As we prepare to usher in a new year, it’s valuable to take stock of the incidents and developments that shaped Maine’s economic conversation in 2013.
It may be too early to tell how big a role some of these developments — such as the state’s big bet on a company’s plan to turn wood waste into a coal alternative or the return after more than 30 years of direct container shipping service between Maine and Europe — will play in Maine’s economic future, but it’s a safe bet they’ll at least continue to generate headlines in 2014.
Here they are, in no particular order.
Tragedy and bankruptcy
The news broke early on July 6. A runaway train owned by the Montreal, Maine and Atlantic Railway carrying oil had derailed in the center of Lac-Megantic, Quebec, causing an explosion that destroyed the town center and killed 47 people. The tragic accident devastated the small town and plunged the Hermon-based railroad into bankruptcy a month later.
It also brought new scrutiny on the practice of transporting oil by rail and likely will result in heightened regulations in Canada and the United States. The railroad’s future remains uncertain as 2013 comes to a close. A new owner likely will be named early in 2014 as an auction for its assets is expected to be complete by the end of January.
When the container ship Reykjafoss docked in Portland on March 13, it marked the state’s first direct shipping connection with Europe in more than 30 years. A month earlier, Eimskip, the Icelandic shipping company, named Portland as its North American headquarters.
Since Eimskip’s arrival, a number of Maine businesses have begun using the service to more easily reach European markets. The state, seeing an opportunity to capitalize on Eimskip’s presence, has created the Maine North Atlantic Development Office within the Maine International Trade Center and is planning a trade mission to Iceland in 2014. It’s hard to put a monetary value on the ability for Maine companies to more easily reach global markets, but the arrival of the Eimskip service is undoubtedly a net positive.
Energy, energy, energy
As in past years, energy continued to be the underlying theme of some of the state’s most important business stories in 2013. Among them is the aforementioned plan by Portsmouth-based Thermogen Industries to produce torrefied wood pellets at facilities in Millinocket and Eastport and ship them to Europe, where coal-fired power plants are subject to government-mandated reductions in their carbon emissions. Thermogen’s plan is a few years old at this point, but 2013 saw the Finance Authority of Maine make a large bet on it when it approved a $25 million loan to the company in October.
Offshore wind also made headlines throughout the year. The University of Maine made history in June when its prototype VolturnUS became the first floating wind turbine to provide electricity to the power grid. Also making headlines was the competition between the UMaine-led consortium, now known as Maine Aqua Ventus, and Norwegian giant Statoil for subsidies to help one of the players develop an offshore wind farm in the Gulf of Maine. That competition ceased in October when Statoil announced its departure from the state after legislation pushed by Gov. Paul LePage’s administration forced the Public Utilities Commission to reopen a competitive bid process for those subsidies, which already had ended with Statoil’s project being chosen, to allow UMaine to submit a plan. Maine Aqua Ventus is now one of six applicants vying for a $46.6 million grant from the U.S. Department of Energy to fund the development of its offshore wind technology.
Natural gas continues to be an important topic in the energy arena. While the cost of natural gas itself makes it an attractive option for residential and business customers, an insufficient regional transportation infrastructure has continued to be a problem. Last winter, industrial customers including Verso Paper faced large cost increases to transport the fuel ( $22 million in the case of Verso) because a bottleneck in southern New England pinched the supply in the region. LePage announced in early December that he and the other five New England governors had agreed to a cooperative plan to invest in the region’s natural gas delivery infrastructure. Other companies have been busy as well. The Dead River Co. and a Boston firm this year began trucking compressed natural gas to commercial customers not served by a pipeline. Summit Natural Gas entered the state in 2013 and began competing with Maine Natural Gas as both companies raced to lay down new pipelines in central Maine.
Return of Nova Scotia ferry service
In a move experts say will add another attraction to the state’s already impressive tourism resume, a new Maine-based company in August won a competitive bid process to receive $21 million in subsidies from the Nova Scotia government to resurrect ferry service between Portland and Yarmouth, Nova Scotia. The service won’t begin until May 2014, but Portland-based STM Quest expects the ferry, to be christened Nova Star, will carry 100,000 passengers next year. It will be the first ferry service between Portland and Nova Scotia since The Cat, a high-speed ferry, stopped offering the service in 2009. However, Bar Harbor, which The Cat also once connected by ferry to Yarmouth, will not have its service resurrected.
The numbers still aren’t all crunched, but preliminary estimates for important metrics such as Maine’s unemployment rate, the number of jobs and personal income suggest that 2013 was a year of recovery, albeit not of robust growth. Maine’s unemployment rate reached an estimated 6.4 percent in November, one of four months in 2013 that marked new five-year lows for unemployment.
On the employment front, Maine has added jobs. Maine hit a low point in May 2011, posting only 591,500 nonfarm jobs, but since then has steadily added jobs. In November 2013, the state’s job total was an estimated 601,100, an increase of nearly 0.8 percent from the 596,500 posted in November 2012. While an increase, it lagged the national pace, which was 1.7 percent during that period.
Maine’s personal income during the third quarter of 2013 was estimated to be nearly $54.9 billion, which was a 1.15 percent increase from the second quarter, the fastest pace among New England states. That third quarter personal income also marked a nearly 3 percent increase from the third quarter of 2012.
While the numbers suggest Maine is heading in the right direction, it still has not fully recovered from the recession, which began in December 2007 and officially ended in the summer of 2009. Before this recession, the average time it took Maine’s economy to fully recover all the jobs lost during the previous six recessions was 27 months. December 2013 marks the 102nd month since the most recent recession began in December 2007 and Maine’s job total is still nearly 20,000 jobs short of the starting line.