Brunswick and through Maine.

But in the past five years, the market changed in unpredictable ways. The gas deposits off Nova Scotia fell short of expectations. Another deposit off Newfoundland has taken longer than planned to bring online. New drilling technologies made it possible to extract a plentiful supply of gas from deposits in Pennsylvania and New York, essentially on New England's doorstep. Those deposits, in the Marcellus and Utica fields, are so large that they have helped trigger a gas glut that collapsed prices and, as a side note, killed the economics of importing LNG.

This bounty of gas should be good for Maine and New England, but it's more complicated. It gets back to the lack of pipeline capacity leading from Pennsylvania and New York into New England. This congestion means that on the coldest winter days, when gas is in high demand for both heating and power generation, there's not enough to go around.

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