To Bruce Boisvert, it’s all about economics. If he spends $2,000 now to convert the oil-powered furnace at his Royal Road home in Bangor to run on natural gas, he would see a payback in two years.
Boisvert has crunched the numbers and, with oil prices fluctuating unpredictably, his mind is made up.
“It seems like if someone stubs their toe overseas, the price of oil goes up,” the 67-year-old retiree said this week.
So natural gas it is, but there’s a catch. The region’s only provider, Bangor Gas, has not installed fuel lines in his neighborhood.
“I called and asked them ‘What can I do to get natural gas here?’” Boisvert said.
As it turns out, Jon Kunz, sales manager for Bangor Gas, has been tracking calls from people like Boisvert for the last several months. The utility company is now using that database to launch an aggressive expansion project in Bangor and beyond.
Click here for a detailed map of the Bangor Gas service area
“We recognize that our growth is in the residential market,” Kunz said this week from Bangor Gas headquarters on Main Street. “But the level of interest will dictate how much we grow.”
So far, Bangor Gas has identified more than 20 streets in Bangor, as well as a handful of streets in Orono, Old Town and Brewer, as probable areas of expansion. Most of the Bangor streets are in the Fairmount neighborhood, where Boisvert lives, and in the area between State Street and Stillwater Avenue, commonly known as the “tree streets.”
Bangor Gas recently acquired capital funds from its parent company, Gas Natural Inc., formerly Energy West, of Ohio, to expand. In order for the company to build pipeline infrastructure in a cost-effective way, enough residents need to commit to the switch.
That’s where residents like Boisvert come in.
“They told me that I needed 17 signed contracts in my neighborhood. I’ve got six so far,” he said.
Bangor Gas would happily do its own recruitment of new customers, Kunz said, but having committed residents carry some of the water certainly helps.
The rise of gas
Before 1998, when the Maritimes & Northeast Pipeline was constructed to bring gas to Massachusetts through Bangor from the Sable Island gas fields off Nova Scotia, no infrastructure existed.
From that main pipeline, Bangor Gas built a network of smaller pipes in Greater Bangor in 2000 and targeted commercial customers such as the Verso Paper Mill in Bucksport and later Eastern Maine Medical Center.
Over the last few years, the company’s growth has accelerated considerably as the price of heating oil has remained high. In 2008, the firm had seven employees. Now, there are 24.
Among the buildings that converted recently to natural gas are: nearly all Bangor public schools, City Hall, the Central Fire Station, several buildings at Bangor International Airport and Sawyer Arena.
Bangor Finance Director Debbie Cyr said the city spent about $235,000 in October 2008 to convert some of its buildings. Assuming the cost of heating oil averaged $2.50 per gallon over that time, the city has seen $195,000 in savings from the municipal buildings alone, she said.
The Bangor Public Library and the Margaret Chase Smith Federal Building recently have switched to natural gas as well.
Now, Kunz said Bangor Gas wants to bring more residential properties online. The goal is to add 2,000 homes and businesses in 2011.
Oil dealers admit that natural gas has an advantage at the moment, but history has favored heating oil.
“It’s a serious concern whenever you might lose market share,” said Jamie Py, president of the Maine Energy Marketers Association, which represents the state’s oil dealers. “But customers need to consider whether they want to deal with a utility that is owned by an out-of-state entity that may not be as responsive to a local oil company.”
Most people are interested in natural gas for the same reason Boisvert is: cost.
Comparing the costs of gas and oil is a little like apples and oranges because the two fuel sources are measured on different scales, natural gas in therms and oil in gallons. One therm of natural gas produces 100,000 British thermal units, or BTUs, while 1 gallon of oil equals about 138,000 BTUs. Then consider that natural gas averages about $0.98 per therm for residential consumers and oil is averaging about $3.35 per gallon. The savings are evident.
Cost aside, Kunz said natural gas is a clean, efficient and reliable energy source that doesn’t rely on overseas markets for supply.
Py, however, said natural gas is no more efficient or clean than heating oil.
The decision to switch
Boisvert said he’s not rich, but he lives comfortably enough to invest $2,000 to make the switch to natural gas.
Others are not as comfortable and, depending on the age of a homeowner’s heating system, the costs can be higher than $2,000. With the proposed expansion, Bangor Gas would install a service line and meter at no charge, but the rest is up to the consumer.
The city of Bangor has some money available through its residential rehabilitation loan program. Residents who are income eligible can borrow money at 3 percent interest over 20 years to make the improvements necessary to switch to natural gas. Efficiency Maine, a statewide agency dedicated to reducing energy costs, also has incentives available for those who switch to natural gas.
Bangor Gas has set a tentative deadline of April 15 to gather commitments from residents of the streets identified for expansion. Kunz said if approximately half of the residents on an identified street commit to switching, the lines would be installed.
It is likely that the price of natural gas would increase as demand increases, but Kunz said the variables that control pricing of natural gas are fewer than those that control other fossil fuels.
Py said Maine’s oil supply is not tied to overseas markets as much as other states.
Another potential concern as natural gas increases in popularity is safety. Explosions, sometimes deadly, caused by gas leaks have been reported in Massachusetts, Pennsylvania and elsewhere around the country.
Asked whether he was concerned about the safety of natural gas infrastructure, Boisvert said no.
“It seems like old systems, old pipes are causing the problems,” he said.
“Our lines are only 10 years old and they are coated to protect against corrosion,” he said.
Not only that, but all Bangor Gas lines are controlled through a computerized system at the company’s headquarters. That system is monitored 24 hours a day so if any problem shows up, it can be addressed immediately, Kunz said.
“We see ourselves as a bridge to the future,” he said. “Wind, geothermal and other sources of green energy are not ready yet, but we think natural gas is a pretty good option right now.”
Boisvert already is on board and has turned his efforts to convince some of his neighbors to join him.
More information about Bangor Gas’ plans for expansion is available online at bangorgas.com.