Energy Policy

Are Maine’s clean energy policies working?

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The Big Picture

Since 2005 Maine’s carbon dioxide emissions have fallen 41 percent, three times faster than the United States as a whole and eight times faster than other developed countries.

Maine is covered almost ninety percent by pine forests, or nearly 18 million acres. Each acre sequesters 1 to 2.5 tons of carbon dioxide per year, or 18 to 45 million tons per year. This far outweighs Maine’s 15 million tons of yearly manmade emissions. Seventy-five percent of electric generation is from carbon dioxide-free sources, including hydro and nuclear power, one of the highest rates in the country.

Eliminating all Maine manmade emissions would impact global temperatures less than one one-thousandth of a degree by 2100. Citizens of Maine, please give yourselves some well deserved credit.

Green Policy Results

At first glance it appears Maine’s clean energy policies have worked. Maine adopted a tax on carbon dioxide emissions from power plants with the revenue used for energy efficiency projects, and mandated the use of wind and solar power. A 65 percent carbon dioxide reduction target from electric generation by 2030 has already been exceeded.

Electric generation from renewable sources such as wood, wind, and solar is 45 percent of total generation, the highest rate in the country with Maine generating two thirds of all the wind power in New England. However, the policy success is an illusion.

Let’s take a closer look.  Most of the carbon dioxide emission reduction came from a reduction in electric generation from fossil fuels. A shortage of natural gas forced a three-fourths reduction in natural gas fired generation. Higher costs and federal regulations also reduced generation from coal and oil by three-fourths. The emissions tax had almost no effect. Furthermore, a claimed efficiency savings of the invested tax revenue reduced carbon dioxide by 4.7 percent, but most of the efficiency savings had little verification and may not hold up to closer inspection. 

Wind power generation increased twenty-four fold. However, two thirds of the added wind power generation simply replaced wood-fired generation.  Federal tax subsidies provided a competitive advantage for wind power while a wood subsidy ended. Wind projects create few permanent jobs while forest industry jobs are critical to the state’s economy. 

Industrial power use dropped 13 percent over the same period further reducing emissions, but the reason for the reduction was real goods production dropped 14 percent.  The fall in goods production was caused, in part, by Maine’s industrial electric price being 30 percent higher than the national average. Clearly the clean energy policies haven’t actually worked, and studies show the same policies haven’t worked elsewhere either.

The Cost

Maine went from being a major electric exporter to producing just enough to meet demand. The value of the lost generation was a $391 to $588 million a year loss to the state’s economy compared to 2005. The economic value of forest products dropped $94 million a year from 2005 to 2017, RGGI allowances added $10 million to electric rates in 2019, and the Renewable Resource Standard cost almost $20 million in 2016.

Lack of Support for Green Policies

Stewardship of our natural world is certainly a good thing. However, a huge divide exists between urban centers divorced from the natural world, and a rural population who daily live in it. The urban population uses virtue signaling through environmental mandates that sound good, but don’t actually work. Meanwhile, rural folks have to live with the visual impacts of mountain top wind turbines that kill birds and bats by the thousands, forests torn by transmission lines, and the economic impact of lost jobs and tourism. 

It is no wonder a target of 3000 megawatts of wind power by 2020 will be missed by 70 percent because of local opposition to having more turbines forced on communities who don’t want them. Governor LePage’s moratorium on new wind projects was the right decision. An economic argument could be made not to build the New England Clean Energy Connect transmission line through the North Woods. However, it is the gut reaction of the people who will be directly impacted that should be heeded.  Vermont has limited new wind projects, and New Hampshire rejected the transmission line connection to Quebec for the same good aesthetic reasons. 

Why should Maine make these sacrifices for Boston liberals? Massachusetts doesn’t want the mess of generating their own electricity. The state currently imports 47 percent of its power. Massachusetts politicians are quick to establish mandates for carbon dioxide reductions as long as the dams are built in Canada, the wind turbines are built in Maine, and the transmission lines tear up Maine forests.

More Bad Policy Decisions are Coming

Governor Mills wants to join the Transportation Climate Initiative, a plan similar to the emissions tax on electric power plants that would initially raise gasoline taxes by up to 17 cents a gallon. That would cost each family about $225 a year to reduce emissions 1 to 6 percent, a fraction of the 19 percent expected savings from improved fuel efficiency standards. 

The revenue would not go to highway repair or construction as current gas taxes do. The money would be spent on electric car, truck, and bus subsidies, and electric vehicle charging infrastructure. Electric vehicles cost twice as much as conventional vehicles. So far, most of the subsidies have gone to people making an average of $125,000 a year who don’t need this financial help, and half the federal subsidies have gone to California. The U.S. Energy Information Agency expects electric vehicle prices to remain high.

Another policy being considered is putting wind projects in the Gulf of Maine. Six studies show visible turbines may have a dramatic negative impact on tourism. The National Marine Fisheries Service has warned of significant reductions in commercial fishing when turbines are present.  Offshore wind projects produce electricity at about two to three times the cost of onshore wind.

The Best Policy Going Forward

The best energy policy for Maine is to end taxes on carbon dioxide emissions, require local approval of onshore wind and ban offshore wind with visible turbines, encourage more biomass electric generation by doubling the value of energy credits, and build a buried natural gas pipeline that won’t permanently scar the landscape to bring clean, low cost power to the state.

The carbon dioxide emissions taxes don’t work, and almost 90 percent of new wind and solar projects built in the U.S. in 2018 were outside state mandates. Let the market work. Further study is needed to see if the gas pipeline should be built by suppliers with long-term purchase agreements from electric generators or by a mandate from the utility commission paid for by electric customers.

About David Stevenson

David Stevenson is the director of the Center for Energy & Environmental Policy at the Caesar Rodney Institute in Delaware. Stevenson has published over 100 analytic studies including a major peer reviewed paper published in the Cato Journal this year titled "A Review of the Regional Greenhouse Gas Initiative." He has worked on issues such as the EPA Clean Power Plan, electric grid reliability, the public policy drivers of energy costs and climate change, and served on President Trump’s Environmental Protection Agency Transition Team.

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