Taxpayers and ratepayers have doled out more than a quarter of a billion dollars over the past decade to prop up Maine’s biomass power industry, which cannot compete economically without subsidies and is among the state’s top polluters, according to a new report by an anti-biomass advocacy group.
The report, by the Massachusetts-based Partnership for Policy Integrity, argues that while Maine’s biomass industry has received over $250 million in subsidies and grants since 2008, the payments have done little to stop the bleeding of jobs and tax revenue from an industry that generates electricity too dirty to be eligible for clean energy subsidies in some neighboring states, and too expensive to compete with alternatives in the free market.
It says Maine’s biomass facilities, including some receiving renewable energy subsidies worth millions of dollars a year, represent the largest polluters in the state, emitting smog-forming chemicals, particulate matter and greenhouse gases. Meanwhile, asthma in Maine exceeds the national average, incurring costs of over $173 million each year, according to the report.
“Maine policymakers keep asking biomass industry insiders, some of whom are among the greatest beneficiaries of public subsidies, how to keep the biomass industry going,” it says. “Not surprisingly, they keep getting the same answers, usually involving asking for more financial support.”
Bob Cleaves, president and CEO of the Portland-based Biomass Power Association, took issue with the report, saying it is filled with “half-truths and misinformation.” Cleaves said the industry is vital to Maine’s economy because it provides jobs in economically devastated rural areas.
“The Maine Legislature and LePage administration strongly support biomass power because it provides well-paying rural employment in a state where it is urgently needed,” he said. “Biomass power was facing uncertain times following a steep decline in the value of our power, and our state legislators took action, for which we are extremely grateful. Maine’s loggers, foresters, landowners and biomass power employees are hard at work today because of this.”
The report acknowledges that bioenergy should have a role in Maine, where facilities burn forest product manufacturing wastes on site for heat and power, thus also avoiding disposal costs. However, it says continued support for standalone wood-burning power plants will only prolong the industry’s financial losses and subsidy dependence by “supporting the lowest-value use of wood – burning it.”
“As atmospheric carbon dioxide continues to increase, and climate change effects deepen, policymakers should commission independent, science-based studies to help Maine value forests as carbon storage, rather than as fuel,” the report says.
Maine’s sawmills and paper mills have burned biomass to generate on-site heat and power and dispose of industrial wastes for more than a century.
But the report argues that in recent decades, as traditional forest-based manufacturing has declined, Maine’s biomass power sector has become increasingly dominated by wood-burning power plants built exclusively to generate electricity for the grid. Not affiliated with any manufacturing operation, those plants have relied on renewable energy subsidies and tax credits to remain viable, it says.
But subsidies for biomass power are drying up because of its relatively high pollution rate, and the industry is in trouble, according to the report. In response, Maine lawmakers are scrambling to preserve biomass jobs, most recently with a controversial $13.4 million public money bailout of four biomass plants in 2016, it says.
A legislative commission appointed to examine the benefits of the biomass industry has recommended even more subsidies for the industry, the report says.
“Yet almost none of the discussion about Maine’s biomass sector has addressed the real financial costs of biomass energy, or its impacts to forests, air quality and the climate,” it says. “As Maine policymakers weigh granting still more public funds to the bioenergy sector, they should consider these costs.”
The report includes a detailed breakdown of how taxpayer and ratepayer funds have been used to prop up Maine’s biomass power industry since 2008:
• Over 90 percent of ratepayer-funded Renewable Energy Credits in Maine have gone to aging biomass power plants, totaling more than $68 million.
• State and federal grants totaling $15 million were made to the Verso Bucksport mill for expanded bioenergy. The facility closed a year after receiving the grants.
• Other federal grants, including to a failed biofuels venture, total over $30 million. The equipment from that facility was later put up for auction.
• The federal Biomass Crop Assistance Program allocated over $35 million in matching payments for deliveries of bark and chips to biomass power plants in Maine. Some recipients were later seated on the state’s 2016 commission to study the benefits of the biomass industry, which recommended that the state grant more subsidies to the industry.
“There is almost no kind of subsidy that has not been tried,” the report says.
Still, the report fails to acknowledge the vital economic role that standalone biomass power plants play in Maine, according to Carrie Annand, executive director of the Biomass Power Association.
“The Maine biomass industry creates local, rural employment – about five jobs per megawatt, or 1,300 jobs, when plants are fully operational,” she said.
Annand noted that biomass plants are the largest taxpayers in many rural Maine towns, and that they account for roughly $10 million to $20 million in annual economic impact per facility.
They also reduce the state’s reliance on fossil fuels, she said.
“The Maine biomass industry provides New England with more than 300 megawatts of baseload, sustainable, affordable, renewable energy,” Annand said.