PLC issues statement on Maine biomass industry and Covanta Energy shutdown

AUGUSTA – The Professional Logging Contractors (PLC) of Maine issued a statement today urging the LePage administration and legislative leaders to take action to sustain Maine biomass electricity production in the wake of news that Covanta Energy plans to shut down its two Maine biomass plants, affecting more than 2,500 jobs in the state’s logging industry.

Covanta operates two of the six large stand-alone biomass electricity plants in Maine, and plans to shut down both in March due to lower fossil fuel prices that have weakened demand for biomass energy.

The announcement of the impending closings of Covanta’s Jonesboro and West Enfield plants is a huge blow to the logging industry in Maine, which has sold woody biomass waste from logging operations to the plants for years. With the announcement by Covanta, only four large biomass electricity plants, all owned by ReEnergy LLC, will remain in operation in the state.

“This announcement should serve as a wake up call to both the LePage administration and Maine legislators about the dangers of inaction when it comes to formulating energy policies that will benefit our state’s economy, environment, and future,” PLC Executive Director Dana Doran, said. “This is a perfect example of an area where common sense needs to be applied to policy to consider the true cost of our energy, not just the price per kilowatt hour.”

The shutdown of the two Covanta plants will have an immediate and direct effect on a large percentage of Maine loggers. Job losses as a result of the closures will be devastating for some logging companies and the effects will be worse coming on the heels of paper mill closures in 2015 that have already placed strains on the industry by limiting markets for wood fiber.

The recent and rapid decline in the price of natural gas has cut deeply into demand for biomass, and Maine loggers saw the market tighten significantly in the second half of 2015. In addition, expiring renewable energy subsidies in Massachusetts and Connecticut have the potential of eliminating the market for Maine biomass altogether as soon as 2017.

Biomass is responsible for 25 percent of Maine’s overall power supply and represents 60 percent of the state’s renewable portfolio. Wood accounts for almost one-third of New England’s entire renewable supply, with Maine supplying a significant amount to the region, according to the Biomass Power Association.

Biomass electricity is generated by utilizing wood fuel from a variety of sources including woody debris and low grade fiber from forest thinning operations. Fuel gathered in this way provides both a market for low grade fiber and a sustainable source of carbon-neutral energy. In states with renewable energy portfolio requirements woody biomass is very valuable to buyers seeking a percentage of their power from renewable sources.

Unlike renewable energy sources such as wind and solar, biomass has the advantage of being independent of weather as the fuel can be stored and utilized when needed. This reliability accounts in part for its growing popularity in Europe and other areas seeking a larger percentage of their power from renewable sources.

State policies that encourage greater use of biomass in Maine and neighboring states will support local jobs, ensure greater energy security, and reduce fossil fuel emissions. The economic value of a strong Maine biomass industry and the direct and indirect jobs, payroll, and tax revenue it generates will more than offset the current higher cost per kilowatt hour of such energy, while preserving the industry for the day when fossil fuel prices inevitably rise again.

“While this latest news is another challenge for Maine’s logging industry, the PLC and loggers across the state will do all we can to help and to make the best of a tough situation,” Doran said. “Workers at the affected plants have our support and sympathy, and we stand with them and our business partners in the biomass industry in calling for state government to act now to preserve the biomass industry before it is lost.”

In the coming weeks the PLC will be working with its members, biomass electricity producers, the LePage Administration and local legislators to seek solutions to the challenges facing the biomass industry in Maine and the loggers who supply biomass to local mills.