July 5, 2004
Time for change | A look at the economic history of western Maine — and why the region is poised for growth
By Scott Christiansen
Executive director, River Valley Growth Council, Rumford
Four years ago, the River Valley Growth Council (representing Rumford, Mexico, Peru and environs) set itself the task of fundamentally reorganizing the economy of western Maine and doing whatever it took to bring prosperity to the region.
Plainly speaking, it was not a logical task for the Growth Council to take on. The council, after all, had no staff and few resources beyond tenaciousness and optimism. Still, they raised a modest amount, hired an executive director ˆ yours truly ˆ and began the work at hand. In its first few months with a staff, the Growth Council accumulated information that showed, surprisingly, that the council had set itself to exactly the right task at exactly the right time, and actually had a fair chance of being at least partially successful. Skeptics abound, of course, but it is worth reviewing what the Growth Council is doing and the rationale behind our actions ˆ because if we are correct, a boom is coming to western Maine.
One of the first things we did was to take a survey of the historical economy of western Maine. Cobbling together information from several sources ˆ by far the best work in the field is Reflections in Bullough's Pond: Economy and Ecosystem in New England by Diana Muir (University Press of New England, 2002) ˆ the Growth Council came to four important conclusions: First, the economy of western Maine is fundamentally a natural resource-based economy, and has been for some 200 years. Second, the economy of western Maine has more or less operated on a boom-bust cycle that has up-legs and down-legs of about 50 years each. Third, during each bust there is an economic reorganization and, at the trough of each bust cycle, a fundamental shift in resource exploitation practices that enables the following boom. Fourth, the last bust seems to have ended in late 2001 ˆ meaning that we may now be three years into a 50-year economic expansion.
Those familiar with Maine's history will know that 250 years ago there was no Maine ˆ there was just a very large Massachusetts that was later subdivided. At this time, people were slowly pushing north. The practice of the time was for would-be farmers to acquire land through grant or very favorable price with the condition that the farmer was required to clear a section of the land every year and put it into production in order to keep it. Thus it was that over the next 50 years a very significant portion of western Maine was slowly turned into farmland. This farm land provided the basis for Maine's first real economy and first real boom ˆ farm products.
Few people today know that western Maine once was America's breadbasket, but there was a time when wagonload after wagonload of wheat went south to feed the young nation. This lucrative market declined with the 1825 opening of the Erie Canal, which brought cheaper wheat from the west. But the nimble Yankee farmers switched to growing hops to supply Boston's huge number of breweries, and they did this profitably for many years, with the boom peaking in about 1850.
The following bust cycle was fairly gentle, and saw significant reorganization in natural resource utilization as entrepreneurs turned from farm to forest. Aside from its increasingly numerous and efficient sawmills, Maine also became the world's leading producer of excelsior during this time period. Excelsior, the indispensable packing material of its time (still used for packing fine wine), was made by razor-slicing thin strips of birch and poplar into wads of strands. During this period, shoe manufacturing plants were set up in many parts of Maine, including western Maine. The shoe manufacturing and textile operations fit the "natural resource" aspect of Maine's economy in that they relied upon Maine's hydro power to turn their gears. Still, Maine (and all of New England) was to the world then what China is today ˆ Maine shoe factories bought boatloads of leather from around the world and sent back boatloads of shoes.
The next boom cycle for western Maine started around the dawn of the 20th century, when manufacturing on a truly significant scale was introduced in the form of paper mills. This source of significant employment dwarfed all other economic activities and peaked, on an employment basis, in about 1952. The hard bust and economic reorganization of Maine since 1950, including the shift to a service economy, the dramatic loss of employment in the manufacturing sector, etc., is known first-hand by most and does not need to be recounted here.
Room for expansion
The recognition of a pattern in the western Maine economy left the Growth Council asking a question that is familiar to many in Maine: What fundamentally new and different thing can we do with our natural resources that will enable very significant growth for the next couple generations?
Seeking to enable a 50-year economic expansion, the council took an inventory of our natural resources (our air, water, land and trees), then turned to studying forecasts of what the world will need in the next 50 years. What emerged is very much a bad-news, good-news scenario. The bad news is that the world is expected to experience severe population, resource and environmental pressures over the next 50 years. The good news is that the world will very much want western Maine's abundance of land and water, especially our aquifers and springs. In a new twist, the world also wants the relative security that derives from our low population density and our ability to live off-grid if we must. Finally, initial speculation indicates a relatively mild impact for Maine in many global-warming scenarios ˆ which encourages in-migration if those scenarios come to fruition.
All of this foretells a very healthy influx of population over the next 50 years, leading to small booms in the real estate, service and health sectors. But an influx of population is different from a fundamental change in natural resource exploitation, so the Growth Council kept looking for the key to powerful economic expansion until we arrived at the one thing the world will overwhelmingly need in the next 50 years: energy and, more specifically, sustainable and secure alternatives to liquid petroleum and the thousands of products derived from liquid petroleum.
With this in mind, the Growth Council asked the obvious question: Is there any link between our most significant resource ˆ trees ˆ and the ability to produce oil substitutes? It took almost a year to answer the question fully, but the answer was a positive one that gave us strategic direction and leadership in what has become our signature effort to commercialize technologies that convert biomass into fuels, fuel additives, lubricants, chemicals, flavorings, pharmaceuticals, etc.
In the two years since the Growth Council decided to concentrate on biomass conversion strategies, we have formed a technical alliance with a federal government laboratory that specializes in renewable technologies, we have formed a consortium with large industrial partners to pursue the pilot-phase testing of an integrated bio-refinery (a factory that turns wood into oil, and turns that oil into high-value chemicals, fuel-additives and hydrogen), and joined with two universities to form a biomass research and commercialization center (the Fractionation Development Center) that will attract companies to Maine by helping them turn area biomass into products that the world needs.
The route that the Growth Council has chosen is a difficult one, and it is made even more difficult by the natural product of two generations of economic contraction ˆ a bumper crop of pessimists and a huge amount of inertia that must be overcome. Moreover, there is a shortage of state funds available to facilitate the reinvention of western Maine's industrial economy.
Still, progress is being made. Two forest bio-product companies recently announced they will start operations in the river valley. Interest and participation by large industrial companies continues to grow, and additional technical partners are being attracted to the effort. But most intriguing of all is the partnership that is emerging between the Growth Council, the University of Maine and the State University of New York at Syracuse to work with the paper industry to provide the technology for the industry to evolve away from its current manufacturing processes. The goal is for paper mills essentially to become bio-refineries that produce paper, fuels, fuel additives and chemicals, while significantly reducing their cost of production and almost eliminating their waste stream.
It could be that we have chosen a path that, though promising, will end in failure ˆ this is the fate of many similar efforts. However, early indications do not suggest an effort that will fail. World oil consumption is at record levels and still increasing, while even mainstream magazines like National Geographic feature pieces on the finite nature of oil resources. In the two years that the council has pursued our project, oil has doubled in price; with the emergent Saudi civil war and the global radical Islamic jihad, informed opinion expects oil prices to double again in the next five years. Each time oil prices rise, interest in biomass conversion increases significantly as trees are increasingly perceived as domestic, secure, renewable above-ground oil reserves.
Obviously, the prospects for growth in western Maine have a great deal to do with global dynamics; any eventual success will not be a reflection of Growth Council wisdom as much as a reflection that western Maine is in the happy circumstance of being in the right place with the right stuff at the right time. But taken altogether, and given the waxing influx of population and steadily rising property values in western Maine, the feeling has taken root that, after 50 years of economic contraction, it is once again western Maine's turn to grow and prosper.
Four years ago, the River Valley Growth Council (representing Rumford, Mexico, Peru and environs) set itself the task of fundamentally reorganizing the economy of western Maine and doing whatever it took to bring prosperity to the region.
Plainly speaking, it was not a logical task for the Growth Council to take on. The council, after all, had no staff and few resources beyond tenaciousness and optimism. Still, they raised a modest amount, hired an executive director ˆ yours truly ˆ and began the work at hand. In its first few months with a staff, the Growth Council accumulated information that showed, surprisingly, that the council had set itself to exactly the right task at exactly the right time, and actually had a fair chance of being at least partially successful. Skeptics abound, of course, but it is worth reviewing what the Growth Council is doing and the rationale behind our actions ˆ because if we are correct, a boom is coming to western Maine.
One of the first things we did was to take a survey of the historical economy of western Maine. Cobbling together information from several sources ˆ by far the best work in the field is Reflections in Bullough's Pond: Economy and Ecosystem in New England by Diana Muir (University Press of New England, 2002) ˆ the Growth Council came to four important conclusions: First, the economy of western Maine is fundamentally a natural resource-based economy, and has been for some 200 years. Second, the economy of western Maine has more or less operated on a boom-bust cycle that has up-legs and down-legs of about 50 years each. Third, during each bust there is an economic reorganization and, at the trough of each bust cycle, a fundamental shift in resource exploitation practices that enables the following boom. Fourth, the last bust seems to have ended in late 2001 ˆ meaning that we may now be three years into a 50-year economic expansion.
Those familiar with Maine's history will know that 250 years ago there was no Maine ˆ there was just a very large Massachusetts that was later subdivided. At this time, people were slowly pushing north. The practice of the time was for would-be farmers to acquire land through grant or very favorable price with the condition that the farmer was required to clear a section of the land every year and put it into production in order to keep it. Thus it was that over the next 50 years a very significant portion of western Maine was slowly turned into farmland. This farm land provided the basis for Maine's first real economy and first real boom ˆ farm products.
Few people today know that western Maine once was America's breadbasket, but there was a time when wagonload after wagonload of wheat went south to feed the young nation. This lucrative market declined with the 1825 opening of the Erie Canal, which brought cheaper wheat from the west. But the nimble Yankee farmers switched to growing hops to supply Boston's huge number of breweries, and they did this profitably for many years, with the boom peaking in about 1850.
The following bust cycle was fairly gentle, and saw significant reorganization in natural resource utilization as entrepreneurs turned from farm to forest. Aside from its increasingly numerous and efficient sawmills, Maine also became the world's leading producer of excelsior during this time period. Excelsior, the indispensable packing material of its time (still used for packing fine wine), was made by razor-slicing thin strips of birch and poplar into wads of strands. During this period, shoe manufacturing plants were set up in many parts of Maine, including western Maine. The shoe manufacturing and textile operations fit the "natural resource" aspect of Maine's economy in that they relied upon Maine's hydro power to turn their gears. Still, Maine (and all of New England) was to the world then what China is today ˆ Maine shoe factories bought boatloads of leather from around the world and sent back boatloads of shoes.
The next boom cycle for western Maine started around the dawn of the 20th century, when manufacturing on a truly significant scale was introduced in the form of paper mills. This source of significant employment dwarfed all other economic activities and peaked, on an employment basis, in about 1952. The hard bust and economic reorganization of Maine since 1950, including the shift to a service economy, the dramatic loss of employment in the manufacturing sector, etc., is known first-hand by most and does not need to be recounted here.
Room for expansion
The recognition of a pattern in the western Maine economy left the Growth Council asking a question that is familiar to many in Maine: What fundamentally new and different thing can we do with our natural resources that will enable very significant growth for the next couple generations?
Seeking to enable a 50-year economic expansion, the council took an inventory of our natural resources (our air, water, land and trees), then turned to studying forecasts of what the world will need in the next 50 years. What emerged is very much a bad-news, good-news scenario. The bad news is that the world is expected to experience severe population, resource and environmental pressures over the next 50 years. The good news is that the world will very much want western Maine's abundance of land and water, especially our aquifers and springs. In a new twist, the world also wants the relative security that derives from our low population density and our ability to live off-grid if we must. Finally, initial speculation indicates a relatively mild impact for Maine in many global-warming scenarios ˆ which encourages in-migration if those scenarios come to fruition.
All of this foretells a very healthy influx of population over the next 50 years, leading to small booms in the real estate, service and health sectors. But an influx of population is different from a fundamental change in natural resource exploitation, so the Growth Council kept looking for the key to powerful economic expansion until we arrived at the one thing the world will overwhelmingly need in the next 50 years: energy and, more specifically, sustainable and secure alternatives to liquid petroleum and the thousands of products derived from liquid petroleum.
With this in mind, the Growth Council asked the obvious question: Is there any link between our most significant resource ˆ trees ˆ and the ability to produce oil substitutes? It took almost a year to answer the question fully, but the answer was a positive one that gave us strategic direction and leadership in what has become our signature effort to commercialize technologies that convert biomass into fuels, fuel additives, lubricants, chemicals, flavorings, pharmaceuticals, etc.
In the two years since the Growth Council decided to concentrate on biomass conversion strategies, we have formed a technical alliance with a federal government laboratory that specializes in renewable technologies, we have formed a consortium with large industrial partners to pursue the pilot-phase testing of an integrated bio-refinery (a factory that turns wood into oil, and turns that oil into high-value chemicals, fuel-additives and hydrogen), and joined with two universities to form a biomass research and commercialization center (the Fractionation Development Center) that will attract companies to Maine by helping them turn area biomass into products that the world needs.
The route that the Growth Council has chosen is a difficult one, and it is made even more difficult by the natural product of two generations of economic contraction ˆ a bumper crop of pessimists and a huge amount of inertia that must be overcome. Moreover, there is a shortage of state funds available to facilitate the reinvention of western Maine's industrial economy.
Still, progress is being made. Two forest bio-product companies recently announced they will start operations in the river valley. Interest and participation by large industrial companies continues to grow, and additional technical partners are being attracted to the effort. But most intriguing of all is the partnership that is emerging between the Growth Council, the University of Maine and the State University of New York at Syracuse to work with the paper industry to provide the technology for the industry to evolve away from its current manufacturing processes. The goal is for paper mills essentially to become bio-refineries that produce paper, fuels, fuel additives and chemicals, while significantly reducing their cost of production and almost eliminating their waste stream.
It could be that we have chosen a path that, though promising, will end in failure ˆ this is the fate of many similar efforts. However, early indications do not suggest an effort that will fail. World oil consumption is at record levels and still increasing, while even mainstream magazines like National Geographic feature pieces on the finite nature of oil resources. In the two years that the council has pursued our project, oil has doubled in price; with the emergent Saudi civil war and the global radical Islamic jihad, informed opinion expects oil prices to double again in the next five years. Each time oil prices rise, interest in biomass conversion increases significantly as trees are increasingly perceived as domestic, secure, renewable above-ground oil reserves.
Obviously, the prospects for growth in western Maine have a great deal to do with global dynamics; any eventual success will not be a reflection of Growth Council wisdom as much as a reflection that western Maine is in the happy circumstance of being in the right place with the right stuff at the right time. But taken altogether, and given the waxing influx of population and steadily rising property values in western Maine, the feeling has taken root that, after 50 years of economic contraction, it is once again western Maine's turn to grow and prosper.
Most Recent
Most Recent
Comments