Overview

Resources and Consumption

Maine has no fossil fuel reserves but has substantial renewable energy potential. The State’s numerous rivers, forests, and windy areas provide the potential for hydroelectric, wood-fired, and wind-powered generation. Due to its energy-intensive forest products industry, Maine is the only New England State in which industry is the leading energy-consuming sector.

Petroleum

Coastal ports, including Portland, Searsport, and Calais, receive petroleum products from abroad. Although Maine has no refining capacity, the Port of Portland receives crude oil shipments that it then sends via pipeline to refineries in Quebec and Ontario. Maine’s per capita petroleum consumption is high due to the widespread use of fuel oil for home heating during the long, cold winters. About four-fifths of Maine households use fuel oil as their primary energy source for home heating, a higher share than in any other State.

Maine, along with much of the U.S. Northeast, is vulnerable to distillate fuel oil shortages and price spikes during winter months. In January and February 2000, distillate fuel oil prices rose sharply when extreme winter weather increased demand unexpectedly and hindered the arrival of new supply, as frozen rivers and high winds slowed the docking and unloading of barges and tankers. In July 2000, in order to reduce the risk of future shortages, the President directed the U.S. Department of Energy to establish the Northeast Heating Oil Reserve. The Reserve gives Northeast consumers adequate supplies for about 10 days, the time required for ships to carry heating oil from the Gulf of Mexico to New York Harbor. The Reserve's storage terminals are located in Perth Amboy, New Jersey, and Groton and New Haven, Connecticut.

Natural Gas

Maine’s per capita natural gas consumption is low and supply is used primarily for electricity generation. Maine receives its natural gas by pipeline mostly from Canada, and ships over one-half of its natural gas receipts to the Boston area via New Hampshire. With the expansion of the Maritimes and Northeast Pipeline and completion of a new LNG facility in New Brunswick, Canada, Maine has increased its supply capabilities to the Northeast markets.

Coal, Electricity, and Renewables

Maine’s net electricity generation is among the lowest in the United States. As in several other New England States, natural gas has become the dominant fuel for power generation in Maine; it has accounted for at least 40 percent of generation since 2001. Renewable sources, mainly wood and wood waste and hydroelectric, account for almost half of Maine’s net electricity generation. Maine is one of the top U.S. producers of electricity from wood and wood waste. Nonhydroelectric renewable energy sources (including wood and wood waste) account for a larger share of net electricity generation (about one-quarter) in Maine than in any other State. Maine’s residential electricity use is low compared with the rest of the Nation, in part because demand for air-conditioning is low during the cool summer months and because few households use electricity as their primary energy source for home heating. In September 1999, Maine’s Public Utilities Commission adopted a renewable portfolio standard requiring that at least 30 percent of retail electricity sales come from renewable sources. In June 2006, Maine adopted another renewable portfolio goal to increase renewable energy capacity by 10 percent between September 1, 2005 and 2017. Renewable sources that are used to satisfy the State’s new capacity requirement cannot be used to satisfy the Public Utilities Commission’s portfolio requirement. Maine made its renewable capacity goal a mandatory target in 2007.