CONTRIBUTORS

While papermaking flounders, Maine can’t afford to oppose foreign investment

Posted Aug. 20, 2014, at 11:37 a.m.
Demonstrators in Searsport protest a plan to build a large propane storage tank in town in 2011.
Demonstrators in Searsport protest a plan to build a large propane storage tank in town in 2011.

In Maine, we’ve always had the paper mills. And for the better part of the past century, that is all we’ve needed. But having seen the past few years of bad news for Maine’s paper industry, more specifically the closure of the Millinocket and East Millinocket mills as well as the recent closure announcement of Old Town Fuel & Fiber, it is no secret that Maine’s paper industry is no longer the sturdy crutch that has propped up Maine’s economy.

Yes, Sappi, Verso and Woodland continue to flourish, but Mainers must come to the realization that the paper industry is no longer the future of Maine.

However, that isn’t to say that Maine’s forest industry is finished. Recently, I wrote about wood pellet export opportunities in Europe. Further, research into alternative uses related to wood cellulose conducted by the University of Maine provides some hope. But for either opportunity, little or no source of investment exists. This begs the question, where can we find money to grow the state when there is little money in the state?

Maine has a strong potential for a different industry, one that many outside the state have been working toward. Energy, more specifically alternative energy, continues to bring investment into the state as windmill projects rise throughout the counties. Further, biomass-based power plants are coming back to Maine as businesses and investors in the state find a market for exporting electricity to our neighbors.

Yet with each project, whether the ill-fated DCP Midstream project at Searsport, or Statoil’s offshore windmill project, opposition has come from within the state. To me and many others, this behavior appears to be a fear of foreign direct investment. If true — and I certainly hope it is not — viewing foreign direct investment as an evil pushes us back to my original question: Where can we find money to grow the state when there is little money in the state?

Daily I read comments and have discussions with folks who question money from away. Even investment from neighboring Canada, our largest international trading partner, seems to be vehemently opposed. New Brunswick-based J.D. Irving owns the largest chunk of land in Maine, supporting transportation, forest management, timber and biomass operations throughout the state. And that is only its direct involvement. There’s no doubt the indirect economic activity from the Canadian giant provides great support and stability to Downeast and Northern Maine. Yet in serious discussions I’ve had with business leaders, any mention of “Irving” is immediately shunned or snickered at.

Furthermore, many Mainers seem unwilling to allow developments such as an east-west corridor or electrical exports to neighboring regions to occur.

Being from Maine, I certainly appreciate the beauty of the state. But I also realize that in order to make a living here, certain sacrifices must be made in order to facilitate new sustainable enterprise. This past year, I had a rail line traverse through the backyard of my apartment, but each time a train came through, I saw it not as a nuisance but rather as a sign of progress.

Opposing growth opportunities sends a clear message to those outside the state that contrary to the popular “Open for Business” sign off Interstate 95 in Kittery is in fact very closed to foreign business. In fact, why would we put up such a sign on the largest artery traversed by foreigners coming into the state if we didn’t want foreign investment?

In this day and age, we are living in a global village. For Maine, not embracing investment from other countries, or even in some cases, other states here in the U.S., is simply foolish.

Holding on to the old ways will only continue to complicate Maine’s path to economic prosperity. And while foreign direct investment will serve to profit those from away, I believe that Maine has reached a point where we simply cannot pick and choose where our investment is coming from.

Geographically, Maine is in a privileged spot where it can quickly access markets in Europe through its seaports, as well as be a gateway for eastern Canadian commerce to move west either through Maine to central Canada, or into the Northeastern U.S.

Either way, Maine lies at a crossroads where, more often than not, business is taking the long way around to avoid the “Maine Street” all together.

Charles Hastings has both an MBA and Masters of Global Policy from the University of Maine.

 

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