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Governor Asks Massachusetts to Reconsider Rule Hurting Maine's Forest Industry

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According to a report this week by the Portland Press Herald, Portland, Me., USA, new renewable energy standards in Massachusetts are adding to the problems of Maine’s logging industry, which is already threatened by the collapse of the biomass market and recent closure of pulp and paper mills.

Governor Paul LePage (R) of Maine is asking Massachusetts Gov. Charlie Baker (R) to reconsider a rule change that went into effect on January 1 that kicked two biomass electricity plants in Washington County out of a program that awards higher payments for renewable energy. The two plants closed last month, putting 44 people out of work and further squeezing the region’s loggers, who are struggling to find buyers for low-grade wood and byproduct wood from cutting lumber.

Maine’s paper industry is grappling with declining demand and cheaper imports. In less than two years, four mills have shut down, and another will close next month.

Steve Hanington, who runs a logging company in southern Aroostook County, said the closed biomass plants were two of his remaining customers.

"We keep chasing what’s left, and now there’s nothing left," he said.

By the end of April, he said, 30 of the 70 loggers that work for his company will be out of a job.

By summer, as many as a 1,000 of the state’s 5,000 loggers could be out of work because of the decline in demand for wood, according to a Maine logging contractor trade association.

Biomass power plants create electricity by burning waste wood from saw mills and low-grade wood, such as branches and treetops. Because of the rule change in Massachusetts, biomass facilities can only receive extra payments awarded for renewable sources if they can also capture surplus heat and put it to use, such as heating an adjacent facility. The two Covanta facilities in Washington County do not meet this standard.

Four other biomass plants in Maine are at risk of closing if renewable energy credits in Connecticut are phased out starting in 2018. The rule change in Massachusetts played a role in Covanta Energy’s decision to shut downs the plants, but a bigger factor was the plummeting wholesale electricity market, said company spokesman James Regan. The Massachusetts rule creates an obstacle as Maine officials work to save jobs in rural Maine, said Patrick Woodcock, director of the governor’s energy office.

"This is an additional challenge that we think warrants a review," Woodcock said.

He said officials from Maine and Massachusetts have discussed the issue several times, and LePage spoke to Baker about it when the two met in February at a meeting of Republican governors in Washington, D.C. A Baker spokeswoman said the governor is looking forward to working with others in the region to ensure that the state meets its goal of reducing greenhouse gas emissions 25% by 2020.

But the new rule has nothing to do with greenhouse gases and only addresses efficiency standards, said Robert Cleaves, president of the Biomass Power Association.

"You would think the environmental community would care about the rural health in Maine – not just the environmental but the economic," he said.

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