Statoil cancels $120 million offshore wind project in Maine

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.”

Offshore Wind
Robert F. Bukaty/Associated Press

In this Sept. 20 photo, the country's first floating wind turbine, the University of Maine's 9,000-pound prototype, generates power off the coast of Castine. 

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Comments

Bob White's picture

Yes it would be bad to invest

Yes it would be bad to invest our money in Maine. The people that are complaining are these the same people that would complain about spending our money over seas? You people realize when they say Norway there not talking about Norway Maine right.

 's picture

WIND is a loss

this intermittent source, off the coast of Maine, had no "idling reserve" for back-up.
Transmission alone would drive electrical rates up.

Steve  Dosh's picture

. . Hump Day 13.11.16 11:20

. .
Hump Day 13.11.16 11:20 am est ?
Our wind blows 24 x 7 x 365 Alice . It's ƒree . Doesn't pollute . Doesn't smell like cow dung ( biomass ) . Provides jobs . Makes $ense . Er wait . .. Maybe that billionaire T. Boone PIckens has it all wrong , too ? http://en.wikipedia.org/wiki/Pickens_Plan
Probably & perhaps
It's so EZ to " Just Say No " like the Tea Party does
What was your alternative again , Ms. Not Off the Grid ?
hth ? /s Steve

 's picture

do not depemd on the goernment or the grid

off the grid for 13+ years....trying to save the mountains of maine so we can live self sustainably...become farmers again...???

Didn't T Bone get knocked down a notch in his wealth standing because of WIND?

Steve  Dosh's picture

.

Steve  Dosh's picture

Statoil cancels $120 million offshore wind project in Maine

Mainers , 19:40 est ? Tuesday
Someone screwed up ?
US$120M is a big chunk of change to lose out on , Paul
Steve

Gerry Thompson's picture

We don't need higher rates

the term-sheet offered by Statoil was ironclad in its cost – placing a $200 million burden on Mainers by way of increasing electric costs,"

CLAIRE GAMACHE's picture

The second shoe

Well it is no surprise to hear the second shoe drop. This was foreordained when the governor stuck his fat posterior in the gears. This will be a notice to any business thinking of investing in Maine. You not only have to comply with all the rules and regulations but you have to kiss up to the Little Napoleon in the Blaine House too.

 's picture

so?

Maine gets offers to invest $120 million almost every day. Easy come, easy go. We have to turn some of these away or other businesses might get the idea investing in Maine is wise.

Really?

Name one.

Never mind...

I just realized you're being facetious.

Steve  Dosh's picture

Mainers , 19:40 est ?

Mainers , 19:40 est ? Tuesday
Where again, Mark ?
Steve
http://en.wikipedia.org/wiki/Wind_power_in_Maine

FRANK EARLEY's picture

Whats there to say??????

A 120,000,000.00 dollar project, investing in renewable energy, one of the fastest growing investments in the Country. The Governor decides to throw it away for no legitimate reason.
The Governor has, on his own, thrown away a possible beacon. A beacon that may very well have attracted many more international companies who would invest millions into the State of Maine. Thrown away jobs, that may have benefited who knows how many local residents.
Why don't these things shock me any more? Just don't forget, he is running for reelection. It's just to bad, that along with voting him out of office, we can't vote away his pension package as well............

Gerry Thompson's picture

you rates

would have gone up with no new jobs for us --- the term-sheet offered by Statoil was ironclad in its cost – placing a $200 million burden on Mainers by way of increasing electric costs,"

FRANK EARLEY's picture

Could you explain your concerns???????

Higher rates were not the reason LePage stuck his nose into the mix. That being said, why are you afraid rates were automatically rising, how do you know the electricity was destined for Maine consumers? The reason to locate off the coast of Maine was not to supply Maine with electricity. The electricity would go into the grid for distribution.
Regardless of the method of creating electricity, if it's a new method, it will be expensive. That in itself is no indication that it will stay expensive. New technology is always expensive. Until the process has been perfected, the cost stays high. That could be the worst reason not to try something. Remember home computers. When they first hit the market, they cost several thousand dollars, now, a few hundred. Give it a chance.....................................

Gerry Thompson's picture

I read

the article and copy/pasted an excerpt. That is where my info came from. You should try it

FRANK EARLEY's picture

OK I'll bite..............

Lets just say for the sake of argument, that you are correct in assuming that we will be burdened with huge costs. This company is very well established, they have the expertise to provide the necessary, state of the art facilities to generate electricity. This company has other facilities in other countries. This whole wind energy idea, is still in it's infancy. Only time and experience will eventually bring the cost of production down and the amount of affordable, renewable electricity up. Who do you think stands to benefit more from streamlining the operation? When and if wind power gets to the point of actually being profitable, the rewards will be enormous. Those with the most invested, will see the biggest returns.
I think U Maine could learn a lot from a company like Statoil, but I don't feel they have the available assets to compete on the open market right now. JMHO...................

Bob White's picture

Hey Frank

Frank I will tell you this and it might surprise you. I actually thought you were intelligent till you said this "This whole wind energy idea, is still in it's infancy. " Hate to tell you this it maybe be new here in the USA but they have been using wind for a long time over seas. This why you should listen to fox news then you would have known that.

FRANK EARLEY's picture

Off shore wind................

Ok, we'll just leave it to U Maine to streamline the process of off shore wind generating. It shouldn't take them to long to catch up to Statoil. I mean they must have started from nothing....................

Bob White's picture

Frank showing your knowledge

Frank showing your knowledge in a earlier comment I don't think you should be commenting on this issue. Leave it to the people that know something please.

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