AUGUSTA — Norwegian company Statoil announced Tuesday that it was pulling the plug on its $120 million offshore wind pilot project in Maine, citing uncertainty about state regulations.
It will instead put its resources toward pursuing an offshore wind project it has been developing in Scotland.
“Obviously, this is a huge disappointment,” Paul Williamson, executive director of the Maine Ocean & Wind Industry Initiative, told the Bangor Daily News on Tuesday. “As the University of Maine pointed out in its support letter [for Statoil’s project], having Statoil in the state of Maine was like attracting a Google or an Apple to the state.”
The multinational oil and gas company, which is traded on the New York Stock Exchange and has a market cap of $72.4 billion, said in its release that it would “demobilize all activities and resources” in Maine.
“Changes in the framework conditions in the state, uncertainty around the commercial framework, and the schedule implications of project delays made the project outlook too uncertain to proceed,” it continued.
Statoil proposed the $120 million Hywind Maine project in 2011, in response to a request for proposals the Maine Public Utilities Commission issued in 2010 as it looked for an offshore wind project to support with ratepayer subsidies. Although the University of Maine has also been working on developing an offshore wind project, Statoil was the only company prepared to submit a proposal at that time. The PUC in January 2013 finalized a term sheet with Statoil, though no formal contract had been signed.
In June, the Legislature, at the behest of Gov. Paul LePage, passed a law that forced the PUC to delay negotiations on a contract with Statoil and reopen the RFP process it had closed in 2011.
LePage has long opposed the Statoil project. He vetoed an omnibus energy bill that lawmakers worked on for most of the legislative session, and then withheld his support until the Legislature passed the aforementioned law. LePage’s argument for interrupting the process was he wanted to allow the University of Maine, which was not prepared to submit a proposal in 2010, a chance to lobby the PUC for that ratepayer support. UMaine submitted a proposal to the PUC on Aug. 30.
Adrienne Bennett, LePage’s press secretary, released a news statement Tuesday afternoon that reaffirmed the governor's opposition. “The Administration has been perfectly clear through the regulatory process that the term-sheet offered by Statoil was ironclad in its cost – placing a $200 million burden on Mainers by way of increasing electric costs," according to the statement. "Additionally, the corporation was ambiguous in its commitment to growing Maine’s economy."
UMaine currently has a pilot project in Castine Harbor, which recently became the first offshore wind turbine in the Americas to provide electricity to the power grid.
Williamson said he remains confident that the state’s abundant natural resources and UMaine’s efforts will attract investment and spur the creation of an offshore wind energy industry in Maine. Still, an opportunity has been lost, he said.
“While we remain bullish that Maine’s natural resources will eventually attract investment, it does cause some concern and disappointment because Statoil represented an opportunity to put Maine first in the market,” he said. “Without Statoil’s investment, we still have an opportunity to be first to market with the university’s project, but having two offshore wind projects in Maine would have been big elements in creating the entire industry here. Now the opportunity is less likely that Maine will be the birthplace of this industry.”
In a statement, Rep. Chellie Pingree said Statoil’s decision to pull out of Maine is “extremely disappointing.”
“It’s unfortunate that this major international company was made to feel unwelcome in Maine and I’m hopeful that this won’t be a major setback in the future development of a new offshore wind industry in our state,” she said. “The University of Maine has a strong record on clean energy technologies, and I’m optimistic that their continued efforts can help make great progress in establishing Maine as a real leader in the renewable energy sector.”