Professional loggers sound alarm over biomass plant closings
The Professional Logging Contractors of Maine is calling on the LePage administration and legislative leaders to take action to sustain Maine’s biomass electricity production in the wake of news that Covanta Energy plans to shut down its two Maine biomass plants at the end of March.
As reported by the Bangor Daily News, New Jersey-based Covanta Holding Corp. (NYSE: CVA) plans to close its biomass plants in West Enfield and Jonesboro plant indefinitely because of low energy prices. The 29-year-old facilities were acquired by Covanta in 2008 and burn wood waste to generate electricity that’s sold to ISO New England, the newspaper reported.
“Unfortunately, this happens with some frequency in the biomass industry, when energy prices are not sufficient to cover the costs of operation and fuel supply,” company spokesman James F. Regan told the BDN. “We have experienced similar situations in the past and resumed operations when the economics improved. We will continue to evaluate the future of the facilities”
With Covanta’s planned closures, only the four biomass electricity plants owned by ReEnergy LLC will remain operating in the state, the newspaper reported.
“This announcement should serve as a wakeup 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,” Dana Doran, executive director of Professional Logging Contractors of Maine, said in a written statement provided to Mainebiz. “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, according to the PLC of Maine’s statement, especially given the paper mill closures in 2015 that had already strained the industry.
PLC of Maine reported the recent and rapid decline in the price of natural gas has cut deeply into demand for biomass and noted that Maine loggers saw the market tighten significantly in the second half of 2015. Another concern, it said, are the expiring renewable energy subsidies in Massachusetts and Connecticut, which have the potential of eliminating the market for Maine biomass altogether as soon as 2017.
The stakes are high: According to Biomass Power Association, Maine ranks fifth in the United States for the production of biomass power. Biomass is responsible for 25% of Maine’s overall power supply and represents 60% of the state’s renewable portfolio and wood accounts for almost one-third of New England’s entire renewable supply, with Maine supplying a significant amount to the region.
In its statement, PLC of Maine advocates state policies that encourage greater use of biomass in Maine and neighboring states as a way to “support local jobs, ensure greater energy security, and reduce fossil fuel emissions.”
“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.”
The PLC of Maine was formed in 1995 to give independent logging contractors and sole proprietors a voice in a rapidly changing forest industry. Its members are responsible for 75% of the timber that is harvested from Maine’s forests annually, according to the trade group.
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