One thing we knew – or thought we knew — about alternative energy is that it is more expensive than energy derived from conventional sources like coal, nuclear and hydro. Some have been willing to pay a higher price for a cleaner environment; most have not. But stop the presses! Several Massachusetts and Connecticut utilities have just signed long-term contracts with proposed new Maine wind farms at prices below those for conventional sources. Does this mean the future of competitive prices that wind power companies have been promising could be upon us?

Seven years ago, Mars Hill became the first wind farm in Maine to begin generating power, and wind companies said then and repeatedly since that the cost of wind power would decline as economies of scale for the industry in this country began to kick in. Supply chains, we learned, for procuring blades, turbines and towers stretched half way around the world to countries that had invested in manufacturing such components locally, contributing to increased the costs of installing turbines here in America. But with so much of the wind industry headquartered offshore and with so much of American manufacturing capacity shuttered, who actually believed these promises?

Certainly not Maine’s governor who has complained often and vigorously that the only criterion Maine should use in establishing the state’s energy policy is the cost to ratepayers. During the last legislative session, the governor proposed stripping aggressive wind energy production goals out of Maine’s Wind Energy Act and fast-tracking cheaper natural gas expansion in Maine.

The current economics look like this: a handful of Massachusetts and Connecticut utilities have signed 15- to 20-year contracts with proposed new wind farms in Maine and New Hampshire that will deliver electric power to residential and commercial customers at less than eight cents per kilowatt-hour. The long-term average costs for hydro, coal-fired and nuclear power is projected at between nine and almost 11 cents per kilowatt-hour. Only natural gas is projected to be a cheaper long-term fuel for generating electric power at just under seven cents per kilowatt-hour.

Let’s take a step back and review what we know about natural gas production for a moment. Most of us had have heard at least a little about the boom in natural gas production in this country that could turn the United States into a net energy exporter from the world’s largest energy importer. The natural gas boom in states as varied as Pennsylvania, Ohio, Texas, Colorado and North Dakota has resulted from two recent innovations in drilling technology. One innovation enables oil and gas drillers to turn their drilling bits sideways in a horizontal strata and the other introduces large volumes of water and drilling fluids into these strata to fracture the rocks and release the tiny bubbles of oil and gas that have been locked in heretofore uneconomic  “tight” deposits.  The shorthand term for these technological breakthroughs is “hydraulic fracturing,” or simply “fracking.”

If you think the local controversies in small communities like Vinalhaven, Mars Hill and elsewhere about noise and visual pollution from wind turbines were significant, you would be stunned about the intensity of concern about the potential effects of toxic drilling compounds seeping into your drinking water supplies. Although certain Maine towns have turned away proposed wind farms, scores of counties across the U.S. have passed anti-fracking ordinances, which are being fought tooth and nail by the oil and gas industry. The fear that your family might be vulnerable to cancer-causing chemicals is arguably more intense than the fear that wind farm aesthetics will reduce your property values.

But back to Maine’s energy policies. Most of us probably missed the grand energy agreement reached by the governor, legislators and several prominent environmental groups that passed at the last moment of the last day of the last legislative session last. The “omnibus” energy bill supposedly had something in it for everyone — a 20-year state guarantee for natural gas purchases for building a new pipeline into Maine (the governor’s chief interest), a program to reduce customer’s reliance on expensive oil heat (supported by both Democrats and Republicans concerned about “oil poverty”) and increased funding for energy efficiency (supported by Democrats and several environmental groups).

So, when most of us were not really looking, our leaders placed a huge bet on the future of natural gas pricing in the U.S. during the next 20 years. We placed this bet in the midst of a swirling national controversy over whether the Department of Energy (DOE) should allow producers to export of the country’s new domestic gas bonanza. Producers want to export because prices in Europe for natural gas are two to three times higher than they are currently in the U.S.

Big manufacturers like Dow Chemical that use natural gas as a feedstock for manufacturing all kinds of consumer items — not to mention consumers who heat and cook with natural gas — oppose exporting our newfound gas wealth because prices will inevitably increase. The DOE has recently signaled it intends to license at least some export capacity.

Let’s leave aside the questions of whether natural gas supplies in “tight” deposits are as robust as initially projected, along with how much natural gas contributes to carbon dioxide in the atmosphere and whether this fossil fuel will be taxed as a carbon based pollutant anytime in the next 20 years.

Let’s also not dwell on the fact that Maine’s Department of Environment Protection has recently denied permits to two proposed new Maine wind farms. A decision on a third wind farm — a scaled-back proposal for Bowers Mountain in Eastern Washington County — also appears headed for a DEP denial.

The simple fact is that land-based wind companies are willing to sign contracts for a competitive price for the next 15-20 years. The reason the state had to guarantee to buy up to half the capacity for a new natural gas pipeline into Maine is that no private company was willing to bet on a price for a 20-year period. Instead taxpayers did. Or your leaders did for you.

Let’s hope the price predictions our leaders have made on natural gas prove to be as real as those from wind companies.

Philip Conkling is the founder of the Island Institute. Additional writings are available at www.conklingassociates.com

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