MECEP supports LD 553 because it is in Maine’s best economic and environmental interests to reduce its dependency on oil.
Maine energy costs are higher than the national average, and approximately 60% of Maine’s electric generation capacity is tied to a non-indigenous source, such as oil.1 Indeed, Maine is one of the most oil dependent states because of its reliance on oil for transportation and heating. Transportation accounts for 54% of Maine’s oil consumption, with residential, commercial, and industrial consumption accounting for an additional combined 44%.2
Reducing our dependency on oil helps ensure that households and businesses can purchase alternative sources of energy, ideally produced by Maine workers, thereby saving money, increasing investment, and enhancing job creation efforts. Energy efficiency efforts alone, for example, could save the State more than $450 million in energy costs.3 Moreover, decreased dependency on oil will mean Maine is more immune to instability in the global oil market, which has experienced wild fluctuations in prices over the past few years. As the former Director of the Governor’s Office of Energy Independence and Security noted, every $1 increase in the gallon of oil means Maine exports about $1 billion from its economy. This is not good for economic growth, Maine residents, and Maine businesses.
We sincerely hope the Efficiency Maine Trust and Governor’s Office of Energy Independence and Security, as part of their plan, will consider mechanisms that mitigate any possible increased costs that low-income consumers may face as the State reduces its dependence on oil. These households already pay a disproportionately high share of their income on necessities such as energy costs.
I will leave the discussion of the environmental impacts of decreasing our dependence on oil to the many other organizations here to do so, but MECEP supports the arguments in support of those environmental benefits, as well as the economic benefits. The unanimous work of this committee over the last several years has already produced big gains for Maine jobs, pocketbooks, and our clean air and climate future, and this bill provides you an excellent opportunity to build on that work.
Thank you for the opportunity to testify, and I am happy to answer any questions members of the Committee may have.
Dan Coyne, Fiscal Policy Analyst, speaking before the legislature’s Joint Standing Committee on Energy, Utilities and Technology in favor of LD 553, “An Act to Reduce Maine’s Dependence on Oil.”
1 “Final Report of the Ocean Energy Task Force to Governor John E. Baldacci,” State Planning Office, December 2009. http://www.maine.gov/spo/specialprojects/OETF/Documents/finalreport_123109.pdf.
2 U.S. Department of Energy, Energy Information Administration, State Energy Data System, 2007 data.
3 Charles Colgan, Samuel Merrill, and Jonathan Rubin: “Energy Efficiency, Business Competitiveness, and Untapped Economic Potential in Maine”, Muskie School of Public Services, University of Southern Maine, and University of Maine, April 3, 2008.
