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

Maine may be on the verge of a rapid, historic shift from oil to natural gas as a source of energy for generating electricity and heating homes and businesses.

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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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It's a transition that echoes the mid-20th century. In 1940, eight in 10 Maine homes were heated with wood or coal. Just 20 years later, 80 percent had moved to oil heat, U.S. Census figures show.

But in Maine's rush to gas, it's possible that some important issues aren't being fully examined.

Is it wise for Maine to trade dependency on one fuel for another?

Is it a good idea to be so reliant on natural gas for electricity?

Will cheap gas kill more-costly renewable power, namely electricity from wind, which has the potential to become a major industry in the state?

Oil became dominant a half-century ago because it was cheap and, compared to wood and coal, cleaner and more convenient. Today, natural gas heat is the fuel of choice because it's roughly half the cost of oil. That means a typical home that spends $3,000 with an oil furnace could heat for $1,500 with a modern gas boiler. And while all energy prices fluctuate, many experts expect that relative relationship to persist for the foreseeable future.

That forecast, coupled with the price volatility of heating oil, has led to a scramble in Maine this spring to catch up with the rest of the country, and ease a burden that's costing the state hundreds of millions of dollars a year. Half of the homes in the United States already heat with gas, compared to roughly 5 percent in Maine. But that likely will change in the next few years.

In the Kennebec Valley, Summit Natural Gas is poised to begin construction on a $350 million pipeline project that aims to serve 15,000 homes and businesses from Gardiner to Madison within five years. Summit is anchoring the network with major manufacturers, including the Sappi Fine Paper mill in Skowhegan. Next year, Summit is scheduled to enter Falmouth, Cumberland and Yarmouth. The company hopes to reach 86 percent of potential customers in those towns within five years.

Summit's business plan, if successful, is in itself a historic undertaking. Not since modern gas lines were expanded in southern Maine in the mid-20th century has such an extensive local distribution network been put in the ground.

Meanwhile, Summit's prime competitor, Maine Natural Gas, currently is bringing pipe into Augusta, with the goal of reaching 70 percent of the homes and businesses.

Where pipelines don't run, industrial users are so desperate for cheaper energy that they are having compressed natural gas delivered by tanker trucks that shuttle hundreds of miles a day between Boston Harbor and Maine destinations. Oil companies also have begun delivering CNG. New Brunswick-based Irving Oil earlier this month began trucking CNG across the border from its terminal in the province to the McCain Foods plant in Easton. Portland's Dead River Co. has teamed with XPress Natural Gas to serve midsized commercial businesses across the state.

As demand increases, pipeline developers are responding. Two existing, interstate pipelines are making plans to expand their capacity in New England.

But these expansions won't be enough to satisfy Maine's growing need. That has led some lawmakers to feel that state government should be given the authority to issue bonds and extract fees from utility customers to purchase new gas capacity. The idea is to team up with other states and businesses, to commit to buy enough new gas that developers would be enticed to build a new interstate pipeline into New England. Maine uses only 6 percent of the gas coming into the region, so no one will build new capacity just for Maine.

(Continued on page 2)

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