CAMPAIGN 2014 & ANALYSIS

Gubernatorial candidates react to Old Town mill closure, show split on energy, jobs policies

Employees at Old Town Fuel and Fiber learned Wednesday night they would be indefinitely furloughed because of foreign trade and high fuel costs.
Gabor Degre | BDN
Employees at Old Town Fuel and Fiber learned Wednesday night they would be indefinitely furloughed because of foreign trade and high fuel costs. Buy Photo
Posted Aug. 15, 2014, at 6:30 p.m.
Last modified Aug. 16, 2014, at 6:55 a.m.

AUGUSTA, Maine — Everyone, from Republican Gov. Paul LePage to the employees of Old Town Fuel & Fiber, expressed shock at Thursday’s announcement that the mill has indefinitely ceased operations. Now, in the midst of a heated campaign year, the focus has shifted to what caused the closure and to what can be done to avoid a repeat at another Maine paper mill — and another after that.

U.S. Rep. Mike Michaud, the Democratic gubernatorial candidate, and the rest of Maine’s congressional delegation blamed unfair trade practices, which is a concept they and others have been voicing for years.

LePage on Thursday focused his ire on energy prices, which he cited as the most significant — and so far impenetrable — wall standing in the way of economic prosperity.

“For four years I’ve said that unless we get our act together with energy, this is going to continue to happen,” LePage said Thursday afternoon. “They can talk about foreign competition, and that’s certainly one factor, but our energy costs are out of control.”

Michaud and independent gubernatorial candidate Eliot Cutler voiced shades of agreement with LePage, which he reciprocated. But it’s clear their approaches to the problem are different.

While all three candidates are focused on improving the state’s energy policy, they differ on where the energy would originate. LePage has long advocated for greater reliance on natural gas, purchasing electricity from hydroelectric dams in Quebec and even bringing nuclear power generation back to Maine. He dismisses wind power, upon which his predecessor, Democratic Gov. John Baldacci, built much of his energy and economic recovery strategy.

“I’ll buy all the electricity that wind power can give me, at 5 cents a unit,” said LePage, who has long said his problem with wind power is that it’s unreliable and too expensive.

Michaud agrees about the need for more natural gas but believes it is “best considered a transition fuel” that eventually could make way for the rise of renewable power sources. He said natural gas prices are too volatile to become the central source of Maine’s energy base.

“We need to bring more natural gas into the region, particularly for manufacturing, but we also have to be mindful that we need a diversified energy portfolio and that natural gas is best considered a transition fuel,” Michaud said in a written response to questions from the BDN. “Natural gas prices are unpredictable and like we saw last winter, are subject to spikes that can drive electricity prices up. Wind energy and other renewables, such as solar, biomass, tidal and hydro, can protect against those types of spikes and through long-term contracts provide protection from unexpected changes in the natural gas marketplace.”

Cutler said Friday that while energy prices and global competition are problems, they’re not insurmountable and share the blame with aging infrastructure in the state’s paper industry, which is becoming too expensive to maintain and still turn a profit. Cutler advocated that Maine’s next governor should be much more in tune with private businesses so closures like the one in Old Town this week don’t take government by surprise. LePage complained Thursday that the owners of the Old Town mill did not alert him about their plans to close, though there’s no legal or regulatory requirement to do so.

“It’s hard to accept the fact that Maine’s governor was taken by surprise once again by the sudden closure of a major manufacturing facility, just as he was when UTC closed its Pittsfield plant a few months ago, costing hundreds of workers their jobs,” Cutler said Friday in a written statement. “We need a governor who is going to stay on top of things and an administration that is continually reaching out to manufacturers to see how they are doing and find out if there is anything the state can do to help them be more successful and to stay in operation.”

UTC Fire and Security of Pittsfield announced in March it would gradually close its Maine operations, effective from the time of the announcement until the middle of next year, and ship its 300 jobs to other locations.

Michaud criticized LePage for talking about the need for energy reform but not following it up with action. Michaud cited LePage’s veto of a bipartisan omnibus energy bill earlier this year that sought to expand New England’s natural gas infrastructure and boost funding for energy efficiency projects. The Legislature overrode the veto, which LePage said he issued in part because of new fees it included for consumers.

LePage said he favors increasing Maine’s access to natural gas mined in Pennsylvania. On Thursday, he wrote a letter to Massachusetts Gov. Deval Patrick urging him to stand more in favor of a New England-wide proposal to do just that.

“Our energy issues, we’re not willing to deal with,” LePage said Thursday. “They all think that wind is going to solve our problem at an industrial level. I mean, come on, folks.”

Michaud said the governor is ignoring some of the dynamics that played into the closure in Old Town.

“Once again, in a quest for a soundbite that helps his election, the governor has oversimplified the issue,” Michaud said. “The challenges for Old Town date back to the purchase of Georgia Pacific by the Koch brothers. They had no intention of ever running the mill in Old Town.”

Charles and David Koch are wealthy industrialists who fund conservative advocacy groups designed to influence public policy, most notably the American Legislative Exchange Council. Republican lawmakers sometimes tap ALEC’s resources for wording of legislation and policy debate points. Democrats decry the Koch brothers as manipulative voices for corporate power over consumer interests.

Michaud ascribed the Old Town mill’s closure to the high price of wood fiber to make paper, driven by unfair trade practices that have shifted the core of that market to other countries, including eucalyptus harvesters in South America.

“I was on the floor of the mill in East Millinocket when NAFTA happened, and I know what it felt like: a betrayal,” said Michaud, who has made fighting unfair trade deals the center of his tenure in Congress. “If elected governor, I’ll continue to be a vocal opponent of unfair trade practices and will continue to advocate for strengthening our trade policies by working with our congressional delegation and other leaders on the federal level.”

LePage said the wood fiber issue is solvable right here in Maine.

“I’m not so concerned about the fiber because we can help over the long term,” LePage said. “In short-term spot markets, we can’t do anything; they have to try to weather that storm. But we already have a plan about the cost of fiber long-term. We’re going to raise the harvests on state land to help some of the prices at the pulp mills.”

Despite what seems like a catastrophic downfall of the paper industry in recent years, Maine still produces more paper than any state in the U.S., other than Wisconsin, according to the Maine Pulp & Paper Industry. With forests covering more than 90 Maine land and with the presence of a mostly rural workforce that built its expertise around the industry over the course of generations, it’s hard to imagine Maine without papermaking, though not as hard as it was even 10 years ago.

Each of the three major candidates for governor — a Democrat employed for 29 years at a paper mill, a Republican committed to making Maine more “business friendly” and an independent with international development experience — has his own idea on how to fuel Maine in a way that will preserve its papermaking heritage.

 

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