Long Road Ahead for Baldacci’s Energy Vision
CORRIDOR
Bangor Daily News
Drew FitzGerald
Boston University Washington News Service
April 23, 2009
WASHINGTON –Gov. John Baldacci made his priorities clear last month when he said he wants to be remembered after the end of his term as “the independent energy governor” who brought more jobs, cheaper energy and additional revenues to Maine.
Since he said that, Baldacci has moved quickly to stimulate renewable energy projects in the state while promoting energy conservation, including a proposal to combine once-scattered energy programs under a new independent council called Efficiency Maine Plus.
As early as last year, however, the governor laid the cornerstone to his energy agenda with a call for an “energy corridor” spanning the state.
In establishing his energy priority, Baldacci was echoing President Barack Obama’s promise in his February address to Congress to reinvent U.S. energy policy with billion-dollar investments in cleaner power plants and new transmission lines.
Baldacci’s proposed Northeast Energy Corridor, officials say, would offer jobs, energy and income from fees collected from corridor users in a state reeling from double-digit unemployment in some counties. But before the plan makes it off the drawing board, it must navigate a winding path through often conflicting local, environmental and business interests.
Baldacci aides point to interest from Irving Oil, Bangor Hydro and New England Independent Transmission Co., which is financing a separate underwater power line from Wiscasset to Boston, as signs of private-sector support. They say they can avoid costly and often contentious battles over private land by running electrical power lines, natural gas and oil pipelines along interstate highway rights-of-way.
“We know that the right-of-way exists,” state Public Advocate Dick Davies said. “The questions we’ll be looking at are technical ones. For instance, if you had an oil pipeline next to a natural gas pipeline directly under an electricity transmission line… how do we minimize the physical and environmental impacts?”
Before that, Baldacci and state legislators must also answer political questions. Washington County Commissioner Chris Gardner, who traveled to Augusta earlier this month to voice his concerns over the plan at a legislative hearing, says he likes many parts of the governor’s energy initiative but wants the state to play its hand more strongly before committing to a project that offers the Canadian energy industry a windfall in potential revenue.
“Some of Canada’s positions seem to be grounded a little bit in protectionism,” Gardner said in an interview. “If this is a great idea for New Brunswick [today], it will be a great idea for New Brunswick tomorrow. They need us to work with them to allow them to grow their economy and energy sector.”
Conversely, Maine-based Calais LNG needs the Canadian national government to allow liquefied natural gas (LNG) tankers to pass through Passamaquoddy Bay to where the company wants to build a terminal to bring the fuel to market. Canadian officials say the Head Harbor waterway to Calais could be too dangerous for the energy-packed ships to use, and New Brunswick-based Irving Oil has nearly completed its own terminal farther north in St. John, N.B.
Some Maine industry advocates accuse Ottawa of blocking potential competition to its own LNG terminal under the guise of safety and environmental concerns, especially after a U.S. Coast Guard waterway suitability report in January found the passage to a nearby LNG project safe. The project still awaits impact reports from the U.S. Federal Energy Regulatory Commission.
“Maine has some of the highest electricity costs in the country, and we pay more for natural gas than anywhere in the United States,” said Tony Buxton, counsel for the Industrial Energy Consumer Group, a Maine business coalition that advocates for lower energy costs. “If you were [planning] an LNG facility, you would want to bring it closest to the land and where demand is highest. If we build an LNG facility in Maine, there’s no question we have a market for the gas.”
Natural gas burns more cleanly than coal or oil and can generate electricity cheaply and reliably. The biggest challenge for energy companies is moving the gas to market because it takes up so much space. To make it easier to transport, producers chill the gas until it turns to liquid, making it easier for ships to haul. The fuel is then reheated at facilities like the proposed terminal in Calais – or the nearly complete Canaport terminal in St. John – before entering pipelines for distribution.
New Brunswick Minister of Energy Jack Keir says Canadian authorities are not opposing any LNG facilities in Maine outright but have the right to review projects that would bring massive tankers through their waters.
“That’s all we’re asking,” Keir said. “In Canada, for the LNG [project] to move forward, it had to go through a very stringent environmental study both provincially and federally.”
While Calais LNG works to clear regulatory hurdles before breaking ground, natural gas is already flowing through its neighboring province’s Brunswick pipeline, Keir said.
A state-backed pipeline through Maine would allow Canada to export natural gas to energy-hungry southern New England and possibly beyond.
Baldacci aides point out that they support bringing LNG facilities to Maine and are proceeding cautiously with their corridor plan. No cash has been appropriated to the corridor project, and its actual route has not even been studied.
“It would be very premature to say that this intended to promote or encourage or block LNG or any other form of energy,” Public Advocate Davies said.
It is not clear whether renewable energy projects would reap as many immediate benefits as traditional fossil fuels if either pipelines or transmission cables are built. In a Feb. 17 joint letter to Obama and Canadian Prime Minister Stephen Harper, Baldacci and New Brunswick Premier Shawn Graham pitched a reliable transmission conduit “with an emphasis on renewable power,” but also “important bridge fuels such as petroleum products and natural gas.”
Renewable energy, not including hydroelectric power, accounts for 24 percent of Maine’s electricity generation, according to U.S. Energy Information Administration – more than any other state. Since January, two developers have filed for permits to build massive wind farms in Lincoln and Oakfield.
Although Buxton said he supports energy corridors that reduce energy costs for consumers in Maine, he notes that conservation would generate environmental and economic benefits more quickly than simply “putting steel in the ground.”
Weatherization is one way to lower peak energy use, and the governor has set a far-reaching goal of weatherizing all Maine homes by 2030, partly using the revenue that would be gained from leasing out the energy corridor. But there are other methods on the cutting edge of energy technology that the state could also use.
Buxton points to demand-response technology, which is relatively cheap to install, as an underused way of saving electricity. Using smart meters installed in homes and businesses, the electrical grid could tell users when demand is highest, allowing heaters and air conditioners that don’t immediately need the power to shut off until demand retreats.
Because a region’s power grid is designed to meet peak demand, a system of smart meters could potentially avoid the need for new power plants or electricity imports from neighbors, Buxton says.
John Kerry, director of the Governor’s Office of Energy Independence and Security, says the governor understands the importance of conservation in reducing the state’s energy burden and lowering costs for businesses, which is why he submitted his efficiency and weatherization plans together with the state energy projects that would finance them.
“When businesses are trying to locate in Maine or relocate in Maine they look at the cost of energy,” Kerry said. “The governor has made it eminently clear that he wants tangible economic and environmental benefits to come from the development of these corridors.”
Buxton says Maine industries would like to see more local energy projects combined with efficiency upgrades that would save them money before it imports or transports energy through the state. That means combining renewable energy, natural gas, computer models and demand-response conservation incentives.
“With the rising price of energy, people are becoming very creative about how they can lower their costs,” he said. “The magic of the grid is its diversity.”
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