U.S. Sen. Olympia J. Snowe is pressing the federal government to broaden the use of energy funds to encompass natural gas lines and help pay for a line proposed for the Lincoln and Katahdin region paper mills, she said in a letter released Wednesday.
As it stands now, the U.S. Department of Agriculture offers billions of dollars annually to rural projects such as the expansion of electricity service. Snowe wants the USDA and other federal agencies to allow rural development funds for natural gas, she said in the letter to Agriculture Secretary Tom Vilsack.
Ideally, the federal agencies could use executive orders to honor her request, as this would most quickly free funds that the state could seek, Snowe said.
As tentatively planned by state officials, the new Great Northern Paper Co. LLC mills in East Millinocket and Millinocket, Lincoln Paper & Tissue Co. and several other manufacturers in the Katahdin and Lincoln Lakes regions would get natural gas from a line the state wants to install in two years, Gov. Paul LePage has said.
“It would be a major, major factor in several areas,” LePage said during a visit to the East Millinocket paper mill in October. “It would take enormous pressure off their energy costs. That would create more profit and salary opportunities for their workers, create more opportunities for reinvestment in their facilities, and would allow them greater savings from efficiencies.”
The gas lines could cut heating costs for businesses and residents by a third, LePage said. The pipeline, he said, needs anchor businesses — large manufacturers such as Great Northern Paper and Lincoln Paper & Tissue — to make it viable.
A natural gas advocate, Snowe said that America’s reserves of natural gas now rank second in the world. She said U.S. natural gas is half as expensive as that found in the United Kingdom and a quarter of the price found in Japan.
Yet Maine’s access to natural gas is very limited, Snowe said. A pipeline runs through areas adjacent to the Maritime Pipeline, which flows from Woodland in Washington County to Eliot in southern Maine.
Earlier this year, the Finance Authority of Maine backed a $5.2 million loan to assist Woodland Pulp LLC to construct a 4½-mile pipeline to bring natural gas to that mill. The mill employs 300 and its leaders believe that the natural gas line installation costs will be repaid within a year through lower energy costs, Snowe said.
The Lincoln paper and tissue mill is going to be reconfigured to burn natural gas trucked from Boston, Snowe said. The reconfiguration is expected to eventually save the company 40 percent in energy costs associated with its oil use.
The Lincoln mill could get another 50 percent savings with a pipeline, Snowe said.