AUGUSTA, Maine (AP) — Norwegian company Statoil announced on Tuesday that it was abandoning a proposed $120 million wind project off the coast of Maine, which industry officials once said could make Maine a leader in offshore wind power, after Republican Gov. Paul LePage's administration maneuvered to reopen the competitive bidding process.
The company said in a statement that changes in terms with the state and scheduling delays "made the project outlook too uncertain to proceed." Statoil said it was focusing on a project in Scotland while continuing to explore the United States' offshore wind market.
Renewable energy industry officials, environmental groups and lawmakers said Tuesday that losing Statoil's project is a significant blow to the state's ability to cultivate an offshore wind industry and doesn't bode well for future investment in the state.
"As a state economy looking to attract investment, this is a sad day for Maine," said Jeremy Payne, executive director of the Maine Renewable Energy Association. "Anytime you have a huge international player that was looking to Maine as a potential host for its investment and it shifts course, that calls into question whether this is a hospitable place for any type of investment."
In January, Statoil gained initial state regulatory approval for a 20-year contract with the state to put four wind turbines 12 miles off the coast. But the company put its project on hold in July after LePage signed legislation to reopen the competitive bidding process to allow the University of Maine to submit a proposal. LePage opposed Statoil's project, saying it would push $200 million in costs onto ratepayers.
An Associated Press review of documents found the administration had also initially floated "a much more aggressive effort to explicitly void" Statoil's agreement even before its move to reopen bidding became public. In effect, the state would limit the amount that home and business owners would pay for the project to about half of what Statoil had proposed.
The governor's top energy official said Tuesday that Statoil has long expressed concerns about the U.S. regulatory environment. He said it was prudent for the state to consider other proposals for a contract that will require a 20-year commitment from ratepayers.
"At this point, we still want to move forward with Maine's offshore wind industry in a manner that makes sense for ratepayers," said Patrick Woodcock, director of the governor's energy office. "At a time when our economy is struggling, we need to be certain that this investment will bring Maine's jobs along with it."
Statoil's decision to leave Maine means that the University of Maine's proposal is now the only project being considered for a state contract. While UMaine and its partner companies submitted a bid in August, their proposal remains confidential. The Public Utilities Commission recently ruled that the university must release some details by the end of this month.
Maine Aqua Ventus, the umbrella company that includes the university and the partner companies, said in a statement that it will continue pursuing its contract and remains committed to developing Maine's offshore wind potential.
But the lack of publicly available information about UMaine's proposal creates uncertainty about whether any contract will move forward, said Sean Mahoney, executive vice president and director of the Conservation Law Foundation of Maine.
"Without any information it's hard to know what the technical and financial capacity is for the UMaine proposal," Mahoney said.
Democratic Senate President Justin Alfond said that while he hopes the university's proposal will advance, he is fearful that the state could be left with no offshore wind projects.
"There's definitely a dark cloud over the state of Maine with Statoil leaving today," he said, "and I don't know if we ever recover fully from this in our offshore wind industry."
Follow Alanna Durkin on Twitter at http://www.twitter.com/aedurkin
Related on HuffPost:
Top Renewable Energy Sources
Renewable energy made up 9 percent of all energy consumed in 2011, according to the <a href="http://www.eia.gov/">U.S. Energy Information Agency</a>, and that number is <a href="http://www.eia.gov/forecasts/aeo/er/pdf/0383er(2013).pdf">predicted to grow throughout the next decade</a>. Here's a breakdown of the top sources of renewable energy in the country, from wind to water and everything in between. <em>Information courtesy of the <a href="http://www.eia.gov/totalenergy/data/annual/perspectives.cfm">U.S. Energy Information Agency</a>.</em>
Solar Power - 2 Percent
Solar power and photovoltaic cells make up the smallest percentage of U.S. renewable energy production, but its future looks fairly promising. Warren Buffett's Berkshire Hathaway <a href="http://www.huffingtonpost.com/2013/01/03/warren-buffett-solar-power_n_2398816.html">invested $2.5 billion in Calif. solar company SunPower</a> earlier this year. Also, unlike other sources of renewables, energy can also be generated by small-scale solar installations (like on the rooftop of a home or business), and<a href="http://www.eia.gov/todayinenergy/detail.cfm?id=8570"> declining costs</a> have made solar much more affordable. <em>Information courtesy of the <a href="http://www.eia.gov/totalenergy/data/annual/perspectives.cfm">U.S. Energy Information Agency</a>.</em>
Geothermal - 2 Percent
Geothermal power captures naturally occurring heat from the earth to turn it into power. The renewable source is geographically dependent, <a href="http://www.eia.gov/todayinenergy/detail.cfm?id=3970">but the Western half of the U.S.</a> has many promising locations for power plants, <a href="http://www.geysers.com/">like The Geysers in Calif.</a>, the largest geothermal power plant in the world. The U.S. is the largest producer of geothermal power on the planet, but growth hasn't kept up with wind or solar development in recent years. <em>Information courtesy of the <a href="http://www.eia.gov/totalenergy/data/annual/perspectives.cfm">U.S. Energy Information Agency</a>.</em>
Waste - 5 Percent
Believe it or not, burned garbage accounts for 5 percent of all renewable energy created in the U.S. each year. More than 29 million tons of municipal solid waste was burned in 2010 to create steam to spin turbines and generate power, <a href="http://www.eia.gov/todayinenergy/detail.cfm?id=7990"> and there are more than 75</a> waste-to-energy plants in the country. Emissions regulations have been in place at waste incineration plants since the 1960s, but the <a href="http://www.epa.gov/ncer/publications/research_results_needs/combustionEmmissionsReport.pdf">EPA warned in a 2006 report that the toxins released</a> during the process could pose a serious environmental risk if not strictly enforced. <em>Information courtesy of the <a href="http://www.eia.gov/totalenergy/data/annual/perspectives.cfm">U.S. Energy Information Agency</a>.</em>
Wind - 13 Percent
The amount of wind power has grown for each of the past three years throughout the U.S. and accounted for the <a href="http://www.eia.gov/todayinenergy/detail.cfm?id=9931">largest growth in capacity</a> of any energy resource in the country last year. Wind turbines now supply more than <a href="http://www.reuters.com/article/2012/10/19/us-utilities-windpower-usa-idUSBRE89I0TX20121019">50,000 megawatts a year,</a> enough to power 13 million homes, according to Reuters. Federal tax credits, which were set to expire at the end of 2012, have made wind farms an attractive form of renewable energy. Congress <a href="http://www.forbes.com/sites/davelevitan/2013/01/02/wind-power-tax-credit-survives-fiscal-cliff-deal/">approved an extension of the credits</a> through the end of 2013. After production, wind turbines are net zero, meaning they require no energy and produce no emissions. The only problematic thing generated in some cases other than clean power has been <a href="http://www.huffingtonpost.com/2011/05/24/wind-power-noise-pollution-maine_n_866182.html">a whole lot of noise</a>. <em>Information courtesy of the <a href="http://www.eia.gov/totalenergy/data/annual/perspectives.cfm">U.S. Energy Information Agency</a>.</em>
Biofuel - 21 Percent
Biofuels, like ethanol, are created from organic matter like corn or soybeans. Gasoline in the U.S. contains 9 percent of the resource by federal mandate under the <a href="http://www.epa.gov/otaq/fuels/renewablefuels/index.htm">Renewable Fuel Standard program,</a> and more than <a href="http://www.huffingtonpost.com/2012/08/10/us-should-change-biofuel-_n_1764735.html">40 percent of the corn crop</a> last year was turned into biofuel. The resource is slightly more unstable than other renewables because it depends on the productivity of farms - <a href="http://www.huffingtonpost.com/2012/08/10/us-should-change-biofuel-_n_1764735.html">drought or other environmental problems</a> can significantly lower yields and increase prices. On average, <a href="http://www.afdc.energy.gov/vehicles/flexible_fuel_emissions.html">ethanol has 20 percent fewer emissions</a> than traditional gasoline but some types, like <a href="http://en.wikipedia.org/wiki/Cellulosic_ethanol">cellulosic ethanol,</a> cut greenhouse gas emissions more than 85 percent, according to the U.S. Department of Energy. <em>Information courtesy of the <a href="http://www.eia.gov/totalenergy/data/annual/perspectives.cfm">U.S. Energy Information Agency</a>.</em>
Wood - 22 Percent
Timber accounts for nearly a quarter of all renewable energy created in the country. <a href="http://news.nationalgeographic.com/news/energy/2012/10/121022-wood-for-heating/">Rising energy costs </a>have led to an upswing in wood burning over the past decade, and nearly <a href="http://www.eia.gov/forecasts/steo/report/winterfuels.cfm">20 percent of New England homes </a>use wood for heating, according to a National Geographic report. Although it may be a cheaper alternative, wood burning stoves and fireplaces<a href="http://www.epa.gov/burnwise/energyefficiency.html"> release more emissions of fine particles </a> than other home heating methods, according to the EPA. Burning <a href="http://www.epa.gov/burnwise/bestburn.html">good wood in an efficient burner</a> lowers toxic emissions and lost energy. Oh, and always have working smoke and carbon monoxide detectors handy. <em>Information courtesy of the <a href="http://www.eia.gov/totalenergy/data/annual/perspectives.cfm">U.S. Energy Information Agency</a>.</em>
Hydroelectric - 35 Percent
Almost all of the current hydroelectric power plants in the U.S. were <a href="http://www.eia.gov/energy_in_brief/article/hydropower.cfm">built before the mid-1970's</a>, but it's still the highest producing renewable energy source in the country. In 2011, 8 percent of all power created in the U.S. came from hydroelectric sources, but it's also one of the most geographically dependent sources of energy. The Pacific Northwest gets more than half of all power via hydroelectric due to prime geography. <em>Information courtesy of the <a href="http://www.eia.gov/totalenergy/data/annual/perspectives.cfm">U.S. Energy Information Agency</a>.</em>
How To Really Go Renewable
Watch this TED talk on the missing link in the future of renewable energy.