Statoil Rejection an Epic Error for Maine, U.S.

Recent news about a $2.5 billion investment in England by Statoil, the giant Norwegian energy company, has reminded people that Maine kicked the company out of the state.

But the real meaning of the state’s action has been greatly underrated. The move was an epic error.

Statoil is rated by Forbes magazine as the 51st largest corporation in the world. Fortune magazine places it at 54th. Either way, it’s a major world heavyweight, one that was mistreated by Maine, harming both the state and the nation.

Statoil wanted to develop a $120 million pilot wind off the coast of Maine, considered a prime site. You might remember former Gov. Angus King saying the Maine was “the Saudi Arabia of wind.”

The Legislature set up a review process for offshore wind power, and Statoil’s project went through the regulatory proceeding successfully.

Gov. LePage was reputed to be cool to wind power, but warm to giving the University of Maine a second shot at displacing Statoil. To get the governor to sign an energy bill, the Legislature gave him what he wanted and reopened the process. Records later revealed the governor’s clear intent to kill Statoil in Maine.

When the news of Statoil’s big investment in England became known, the governor’s energy aide insulted everybody’s intelligence by saying that what the Norwegian company was doing there would not have worked in Maine. But that’s not what it proposed for Maine.

There’s been criticism about Maine’s lost energy opportunity. The University-related project failed to get the federal financial support essential to its development. The net result for Maine in terms of offshore wind power is next to nothing.

But the meaning is far worse than simply lost investment in wind power.

When Maine killed its approval, Statoil departed, saying “a lot of uncertainty” about Maine government discouraged it from operating in the state.

Maine needs outside investment, because small, local business alone, while important, is not saving the state economy. The ousting of Statoil sends a clear message to other major corporations to invest elsewhere. The Maine slogan “Open for Business” is obviously untrue.

Foreign investors are building manufacturing plants all over the United States. Maine, with an aging population and limited opportunities for young people, should be chasing outside investment, not getting the reputation of shunning it.

So the first problem is that the Statoil situation not only affected wind power, but also radically increased the likelihood that major foreign investors will go elsewhere. That’s seriously bad news for the state.

But also for the United States. The international flow of funds continues to show more money going out of the country than coming in. The word in the energy world is that the federal Department of Energy would have supported the Statoil project, though it would not back the one involving the University of Maine.

The U.S. government could have made its preferences known sooner, instead of letting Maine kill Statoil. And maybe, instead of working to undermine the Statoil investment, the governor’s energy office could have tried to get its own sense of which way the wind was blowing.

Another problem is the growing American attitude toward higher education. Many believe universities should train people for jobs and boost economic development at the expense of sound, comprehensive education and in-depth research.

It looked like good politics to favor the University of Maine over some foreign company. Boosterism gets votes. It takes political courage to focus on the long-range role of academic institutions, which has an indirect and differed effect.

The strength and standing of the University of Maine depends on its recognition as a research university. Maine needs to try continually to improve its quality of research if it is to retain top teachers and students and to draw favorable attention to the state.

The drive to be an offshore wind developer smacked of academic hucksterism. To work on developing the theory and practice of the wind energy resource makes sense, but lobbying hard to be the developer detracts from the critical, academic function of the University.

To be sure, the wind project has brought some funding to the University but with little apparent benefit to the institution as a whole, which is undergoing painful cutbacks.

Despite his inexplicable hostility to Statoil, Gov. LePage has been consistently right about one thing. He does not like electricity customers, already paying high rates, subsidizing energy development.

If state government wants to subsidize offshore wind energy, it should use tax dollars not electric rates. Of course, right now, that’s no longer a problem.

Gordon L. Weil

About Gordon L. Weil

Gordon L. Weil is a former local, state, national and international organization official. He is an author and publisher.