Biomass incentives from state will yield big returns for Maine, analysis reveals

In 2016, Maine lawmakers wagered that incentives to stabilize the biomass electric industry and preserve the jobs and forest health benefits the industry supports would pay off. This past week we learned they were right.

Contracts to stabilize the industry were awarded in late 2016 to ReEnergy’s Ashland and Fort Fairfield biomass plants and the West Enfield and Jonesboro plants that Stored Solar purchased after former owner, Covanta, shut them down. As part of the deal, up to $13.4 million in tax dollars were made available over two years to incentivize those contracts, but it was only last week that an analysis of the return on the investment became available, as the BDN outlined in a recent article.

That article found that “the order released Wednesday summarized a consultant’s findings that each dollar of bailout should generate $18.52 back in economic benefits to the state.”

What that means is that the $13.4 million investment is expected to generate more than $248 million in total economic activity over two years, and it will sustain more than 280 jobs in logging and trucking and at the plants.  

Simply stated, this provides an 18 to 1 return on investment for Maine, and it does not take into account the other indirect employment and familial benefits that are tied to this investment. By any standards, that is a great deal for the state and an example of sound fiscal policy.

Benefits to sawmills, landowners, and pulp and paper facilities also are not taken into account as biomass electric facilities represent revenue streams for every one of these forest-based businesses. Without a market for residuals, wood waste from sawmills, logging and other operations would pile up and end up in landfills, presenting an environmental issue of uncertain proportions. The avoided costs of disposal combined with the loss of revenue from the sale of biomass aren’t quantified here either.  

Perhaps even more important is the fact that ReEnergy chose to keep its Maine facilities going even as it shuttered a biomass facility in New York, and that the two Covanta biomass plants that were shut down in spring 2016 have now been restarted by a new owner. The long-term benefits of active biomass plants versus more vacant mill sites in the state cannot be overstated.

The Professional Logging Contractors of Maine advocated strongly for this decision last year, and our members are grateful for the bipartisan support from Gov. Paul LePage and the Legislature that made it possible. It took a tremendous amount of leadership and courage for the legislative and executive branches to come together, but in this case, they got it right.

Now, more loggers are working in the Maine woods and more trucks loaded with biomass are rolling to mills than would have been possible had this not occurred. Biomass alone cannot sustain a logging company, but without the revenue it generates and the forest management practices it allows the outlook for Maine’s rural economy and forest health would be poorer.

We applaud those who supported this decision, and we applaud the BDN for bringing the economic benefits of the decision to light.

Dana Doran is the executive director of the Professional Logging Contractors of Maine.