Maine can solve its heating oil addiction and create jobs
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William Strauss
When people talk about energy, particularly at the federal level, they think of electricity and transportation. In Maine, those two large sectors account for 61% of our energy use. The other 39% is often ignored in policy discussions: It is the need for heating our homes and businesses over our long cold winters. Mainers are the most dependent on heating oil of any state in the union: 68.7% of heat in Maine is made from oil and 7.6% from propane. The latest Energy Information Administration data shows that 5.0% of Maine's 725,600 housing units have natural gas.
A very optimistic scenario might suggest that by 2020 most of Maine's urban centers will have natural gas. But that will leave a lot of Mainers on oil and propane. According to the U.S. Census, Maine is the most rural state in the nation. So if all the so-called urban population were connected to natural gas that would leave 61%, or 450,000 homes still dependent on expensive fuels.
That is where we as Mainers with a history of using forest resources wisely and sustainably can become independent of imported and expensive fuels, and create jobs and economic growth.
The foundation for a sustainable energy economy based on forest products requires that the forests renew as fast, or faster, than they are harvested. Maine has the highest proportion of certified sustainable forestlands in the United States. Every year, the state of Maine produces tens of millions of tons of new growth in its forests and those tens of millions of tons can be sustainably used for lumber, pulp and fuel.
The conversion of homes from heating oil to Maine-made wood pellet fuel has many benefits. The benefits accrue from three key pathways:
- More than 75% of each dollar spent on heating oil does not stay in the Maine economy. Maine-produced pellet fuel keeps almost 100% of every dollar circulating locally.
- Pellet fuel is half the price of heating oil. The increased disposable income is money that stays in the Maine economy and creates commerce and jobs.
- The supply chain for harvesting sustainable biomass and for manufacturing and distributing the fuel creates jobs.
The environmental benefits are also significant. Particulate emissions from modern, fully automatic pellet boilers are about the same as heating oil boilers. And carbon emissions are much lower.
The major challenges to our state making this shift can be summarized into two categories: the lack of bulk pellet fuel delivery trucks and the cost of new systems.
It is a classic chicken and egg situation in which the boilers cannot be installed without a fuel truck to deliver fuel, and the investment in a fuel truck needs a base of customers to be cost effective.
To help solve this and jump start this sector, U.S. Sens. Angus King and Susan Collins and Rep. Mike Michaud have sponsored bills that would extend the same tax credits that solar and wind now get to high-efficiency pellet boiler systems (the “BTU” act).
At the state level, Efficiency Maine has the opportunity to use funds from the Regional Greenhouse Gas Initiative to provide direct support with significant rebates. New Hampshire already does this with a $6,000 per household rebate.
The job-creation effects for supporting the conversion in Maine are so strong that the increased federal and state taxes from the new jobs and the commerce generated by that money being spent in Maine will be much greater than the cost of those policies.
The permanent jobs created per megawatt-hour (MWh) of energy generated per year are much higher from the use of pellet fuel as compared to electricity from wind power. Wind produces 0.066 permanent jobs per 1,000 MWh/year. Heating our homes from pellet fuel produces 21 permanent jobs per 1,000 MWh/year.
Our continually renewing forests can sustain a conversion of a significant number of Maine's homes from imported oil to low cost Maine-made heating fuel.
William Strauss is president of consultancy FutureMetrics and the chief economist for the Maine Pellet Fuels Association and the Washington D.C.-based Biomass Thermal Energy Council.
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