Google's Goal: Renewable Energy Cheaper than Coal

Creates renewable energy R&D group and supports breakthrough technologies

Mountain View, Calif. (November 27, 2007) – Google (NASDAQ: GOOG) today announced a new strategic initiative to develop electricity from renewable energy sources that will be cheaper than electricity produced from coal. The newly created initiative, known as RE
"We have gained expertise in designing and building large-scale, energy-intensive facilities by building efficient data centers," said Larry Page, Google Co-founder and President of Products. "We want to apply the same creativity and innovation to the challenge of generating renewable electricity at globally significant scale, and produce it cheaper than from coal."

Page added, "There has been tremendous work already on renewable energy. Technologies have been developed that can mature into industries capable of providing electricity cheaper than coal. Solar thermal technology, for example, provides a very plausible path to providing renewable energy cheaper than coal. We are also very interested in further developing other technologies that have potential to be cost-competitive and green. We are aware of several promising technologies, and believe there are many more out there."

Page continued, "With talented technologists, great partners and significant investments, we hope to rapidly push forward. Our goal is to produce one gigawatt of renewable energy capacity that is cheaper than coal. We are optimistic this can be done in years, not decades." (One gigawatt can power a city the size of San Francisco.)

"If we meet this goal," said Page, "and large-scale renewable deployments are cheaper than coal, the world will have the option to meet a substantial portion of electricity needs from renewable sources and significantly reduce carbon emissions. We expect this would be a good business for us as well."

Coal is the primary power source for many around the world, supplying 40% of the world's electricity. The greenhouse gases it produces are one of our greatest environmental challenges. Making electricity produced from renewable energy cheaper than coal would be a key part of reducing global greenhouse-gas emissions.

"Cheap renewable energy is not only critical for the environment but also vital for economic development in many places where there is limited affordable energy of any kind," added Sergey Brin, Google Co-founder and President of Technology.

Strategic Investments and Grants

"Lots of groups are doing great work trying to produce inexpensive renewable energy. We want to add something that moves these efforts toward even cheaper technologies a bit more quickly. Usual investment criteria may not deliver the super low-cost, clean, renewable energy soon enough to avoid the worst effects of climate change," said Dr. Larry Brilliant, Executive Director of Google.org, Google's philanthropic arm, "Google.org's hope is that by funding research on promising technologies, investing in promising new companies, and doing a lot of R&D ourselves, we may help spark a green electricity revolution that will deliver breakthrough technologies priced lower than coal."

Working with RE
* eSolar Inc., a Pasadena, CA-based company specializing in solar thermal power which replaces the fuel in a traditional power plant with heat produced from solar energy. eSolar's technology has great potential to produce utility-scale power cheaper than coal. For more information, please visit http://www.google.com/corporate/green/energy/esolar.pdf.
* Makani Power Inc., an Alameda, CA-based company developing high-altitude wind energy extraction technologies aimed at harnessing the most powerful wind resources. High-altitude wind energy has the potential to satisfy a significant portion of current global electricity needs. For more information on Makani Power, please visit http://www.google.com/corporate/green/energy/makani.pdf.

Ongoing Commitments

Today's announcement represents just the latest steps in Google's commitment to a clean and green energy future.

Google has been working hard on energy efficiency and making its business environmentally sustainable. Last spring the company announced its intention to be carbon neutral for 2007, and is on track to meet that goal. To this end, the company has taken concrete steps to reduce its carbon footprint and accelerate improvements in green technology, including:

* Developing cutting-edge energy efficiency technology to power and cool its data centers in the U.S. and around the world.
* Generating electricity for its Mountain View campus from a 1.6 Megawatt corporate solar panel installation, one of the largest in the U.S.
* Accelerating development and adoption of plug-in vehicles through the RechargeIT initiative, including a $10 million request for investment proposals (http://www.google.org/recharge/)
* Joining with other industry leaders in 2007 to form the Climate Savers Computing Initiative, a consortium that advocates the design and use of more energy-efficient computers and servers (http://www.climatesaverscomputing.org/).
* Working on policies that encourage renewable energy development and deployment, such as a U.S. Renewable Energy Standard, through Google.org.

For more information on Google's commitment to a clean energy future, see http://www.google.com/renewable-energy

For broadcast-standard video and other multimedia files for the announcement, see http://www.google.com/intl/en/press/index.html

For more information on recruitment for REhttp://www.google.com/jobs/energy/

Webcast and Conference Call Information

Google's renewable energy initiative call begins today at 9:00 AM (PT) / 12:00 PM (ET). A replay of the call will be available beginning at 11:30 PM (ET) today through midnight Tuesday, December 4th, 2007 by calling 888-203-1112 in the United States or 719-457-0820 for calls from outside the United States. The required confirmation code for the replay is 2205214.

Forward-Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties, including statements relating to our ability to develop cheaper electricity from renewable energy sources, our expected investments and capital expenditures, and our ability to accelerate the development of clean energy technologies. Actual results may differ materially from the results predicted. The potential risks and uncertainties that could cause actual results to differ include, among others, risks related to our ability to hire the appropriate people and our ability to identify and pursue the technologies necessary to achieve these goals, as well as those risks and uncertainties included under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2007, which is on file with the SEC and is available on our investor relations website at http://investor.google.com and on the SEC website at www.sec.gov. All information provided in this release is as of November 27, 2007, and Google undertakes no duty to update this information.

About Google Inc.
Google's innovative search technologies connect millions of people around the world with information every day. Founded in 1998 by Stanford Ph.D. students Larry Page and Sergey Brin, Google today is a top web property in all major global markets. Google's targeted advertising program provides businesses of all sizes with measurable results, while enhancing the overall web experience for users. Google is headquartered in Silicon Valley with offices throughout the Americas, Europe and Asia. For more information, please visit http://www.google.com.

About Google.org
Google.org, the philanthropic arm of Google, uses the power of information to help people better their lives. We develop and invest in tools and partnerships that can help bring shared knowledge to bear on the world's most pressing challenges in the areas of climate change, economic development and global health. For more information, visit http://www.google.org.

Media Contact:
Jacquelline Fuller
Google
press@google.com

Truckers protest high cost of diesel

Haulers plan a rally next Saturday in Damariscotta. A representative of Gov. John Baldacci will attend.


By JOSIE HUANG, Staff Writer November 24, 2007


Truckers across Maine are protesting soaring fuel prices with at least a couple of hundred haulers expected to converge in Damariscotta for a meeting next Saturday.

Meeting organizer Larry Sidelinger has invited federal, state and local officials to listen to truckers' stories of hardship as well as their suggested remedies, which include temporarily waiving state taxes on both diesel fuel and replacement automotive parts such as tires and brakes.

Sidelinger said the price of diesel fuel -- which presently hovers around $3.50 a gallon, about 50 cents more than regular gas -- means that many truckers are barely making a living hauling pulp, logs and lumber.

Unlike other industries that build the rising price of fuel into the services and products they sell, truckers often are locked into contracts with manufacturers. Some independent haulers have decided to stop driving rather than exert wear and tear on their rigs for little to no return, Sidelinger said.

"What this fuel is doing is just crippling business in Maine," Sidelinger said. "Small business is feeling the crunch first because our pockets are not as deep."

Sidelinger, who owns Yankee Pride Transport in Damariscotta, decided to organize a meeting for the midcoast after several hundred truckers, logging company and mill owners attended a similar gathering in Lincoln on Monday.

The Coalition for Lowering Fuel Prices in Maine was born at the earlier meeting and Sidelinger, a member, expects to see some of the same faces at the Damariscotta meeting at 9 a.m. at the American Legion's Wells-Hussey post.

A representative of Gov. John Baldacci is expected to be among those present, according to his office. Baldacci spokesman David Farmer said the governor is interested in helping haulers form cooperatives to negotiate better deals on fuel, and in working with other governors in the region to urge the federal government to tap into petroleum reserves.

The governor also wants to reach out to banks and "see if they can extend better lines of credit and be a little bit more understanding with independent haulers," Farmer said.

Farmer, though, said waiving the diesel fuel tax of nearly 29 cents a gallon is not a good idea because it would cut into state revenue used to maintain roads and bridges. Similarly, suspending sales taxes for a particular profession would hurt the larger society, especially the needy who benefit from public programs, he said.

"I'm sure there are lots of industries that would like to have taxes waived on things they need to buy," Farmer said, noting that fishermen and lobstermen also use diesel fuel.

Sidelinger said he is worried that the forestry products industry will be imperiled should more truckers decide to get off the road.

He said truckers who make $3,200 a week have to factor in a $2,500 fuel bill, on top of truck payments, insurance and maintenance fees.

"Then you still have to feed the family," Sidelinger said. "Is it worth it to break even?"

He has had less freight to transport in the last year, he said, because high fuel prices have dampened the construction industry.

That led him to reduce his fleet of trucks from 14 to six and forced him to consider stopping driving altogether, he said, although he cannot bring himself to let the last year or so overshadow a 15-year career.

"It's just pure, dumb Yankee stubbornness, if you want to know the truth," Sidelinger said. "I've worked too hard to get to where I am."

Staff Writer Josie Huang can be contacted at 791-6364 or at:

jhuang@pressherald.com

Plastic to reusable cloth: Mainers urged to switch

A Bar Harbor lawmaker wants to lessen oil use and help the
environment.

By JOHN RICHARDSON, Staff Writer
November 25, 2007


San Francisco banned them. London may, too.

Ireland charges a fee to use them, and so do Denmark and
Switzerland.

Now, Mainers may soon join the global assault on the ubiquitous
plastic grocery bag.

A lawmaker from Bar Harbor wants Mainers to switch from the
thin plastic bags to reusable ones that aren't as harmful to the
environment and don't contribute to our addiction to oil. And
he's got the attention of the grocery industry, which is pledging
to help create a bring-your-own-bags ethic in Maine.

Rep. Ted Koffman, a Democrat and co-chairman of the
Legislature's Natural Resources Committee, said a fee of 20
cents or so, added to each plastic bag, could help shoppers
make the switch to reusable cloth bags and help pay for the
development of inexpensive alternatives, such as plastic made
out of Maine potatoes instead of oil.

"The whole idea is to reduce the amount of plastic bags being
used and put into the system," Koffman said. "There's an
international movement in this direction."

It used to be that the grocery bag debate focused on paper
versus plastic. That one pretty much ended in a draw, since
neither is a clear winner from an environmental perspective.

But now plastic bags are coming under intense pressure
worldwide, mostly because they are everywhere and a significant
amount of oil is used in their production. Plastic bags also have
been maligned around the world because they are a persistent
form of litter that clogs storm drains and chokes sea turtles that
mistake them for jellyfish. For his part, Koffman wants to reduce
their use as a small step toward curbing global warming.

"Why wouldn't we say to ourselves as a society, 'What little things
can we do to reduce our reliance on foreign oil?' " he said. If we
can't stop using oil to make
grocery bags when there are alternatives, Koffman said, how will
we ever stop using it to fuel our cars and heat our homes?

San Francisco became the first U.S. city to ban the bags last
spring. The ban took effect last Tuesday. Officials in Boston, as
well as other cities, have also considered a ban.

Koffman came up with a different plan, based in part on the
approach taken by Ireland.

He would place a 20-cent fee -- or something like it -- on each
bag used by customers of large retailers and use the money for
incentives to switch to reusable bags.

Those using reusable bags could get discounts on their
groceries and qualify for lottery drawings, such as $1,000 in
cash or groceries, he said.

Revenue from the fees could also helps pay for research into
plant-based bioplastics, as well as for education about the costs
of disposable plastic bags.

Koffman said it should not be labeled a tax on the bags, because
he doesn't think the government needs to be involved in
handling any of the money. He conceded that the plan would
cost people upfront, but he argued that people who switch to
canvas bags will eventually save money because of the discounts
on groceries.

Koffman proposed his idea in a bill presented this fall, but
legislative leaders voted against bringing it forward during the
upcoming session, which is reserved mostly for emergency
legislation.

"I get chuckles on this from some of my legislative colleagues,"
he said, "but I'm getting very serious support from the citizenry."

Still, some of the citizenry is less enthusiastic.

"What are we going to use for diapers?" was Jeff Dice's reaction
to the idea as he loaded his car with plastic bags full of
groceries from the Hannaford store on Forest Avenue in
Portland.

The plastic bags are great for sealing up stinky diapers, he said.
They're also handy for lining his trash can and holding his
recyclables, Dice said.

Other shoppers said the bags are great for cat litter and dog
waste.

"I don't actually throw them out without reusing them," said Eliza
Eastman of Portland.

But Betsy Graves of Portland said using fewer plastic bags is not
really as hard as people think at first.

Graves emerged from Hannaford carrying most of her groceries
in canvas bags, which she said can be used over and over. "We
use them for lugging everything around," she said.

She picked up the cloth-bag habit while living in Ireland, where
everybody carries their own bags, she said.

Graves said she simply puts her trash directly into the city's blue
trash bags and doesn't need to line her trash can. She does
bring home an occasional plastic bag, which she uses for
"smelly" trash.

Graves said she is all for encouraging more people to switch to
cloth bags, although she's not sure about the fee.

"That's a great motivator, but then it comes down to poor
people" who will be forced to pay more or invest in reusable
bags, she said. "I'm glad that at least (reusable bags) are around
for people."

Maine's grocers have not jumped behind the fee idea, either.
Koffman is scheduled to meet with representatives of the Maine
Grocers Association this week.

"We really want to proceed over this next year with an
educational program letting people know what their current
choices are," said Amie Joseph, executive director of the
association.

The rejection of Koffman's bill provides more time for the
industry to take voluntary action, Joseph said.

"But we're still going to head down this path and let people know
this is on the radar screen," she said. "We don't think this issue
is going to go away."

Major grocery chains, such as Hannaford Bros. Co. and Shaw's,
already are selling and promoting reusable bags. Hannaford
gives shoppers a 5-cent discount on groceries for each reusable
bag they use.

All Maine stores that offer customers the plastic bags also are
required to collect those bags for recycling. Bags collected by
Hannaford stores, for example, get recycled into composite
decking, said Megan Hellstedt, Hannaford's environmental
manager.

"We started selling reusable bags in 1990, or sooner." Now,
Hellstedt said, "It's catching some steam."

Koffman said he's eager to sit down with the grocery store
chains, but he said he also will keep pushing for legislation,
even if that comes after the end of his term.

Koffman, whose son is a veteran of the Persian Gulf War and now
works as an engineer in Baghdad, compares giving up plastic
bags to sacrifices his parents made during World War II.

"If we could make sacrifices then," he said, "why couldn't we
make a small sacrifice now?"

Staff Writer John Richardson can be contacted at 791-6324 or at:

jrichardson@pressherald.com

Copyright © 2007 Blethen Maine Newspapers

Hoping to buy wood? Get in line

Seasoned firewood is pricey or already sold. Many hoping to avoid
oil bills are out of luck.

By NOEL K. GALLAGHER, Staff Writer
November 25, 2007

People looking to lower their home heating bills by burning
more firewood are out of luck if they haven't already ordered.

Most firewood stocks were committed to regular customers by
the end of October, several dealers say, and what's left on the
market is either green wood not suitable for immediate burning
or hard-to-find -- and pricey -- seasoned or dry wood.

"I'm certainly seeing more people," said John Sylvester of Alfred,
who sells about 300 cords of green and seasoned firewood a
year. "They're getting frightened because (heating costs) have
taken such a dramatic increase."

Today, many dealers in southern Maine have phone messages
on their machines saying they are out of stock, or down to
selling just green wood. Prices have stayed steady at between
$150 and $180 for green wood in the last year, but seasoned
wood has jumped from about $220 a cord to as high as $275.

Consumers are rethinking their home heating strategies after
getting sticker shock from filling an oil tank with $3-per-gallon
oil. The price was about $1.80 per gallon last year.

"I had someone the other day who ordered a half cord and they
changed their order to two cords," said Sylvester, an Alfred
selectman who runs a firewood business with his daughter. "He
said he'd just got a bill for filling his oil tank for $700, and it
used to be $200 or $300."

The firewood market in Maine is made up of mostly small-time
operations. Cutting, spitting and drying wood is a long process,
so the marketplace is not responsive to sudden demand shifts.
That inability to ramp up supply quickly is bad news for people
who were hoping to burn less oil and more firewood.

"Obviously, with $3 oil, people who had only thought about
burning wood are doing more than thinking about it," said Peter
Lammert of Thomaston, a forester with the Maine Forest Service
who goes through about 8 cords of wood a year heating his
home with firewood.

Carol Thompson of Alfred said she's taken to shutting off whole
sections of her 225-year-old colonial farmhouse in Alfred and
only heating a few rooms to keep ahead of her heating bills. She
keeps the thermostat at a setting that won't let the pipes freeze
and uses her wood stove to heat the living room, where she
sleeps on cold nights.

"A lot of people I know are living in one room in their house,"
said Thompson, adding that she's one of the people who got
caught short on firewood this winter.

"I just took stock of my wood the other day, and I'm not going to
make it," she said. "(Wood) is really expensive, but it's a lot less
than heating oil."

At this late date, the problem is less with cost and more with
supply.

"Most everyone is out of dry wood," said Bob Drew of
Kennebunk, a third-generation firewood seller. His stock of
roughly 80 cords usually lasts through spring, but on
Wednesday, Drew said he expects to run out before the end of
the year. Demand is so high, he's been supplying another dealer
in the area.

"He's bought four cords in the last four days," Drew said of the
Wells dealer. "He's pretty much out of wood."

Lammert said some people always wait to order their firewood.

"I call it the 'first-frost syndrome.' Some people have to scrape
the first frost off their windshield before they get their
firewood," said Lammert, who gets his firewood before the first
thaw of spring, and has it cut, split, stacked and drying on his
property by May 1.

Dry wood or seasoned wood is difficult to find, and pricey if you
can find it.

"People that are buying their wood now are facing the likelihood
of just buying green wood," Lammert said. "Seasoned wood is
not going to be in supply."

Some firewood dealers hold out, knowing there will be increased
demand late in the season, said supplier Jeff Carver of Buxton,
who consistently sells all his wood by the end of October.

"That's why the prices are starting to climb up," said Carver.
"People hold onto it until November and December, when they
can name their price. They'll get up to $250 a cord. I, myself,
just want to get rid of it."

Demand is so high, it has even put an unexpected crimp in some
fire-burning stove sales efforts.

"We're getting a little bit of backlash," said Greg Palmer, a
salesman at Finest Hearth and Home in Yarmouth. More people
are coming in to look at wood and pellet stoves, but the store's
having a hard time hooking the customers up with suppliers, he
said.

"We love that people want to buy more stoves, but they're angry
when they can't use it," he said. "They come in, they buy a stove
and they have to heat the pig. It's a two- to five-thousand-dollar
investment, and it's tough if they can't find (heating) product."

Staff Writer Noel K. Gallagher can be contacted at 282-8226 or
at:

ngallagher@pressherald.com

Copyright © 2007 Blethen Maine Newspapers

Cleaning up with clean energy

Maine could prosper as a supplier of power from renewable
resources -- but Mainers would have to act soon.

KURT ADAMS (Chairman of Maine Public Utilities Commission)
November 25, 2007

High energy costs and climate change are creating enormous
challenges for New England. But those challenges can work to
Maine's benefit, if the state begins now to chart its own course.

Responding to popular and governmental demands for "clean"
energy that doesn't create excessive greenhouse gases, regional
and global energy players are on the hunt for more electricity
that's made from renewable resources, like wind, water and the
sun. As it happens, Maine has more of these renewable
resources than any other state in New England.

Not only does renewable energy reduce pollution, but its
relatively steady pricing structures also free energy suppliers
from the volatility of the fossil fuel markets. Through sensible
development of new energy regulations and infrastructure, our
state could boost its economy while taking a leadership role in
the region's response to both global warming and rising energy
prices.

Maine must act quickly. Recent and upcoming federal
regulations could pre-empt the state's ability to determine its
own energy future. The time has come for Mainers to decide, on
their own terms, how to use this state's native resources against
the greatest threat of our times, global warming, and prosper as
a result.

HIGH ENERGY COSTS, HIGH CO2

Since 2000, New England has seen a 42 percent increase in retail
electricity prices, driven by volatile but generally rising fossil fuel
prices.Electricity generated using natural gas has mushroomed
from a fraction of the energy mix to a majority in just 10 years.

Emissions of carbon dioxide, a powerful greenhouse gas, have
vaulted as electricity producers have shifted away from sources
of electric generation that emit comparatively little CO2. And
emissions of CO2 from power generation in this region are
projected to grow substantially to meet rising electricity demand
over the next decade.

Leaders in the Northeastern states have responded by requiring
utilities to put more renewable energy into their portfolios, and
by committing to the Regional Greenhouse Gas Initiative. RGGI,
as it's called, sets limits on the amount of carbon pollution
major power plants can create. It also establishes a marketplace
for a new kind of commodity -- carbon credits that can be sold
by generators that work under their emissions cap, and bought
by those that exceed it. The system rewards efficiency and CO2
reduction and is similar to programs that have succeeded in
reducing other pollutants.

RGGI caps CO2 emissions from large power plants at current
levels in 2009, and then ratchets them down by 10 percent
beginning in 2015. RGGI's goals will be met, in part, by revenue
it will create in order to fund aggressive investments in energy
efficiency. Efficiency is one of those win-win measures:
Consumers and businesses save money when they use fewer
electrons, while reduced demand means less pollution, including
CO2.

Still, even with more efficient energy use, the combined
demands of renewable standards and RGGI mean that New
England will need as much as 8,000 megawatts of energy
produced with little or no carbon dioxide emissions. That's an
enormous amount of power, enough to light 8 million homes.

MAINE IN THE MIDDLE

Amidst this complex web sits Maine and its abundance of
renewable energy sources, from 19th-century hydrodams to
advanced wind turbines and even -- in the foreseeable future --
tidal power.

Right now, wind offers the most substantial growth opportunity:
It is here and endless. There are multiple wind projects in the
works in Maine, comprising more than 1,000 MW of generation
-- that is, enough to power 1 million homes. Analysts believe
that roughly another 3,000 MW of wind capacity could be
developed in Maine.

Maine is also blessed by its strategic location between major
sources of energy to the north, and markets to the south. A
recent report by Maine and New Brunswick officials identified
nearly 7,000 MW of renewable and low-emission power
generation resources that could come on line in Atlantic Canada
for export to the New England market by 2015.

Together, Maine and Atlantic Canada can produce 11,000 MW of
new, low-impact energy generation to serve the region -- more
than enough to meet the demand of the region's renewable
energy portfolios and top-end estimates of what RGGI requires.
And it's energy that will be largely insulated from the financial
and other risks that come with imported fossil fuels.

DEVELOPING ENERGY INFRASTRUCTURE

In order to unlock this potential, the state would need to host
several major generators, including wind farms, within its
borders. Maine would also need to host new transmission lines
to move power from here and from Canada to market

Large generation projects and transmission lines could challenge
us all in many ways. Project developers must bring their
expertise and capital to bear on projects that work for everyone
in Maine, not just shareholders. Siting agencies must make
certain that new energy projects do not harm the natural and
cultural resources that we hold dear, and that form the
backbone of our economy. We at the PUC must ensure that only
transmission projects that are in the public interest will be
permitted.

For all of us, three principles should guide the development of
new energy infrastructure.

n First, Maine's special places and its character must not be
sacrificed to uncontrolled infrastructure development. Logical
standards for balancing competing environmental, economic
and community interests must be employed. And most
important, citizens must take their role in guaranteeing that
balance, by fully engaging developers and regulators during the
permit process.

n Second, we must see a benefit in our monthly electric bills.
Right now, federal rules force Mainers to subsidize energy
investments in larger, wealthier areas to our south. The Maine
PUC is fighting some of these rules in court, and the commission
soon will issue an analysis of the pros and cons of leaving the
regional organization that administers them. When new energy
systems are created to meet demand and greenhouse gas goals,
states like Maine which host regional energy infrastructure
should not be penalized by regional or federal rules.

n Finally, energy project developers should employ Mainers in
the construction and operation of their facilities. If Maine is to
supply the kilowatts for a new era of low-impact energy use, the
jobs created by this cutting-edge growth industry should be
located here.

USE IT OR LOSE IT

If Maine wants to keep control of its energy future, quick action
is needed.

Two years ago, Congress passed a law that allows the U.S.
secretary of energy to establish National Interest Electricity
Transmission Corridors. Designated corridor states basically
have two choices: permit a project within the corridor, or face
having it permitted for them -- even when it may harm the
state's consumers or environment.

Gov. John Baldacci and Maine's congressional delegation have
worked against a corridor designation here. But states' fears are
being realized in New York, Pennsylvania and Virginia, where
local uproar has greeted a corridor designation by the U.S.
Department of Energy. And concerns are being elevated by a
proposed amendment to the energy law that would broaden
federal authority by allowing pre-emption of state regulations
governing development of power lines serving renewable
resources, including wind.

It is simply not acceptable for Maine to become a generation
park controlled from beyond its borders. There is a fast-closing
window for the state to create a regional energy corridor on
Maine's own terms.

I have been working on energy issues in Maine for 10 years. I
have never before witnessed a time of such challenge and
opportunity. I am confident, however, that we will navigate
these difficult times successfully if we channel development
along sound principles, and ensure that decisions about Maine's
economic and environmental future are made not in Washingon,
but here in Maine.

Copyright © 2007 Blethen Maine Newspapers

Pumped to be hot, hot, hot

A Bangor company is making a high-efficiency heat pump designed
to work in cold climates.

By TUX TURKEL,
Staff Writer November 25, 2007

BANGOR -– A headline last year on the cover of Architectural
Record magazine posed this provocative question: "Can a new
kind of heat pump change the world?"

The answer is being formulated now in a small warehouse
here.

This is the headquarters of Hallowell International. The two-
year-old company makes a combined heating and cooling
system that uses patented technology to improve the cold-
weather efficiency of the basic heat pump.

Electric heat pumps extract warmth from air or water and
transfer it in order to cool or heat living space. They're the
dominate heating and cooling source in the Southeast.

But heat pumps are rare in Maine, where eight in 10 homes
burn oil. One reason: Conventional air-source models don't
work well when the temperature drops below freezing.

If somebody could design and sell a high-efficiency heat
pump that keeps a home comfy at minus 30 degrees for half the
price of heating oil, well, maybe that could change the world.
Especially a world reeling from high energy costs and the
growing impact of climate change.

"It's a pretty bold statement," said Duane Hallowell, the
founder and president of Hallowell International, reacting to the
magazine headline. "But at the same time, yeah, it should be
our mission."

The new heat pump being manufactured and sold by
Hallowell has been 12 years in the making. After one false start,
the product appears ready for prime time.

The company has lined up 2,000 dealers in 35 states and all
Canadian provinces.

It has sold roughly 2,400 units this year and installed 1,000
of them.

It has five related products under development for roll-outs
in 2008.

Also next year, the company expects to expand into a
refurbished mill in Old Town to produce a commerical-size unit.

Hallowell won't discuss finances at the privately held
company. But he said his five partners and 50 investors have the
resources to grow and diversify.

Challenges remain. Hallowell International doesn't have the
brand recognition of the big dogs, like Carrier and Lennox. The
unit's not inexpensive, either; installation runs $8,000 to
$12,000, roughly 20 percent more than a conventional heating
and cooling system.

And like any startup with a hot new thing, Hallowell could
implode if it doesn't have the management oversight to control
manufacturing and installation quality.

That said, maybe timing and technology finally have
intersected to put a Maine-made heat pump on a world map.

The technology being sold today by Hallowell International
was formerly called the Cold Climate Heat Pump. It recently was
renamed the Acadia Combined Heating and Cooling System.

The technology was developed in 1995 by David Shaw, a
former compressor designer at Carrier Corp. in Connecticut.
Shaw was inspired to design a low-temperature heat pump after
getting a high electric bill in his condo, which was heated by a
conventional pump.

Between 2002 and 2005, a subsidiary of Nyle Corp., a
heating and cooling technology firm located in Brewer, licensed
the rights to Shaw's patent and produced more than 150 units.
The product never really took off, however. News reports
attributed the failure in part to installation and manufacturing
problems.

Hallowell, a Bangor native and engineer, then purchased the
patent from Shaw, who currently serves as the company's chief
technology officer.

Hallowell worked with state and local economic
development officials to lease a
city-owned warehouse.

He won a $200,000 loan from the city, to pay rent and buy
equipment. His loan agreement requires the company to create
20 jobs this year and 50 next year. The work force has already
reached 26, Hallowell said, with manufacturing wages topping
$14 an hour.

Hallowell has spent a lot of time testing the unit, receiving
industry certifications and setting up a distributor network.

The company also attends trade shows and courts the
industry media. Earlier this month, Duane Hallowell was in New
York talking to home magazines and meeting with builders and
condo associations.

The Acadia has caught the attention of The Air
Conditioning, Heating and Refrigeration News. The Acadia won a
dealer design award sponsored by the magazine.

Mike Murphy, the magazine's editor in chief, said the
market for heat pumps is growing fast, up from 5 percent in the
1980s to nearly 30 percent of all combined heating and cooling
units sold today.

Hallowell's product, Murphy said, must carve out a niche in
places where heat pumps are common, like the Southeast, and
gain market share in the Northeast, where homeowners are
shifting away from oil heat.

It also must compete in cold climates with so-called ground
source or geothermal heat pumps, which are efficient but
require drilling or underground loops.

"There are a lot of heat pumps being sold," he said. "It's
going to take something to grab market share from the big
players."

The Acadia's top markets now include Canada, which has
plenty of homes with expensive electric heat, the Middle Atlantic
states, where oil and natural gas costs are rising, and the Pacific
Northwest, which has limited natural gas distribution.

The unit works well in cold weather, according to Jim
Chaters, national sales representative at Mits Air Conditioning
Inc. in Mississauga, Ontario. It's generating interest in
Manitoba, where winters are severe.

Chaters has 27 years experience in heating and cooling, and
is promoting Hallowell in Canada. Electric resistance heat is
common in Canada, Chaters said, but builders are looking for
cheaper alternatives.

The Acadia also is drawing interest from green builders.
Two low-energy subdivisions going up in the Ottawa area will
use the Acadia because its high efficiency will allow contractors
to reduce wall and window insulation levels and still meet green
building standards.

The technology is sound and easy to maintain, Chaters said.
The major challenge for Hallowell is to make sure it expands
through a well-trained dealer network, so installations are done
correctly.

"We're very excited," he said. "It has a huge potential, if it's
handled properly."

The Acadia is likely to generate the most interest in areas
where homes need both heating and air conditioning. But
savings on heating bills alone can make the unit cost-effective,
according to an online calculator on Hallowell's Web site.

For instance, a 2,000-square-foot home in Portland that
costs $2,724 a year to heat with oil could be warmed for $1,393
with the Acadia, roughly half the price. Calculators also are
available to compare propane, electric heat, conventional heat
pumps and geothermal systems.

Jared Ashley considered a geothermal system for his new
2,400-square-foot Cape that he built last year in Levant, west of
Bangor. But he heard about the Hallowell unit and had one
installed, for roughly $10,000. Operation is quiet and the duct
temperature, while not hot like an oil-fired furnace, is steady
and comfortable, he said. The company periodically monitors his
unit to track real-world conditions.

Inside Hallowell's 90,000- square-foot factory, engineers
monitor performance in insulated chambers where the
temperature is kept well below zero.

On the factory floor last week, workers were welding
compressors onto the unit bodies. Further down the assembly
line, the bodies were mounted in cabinets and wired with control
panels. The crew can assemble 20 or so units a day.

That output isn't meeting demand. But standing last week
beside 75 units boxed for shipping, Duane Hallowell said he had
to balance growth with the need to maintain quality control.

It's an interesting challenge for a small company with a hot
product.

When the Bangor Daily News covered the Acadia's official
product launch last month, local residents came to the factory
and tried to buy units off the assembly line.

Staff writer Tux Turkel can be contacted at 791-6462 or at:

tturkel@pressherald.com

Copyright © 2007 Blethen Maine Newspapers

Wet-wash wonder

A local business offers an alternative to dry cleaning that shuns
potentially toxic chemicals.

By JOHN RICHARDSON,Staff Writer
November 26, 2007

Carson Hanrahan sends his suit jackets to the cleaners, just as
the care labels advise him to do.

His jackets and other clothes don't get the typical chemical dry-
cleaning, however. They're cleaned with water and detergent in
what is basically a big, computer-controlled washing machine.

"The chemicals they use are friendlier for the environment, so
that makes me feel better about it," said Hanrahan, who lives in
Portland.

A new trend in dry cleaning -- wet cleaning -- has reached
Maine.

One Portland-based chain, Accent Cleaners, now is promoting
the service as a nontoxic, eco-friendly alternative to the
traditional "dry" process. The company invested in two
computer-controlled washing machines that use water and
detergent and, it says, can safely clean virtually anything, from
silk dresses to wool suits.

"You've got to be gentle with it," said Ferd Bailey, manager at
Accent Cleaners on Riverside Street, but "soap and water does
much better anyway."

Cleaners and customers around the country have been shifting
toward wet cleaning for several years to reduce the use of the
dry-cleaning solvent perchloroethylene, or perc. Although the
chemical's use is much more carefully controlled now than it was
years ago, it is a suspected human carcinogen and the reason
state officials are testing soil and groundwater at 187 current
and former dry-cleaning sites statewide. Most of those sites are
expected to have contamination, according to the Maine
Department of Environmental Protection.

Traditional dry cleaning isn't dry at all, but the chemical used
does not shrink fabrics the way water can, under the right
conditions.

In the case of dry cleaning, clothes are placed in a large washing
machine and bathed in perc, a degreasing chemical that also has
a variety of industrial uses. The chemical then essentially is
vacuumed out of the clothes, which come out of the machine dry
and mostly wrinkle-free.

The perc itself is contained in the machine and reused, except
for the sludge that is removed for disposal.

Accent's new wet-clean machine is similar to an industrial-size
washing machine, except that it has about 30 settings and can
handle clothes much more gently than any residential model
does. It's also a lot more expensive. Ingrid Noren, a co-owner of
Accent Cleaners, said the larger of the company's two machines
cost $13,000.

The large investment makes wet cleaning an unusual service in
the dry-cleaning business. It's also more labor-intensive,
because clothes have to be air-dried and require more pressing
to get wrinkles out.

On the other hand, "the wet cleaning doesn't generate any
waste," Noren said. The company charges the same for wet
cleaning or dry cleaning.

Accent has branches in Portland, Falmouth and Cape Elizabeth,
although all the cleaning is done in Portland. The company also
cleans clothes dropped off at some laundromats.

Some dry cleaners offer different alternatives to perc. Pratt
Abbott Cleaners, for example, offers dry cleaning using a
different solvent that it says is less environmentally toxic. Also,
around the country, some dry cleaners have switched to liquid
carbon dioxide as the chemical of choice.

Many dry cleaners offer wet cleaning in conventional machines,
but won't put dry-clean-only garments in them. Accent will wet-
clean almost anything.

The owners and employees tested and fine-tuned the process
on unclaimed clothes, as well as on their own wardrobes.

Nils Noren, a co-owner, put his own tuxedo through the
machine. Not only did it clean well, he said, but he took
advantage of the wet fabric to stretch it just enough to make it
fit again.

Ingrid Noren plans to test it on a collection of wedding gowns,
which are too delicate for dry cleaning.

"Almost everything can be wet cleaned," she said. One exception
is tailored silk suits, because the different types of fabrics react
differently to water, she said.

The machine uses cold water to prevent colors from running,
and it actually removes stains better than the chemical wash
does, she said.

Hanrahan, the customer from Portland, is a big fan of the wet-
cleaning process. He uses it for all of his dry-clean-only clothes
and hasn't had any problems, he said.

"I'm a smoker, and it actually works out better," he said. "The
clothes just feel fresher when they come out."

Hanrahan wet-cleans his laundry through Washboard Laundry
on Danforth Street in Portland. Washboard has made a name for
itself as an energy-efficient, eco-friendly laundromat, and it
sends its dry cleaning to Accent so customers can go wet and
avoid perc.

"It's one of the reasons why a lot of people come to us --
because they know we offer it," said Jason Wentworth, the
owner. "Five years ago, hardly anyone knew that wet cleaning
existed. Once they learn what
chemical dry cleaning is really all about -- that their clothes are
soaked in a liquid petrochemical solvent -- then they're pretty
open to wet cleaning."

Most of his customers now request the service instead of dry
cleaning, and complaints about damaged clothing have been as
rare with wet cleaning as they have been with dry cleaning,
Wentworth said.

"What it's trying to do is essentially mimic hand washing. The
machine is trying to simulate that in a much more sophisticated
way," he said.

Eventually, Wentworth predicted, perc will be banned because of
its health effects. "Then solutions like wet cleaning will become
the norm," he said.

There's no evidence that the chemical wash makes dry-cleaned
clothes hazardous to wear, but it can be dangerous at industrial
exposure levels and it has been found to contaminate soil,
groundwater and even neighboring homes and businesses.

Perc vapors can cause irritation of the eyes, nose, throat or skin.
Long-term exposure causes cancer in laboratory animals and is
considered a possible human carcinogen by the U.S.
Environmental Protection Agency.

While federal and state laws now require that perc be carefully
controlled, dry cleaners used to exhaust vapors straight into the
air, and spills and leaks were common. Perc that ends up in the
soil can contaminate groundwater and create vapors that seep
into foundations and accumulate inside buildings.

Last summer, the state DEP found unsafe levels of air
contamination in a Sanford apartment building that once housed
a dry cleaner. The building now has a sub-foundation ventilation
system to keep the chemical vapors outside.

Tracy Weston of the DEP has identified 187 potential
contamination sites where there is, or was, a dry cleaner. The
state is testing the soils at each site, but only has enough
funding to test two a year, she said.

"We're looking at ones we think would cause a public health
threat," she said, adding that when she looks for the pollution,
she usually finds it.

Neither the state nor the cleaners have conducted any actual
cleanups yet, she said. That process probably would be
expensive because the chemical can sink deep into the soil and
the groundwater.

Accent has been experimenting with wet cleaning since the
Norens bought the business about five years ago. It recently
began promoting it as an alternative.

Wet cleaning now is a small but growing part of their business.

"I think it's the only way it's going to be in the future," Nils
Noren said.

Staff Writer John Richardson can be contacted at 791-6324 or at:

jrichardson@pressherald.com

Copyright © 2007 Blethen Maine Newspapers

MAINE VOICES - New energy bill is anti-consumer

If it gets passed, look for higher prices, less supplies and a major economic downturn.

Donald A. Grant (Donald A. Grant of Orono is chair and professor emeritus of the Mechanical Engineering Department of the University of Maine. )

November 26, 2007

At a time when energy costs are spiraling upward,
presidential candidates are persistently avoiding difficult energy
issues.

Such complacency is misguided, because Congress is debating
proposed legislation that would have harsh consequences for
Americans.

Energy efficiency and conservation are a necessary part of any
strategy to deal with our challenges, but they cannot work
without accompanying measures to increase domestic oil and
gas production.

Without a change in the basic strategy, the result will be higher
energy costs. And that will mean Americans will have to spend a
larger percentage of their income to maintain their current level
of consumption, let alone produce any growth.

The next president will have to confront not just the challenge of
reducing foreign-oil dependence but also increasing domestic
energy production.

Facing these challenges will be even more difficult if Congress
approves proposed legislation that would restrict the supply of
energy available to the U.S. economy while increasing its cost.
The consequences for the Northeast in particular would be
severe.

A new study by CRA International, one of the nation's leading
economic consulting firms, confirms that the proposed
legislation will have multiple negative effects on the economy --
less employment, investment and economic output.

According to CRA's projections, 4.9 million jobs would be lost by
2030, including 384,000 in the Northeast, while the average
American household's annual purchasing power would decline
by $1,720.

This legislation repeats failed energy policies of the past with
government interference in the marketplace. It mandates the use
of ethanol, five times more than is currently produced.

It requires electric utilities to obtain 15 percent of their power
from renewable energy sources like solar and wind, though that
would be extremely costly in some parts of the country.

Moreover, it imposes civil and criminal penalties for alleged
"price gouging," even though repeated investigations by the
Federal Trade Commission have uniformly found that market
forces drive prices.

It calls for a national plan to curb oil use by 10 million barrels
per day by 2031, despite government forecasts showing the
need for significantly more energy. It further restricts domestic
oil exploration and production. And it adds more than $15
billion in taxes on the oil industry, much of which will be passed
along to consumers.

Absent from the proposed legislation is anything that would
encourage domestic oil and natural gas production. The House
and Senate energy bills would not produce a single additional
drop of oil.

That's astonishing, given that the United States has an
extraordinary amount of oil and gas reserves, both offshore and
on federal lands that are closed to energy development.

Plainly, higher taxes on oil companies won't do anything to
encourage increased investment in finding and producing more
oil. Nor will a provision that would require the companies to pay
higher royalties on leases in deepwater areas.

If domestic oil production is discouraged, as happened in 1980
when Congress passed a windfall oil-profits tax, the result will
be even greater payments to oil-producing countries that don't
always have Americans' best interests in mind.

Mark this legislation as the first step backward toward the oil
and natural gas price controls of the 1970s. That era made
shortages worse and hurt American consumers with long gas
lines and rationing.

So if polls now show voters are in a foul mood, wait until this
bill's anti-consumer energy provisions begin to take effect.

-- Special to the Press Herald

Copyright © 2007 Blethen Maine Newspapers

IS WORLD OIL PRODUCTION PEAKING?

http://www.earthpolicy.org/Updates/2007/Update67.htm


Lester R. Brown


Is world oil production peaking? Quite possibly. Data from the International Energy Agency (IEA) show a pronounced loss of momentum in the growth of oil production during the last few years. After climbing from 82.90 million barrels per day (mb/d) in 2004 to 84.15 mb/d in 2005, output only increased to 84.80 mb/d in 2006 and then declined to 84.62 mb/d during the first 10 months of 2007.


The combination of world production slowing down or starting to decline while demand continues to rise rapidly is putting strong upward pressure on prices. Over the past two years, oil prices have climbed from $50 to nearly $100 a barrel. If production growth continues to lag behind the increase in demand, how high will prices go?


There are many ways of assessing the oil production prospect. One is to look at the relationship between oil discoveries and production, a technique pioneered by the legendary U.S. geologist M. King Hubbert. Given the nature of oil production, Hubbert theorized that the time lag between the peaking of new discoveries and that of production was predictable. Noting that the discovery of new reserves in the United States peaked around 1930, he predicted in 1956 that U.S. oil output would peak in 1970. He hit it right on the head.


Globally, oil discoveries peaked in the 1960s. Each year since 1984, world oil production has exceeded new oil discoveries, and by a widening gap. In 2006, the 31 billion barrels of oil extracted far exceeded the discovery of 9 billion barrels.


The aging of oil fields also tells us something about the oil prospect. The world’s 20 largest oil fields were all discovered between 1917 and 1979. (See data at http://www.earth-policy.org/Updates/2007/Update67_data.htm) Sadad al-Husseini, former senior Saudi oil official, reports that the annual output from the world’s aging fields is falling by 4 mb/d. Offsetting this decline with new discoveries or with more-advanced extraction technologies is becoming increasingly difficult.


Yet another way of assessing the oil prospect is to look separately at the leading oil-producing countries where production is falling, the ones where production is still rising, and those that appear to be on the verge of a downturn. Among the leading oil producers, output appears to have peaked and turned downward in a dozen or so and to still be rising in nine.


Among the post-peak countries are the United States, which peaked at 9.6 mb/d in 1970, dropping to 5.1 mb/d in 2006; Venezuela, where output also peaked in 1970; and the two North Sea oil producers, the United Kingdom and Norway, which peaked in 1999 and 2000.


The pre-peak countries are dominated by Russia, now the world’s leading oil producer, having eclipsed Saudi Arabia in 2006. Two other countries with substantial potential for increasing output are Canada, largely because of its tar sands, and Kazakhstan, which is developing the Kashagan oil field in the Caspian Sea, the only large find in recent decades. Other pre-peak countries include Algeria, Angola, Brazil, Nigeria, Qatar, and the United Arab Emirates.


Among the countries where production may be peaking are Saudi Arabia, Mexico, and China. The big question is Saudi Arabia. Saudi officials claim they can produce far more oil, but the giant Ghawar oil field—the world’s largest by far and the one that has supplied half of Saudi oil output for decades—is 56 years old and in its declining years. Saudi oil production data for the first eight months of 2007 show output of 8.62 mb/d, a drop of 6 percent from the 9.15 mb/d of 2006. If Saudi Arabia cannot restore growth in its oil production, then peak oil is on our doorstep.


In Mexico, the second-ranking supplier to the United States after Canada, output apparently peaked in 2004 at 3.4 mb/d. U.S. geologist Walter Youngquist notes that Cantarell, the country’s dominant oil field, is now in steep decline, and that Mexico could be an oil importer by 2015. Production in China, slightly higher than in Mexico, may also be about to peak.


A number of prominent geologists are convinced that global oil production has peaked or is about to do so. “The whole world has now been seismically searched and picked over,” says independent geologist Colin Campbell. “Geological knowledge has improved enormously in the past 30 years and it is almost inconceivable now that major fields remain to be found.”


Kenneth Deffeyes, a highly respected geologist, said in his 2005 book, Beyond Oil, “It is my opinion that the peak will occur in late 2005 or in the first few months of 2006.” Youngquist and A. M. Samsam Bakhtiari of the Iranian National Oil Company each projected that production would peak in 2007.


The Energy Watch Group in Germany, which recently analyzed oil production data country by country, also concluded that world oil production has peaked. They project it will decline by 7 percent a year, falling to 58 mb/d in 2020. Bakhtiari projects a decline in oil production to 55 mb/d in 2020, slightly lower than the German group. In stark contrast, the IEA and the U.S. Department of Energy are each projecting world oil output in 2020 at 104 mb/d.


The peaking of world oil production will be a seismic event, marking one of the great fault lines in world economic history. When oil output is no longer expanding, no country can get more oil unless another gets less.


Oil-intensive industries will be hit hard. Cheap airfares will become history, for instance. The airline industry’s projected growth of 5 percent a year over the next decade will evaporate. The food industry will be severely affected by rising oil prices, since both modern agriculture and food transport are oil-intensive. The automobile industry will suffer as well when demand for cars plummets. Pressures will intensify on the three or more major auto companies that are developing plug-in hybrid cars that run largely on electricity to bring them to market quickly.


Higher oil prices have long been needed both to more accurately reflect the indirect costs of burning oil, such as climate change, and to encourage more-efficient use of a resource that is fast being depleted. While higher prices are desirable, the rise should not be so abrupt that it leads to severe economic disruptions.

Some countries are much more vulnerable to an oil decline than others. For example, the United States—which has long neglected public transportation—is particularly vulnerable because 88 percent of the U.S. workforce travels to work by car.


Since options for expanding supply are limited, efforts to prevent oil prices from rising well beyond $100 per barrel in the years ahead depend on reducing demand, largely within the transportation sector. And since the United States consumes more gasoline than the next 20 countries combined, it must play a lead role in cutting oil use.

A campaign to reduce oil use rapidly might best be launched at an emergency meeting of the G-8, since its members dominate world oil consumption. If governments fail to act quickly and decisively to reduce oil use, oil prices could soar as demand outruns supply, leading to a global recession or -- in a worst-case scenario -- a 1930s-type global depression.


# # #


Lester R. Brown is President of the Earth Policy Institute and author of Plan B 3.0: Mobilizing to Save Civilization (forthcoming).


Data and additional resources at www.earthpolicy.org.

U.N. Report Describes Risks of Inaction on Climate Change

By ELISABETH ROSENTHAL

VALENCIA, Spain, Nov. 16 ­ In its final and most powerful report, a United Nations panel of scientists meeting here describes the mounting risks of climate change in language that is both more specific and forceful than its previous assessments, according to scientists here.

Synthesizing reams of data from its three previous reports, the United Nations Intergovernmental Panel on Climate Change for the first time specifically points out important risks if governments fail to respond: melting ice sheets that could lead to a rapid rise in sea levels and the extinction of large numbers of species brought about by even moderate amounts of warming, on the order of 1 to 3 degrees.

The report carries heightened significance because it is the last word from the influential global climate panel before world leaders meet in Bali, Indonesia, next month to begin to discuss a global climate change treaty that will replace the Kyoto protocol, which expires in 2012. It is also the first report from the panel since it was awarded the Nobel Peace Prize in October ­ an honor that many scientists here said emboldened them to stand more forcefully behind their positions.

As a sign of the deepening urgency surrounding the climate change issue, the report, which was being printed Friday night, will be officially released by Secretary General Ban Ki-moon on Saturday.

The full report was embargoed from news organizations until Saturday. But drafts have been circulating for weeks, and descriptions of its findings began to appear on Web sites and in news agency reports on Friday. Bush administration officials held a news conference to discuss the report but insisted that their comments be withheld until after its official release.

“This document goes further than any of the previous efforts,” said Hans Verolme, director of the World Wildlife Fund’s Global Climate Change Program. “The pressure has been palpable ­ people know they are delivering a document that will be cited for years to come and will define policy.”

The previous three sections, released between February and April, focused on one issue at a time: the first on science, the second on how the world could adapt to warming and the third about how countries could “mitigate,” or reduce the greenhouse gases produced.

This fourth and final assessment ­ the so-called synthesis report ­ seeks to combine lessons from all three. Its conclusions are culled from data contained in the thousands of pages that were essentially technical supplements to the panel’s previous publications. How that data is summarized and presented to the world is a powerful guide to what the scientists consider of utmost importance at the end of a five-year process, offering concrete guidelines for policy makers.

“You look to a synthesis report to provide clarity, to clarify what was obscure in previous reports,” said Michael Oppenheimer, a climate scientist at Princeton University. “Now, how can we take these findings and formulate a policy response that’s quick enough and big enough?”

While drafts of the panel’s reports are written by panels of scientists, the language is reviewed and often altered by delegates from 130 governments who meet before their final approval and release. Those negotiations took place here this week, and were often contentious, with the United States, China and India raising many objections, said scientists who spoke on condition of anonymity because they are not allowed to publicly refer to any countries by name.

The scientists and country representatives who had flocked here this week to participate in negotiations on the final wording applauded as the panel’s chairman, Rajendra Pachauri, declared the panel’s years of work concluded, just after 10:30 p.m. on Friday.

Even though the synthesis report is more alarming than its predecessors, some researchers believe that it still understates the trajectory of global warming and its impact. The I.P.C.C.’s scientific process, which takes five years of study and writing from start to finish, cannot take into account the very latest data on climate change or economic trends, which show larger than predicted development and energy use in China.

“The world is already at or above the worst case scenarios in terms of emissions,” said Gernot Klepper, of the Kiel Institute for World Economy in Kiel, Germany. “In terms of emissions, we are moving past the most pessimistic estimates of the I.P.C.C., and by some estimates we are above that red line.”

The panel presents several scenarios for the trajectory of emissions and climate change. In 2006, 8.4 gigatons of carbon were put into the atmosphere from fossil fuels, according to a study in the proceedings of the National Academy of Science, which was co-written by Dr. Klepper. That is almost identical to the panel’s worst case prediction for that year.

Likewise, a recent International Energy Agency report looking at the unexpectedly rapid emissions growth in China and India estimated that if current policies were not changed the world would warm six degrees by 2030, a disastrous increase far higher than the panel’s estimates of one to four degrees by the end of the century.

While the United States, Saudi Arabia and China tried to change the text in order to play down the consequences of global warming, developing nations ­ which will bear the initial brunt of climate change ­ were much more forceful than at previous meetings in opposing these efforts, one scientist who was in the negotiating room said.

"I suspect that will continue,” he said. “As they feel more and more threatened by the sea and the storms they will insist that, as one of them put it, ‘We do not want this report to be warm and fuzzy when the reality is cold and risky,’ or something like that,” he said.

One novel aspect of the report is a specific list of “Reasons for Concern.” It includes items that are thought to be very likely outgrowths of climate change that had been mentioned in previous reports, like an increase in extreme weather events.

But it for the first time includes less likely but more alarming possibilities, like the relatively rapid melting of polar ice. Previous reports focused more on changes the scientists felt were “highly likely.”

“This time, they take a step back and look at the totality,” Dr. Verolme said. “Saying it is less likely to occur, but if it does we are fried.”

One such area is the future melting of ice sheets in Greenland and western Antarctica. In earlier reports, the panel’s scientists acknowledged that their computer models were poor at such predictions, and did not reflect the rapid melting that scientists have recently observed. If these areas melt entirely, seas would rise 40 feet, scientists said. While scientists are certain that the sheets will melt over millennia, producing sea-level rises, there is now evidence to suggest that it could happen much faster than this, perhaps over centuries.

“In my view that would make it not just difficult, but impossible to adapt successfully, some of my colleagues would say catastrophic,” said Dr. Oppenheimer. “If they say that it’s possible that melting could occur in centuries leading to meters of change, that’s a headline.”

This final report also puts more emphasis on the ripple effect of small degrees of temperature change, some of which are already being seen, such as species extinctions and loss of biodiversity.

“A relatively modest degree of warming ­ one to three degrees ­ spells a lot of trouble and I think that was not clear in the previous report,” Dr. Oppenheimer said. He said part of the reason for the lack of clarity was that governments had “messed around” with the language and structure of the report during the approval process.

This time around, the consequences of different degrees of climate change will be better laid out so that the ministers who meet in Bali next month will understand the options and the consequences of inaction. “This should light a fire under policy makers,” Dr. Oppenheimer said.

Andrew C. Revkin contributed reporting from New York.

Oil Officials See Limit

Wall Street Journal
By RUSSELL GOLD and ANN DAVIS
November 19, 2007; Page A1

A growing number of oil-industry chieftains are endorsing an idea long deemed fringe: The world is approaching a practical limit to the number of barrels of crude oil that can be pumped every day.

Some predict that, despite the world's fast-growing thirst for oil, producers could hit that ceiling as soon as 2012. This rough limit -- which two senior industry officials recently pegged at about 100 million barrels a day -- is well short of global demand projections over the next few decades. Current production is about 85 million barrels a day.

The world certainly won't run out of oil any time soon. And plenty of energy experts expect sky-high prices to hasten the development of alternative fuels and improve energy efficiency. But evidence is mounting that crude-oil production may plateau before those innovations arrive on a large scale. That could set the stage for a period marked by energy shortages, high prices and bare-knuckled competition for fuel.

The current debate represents a significant twist on an older, often-derided notion known as the peak-oil theory. Traditional peak-oil theorists, many of whom are industry outsiders or retired geologists, have argued that global oil production will soon peak and enter an irreversible decline because nearly half the available oil in the world has been pumped. They've been proved wrong so often that their theory has become debased.

The new adherents -- who range from senior Western oil-company executives to current and former officials of the major world exporting countries -- don't believe the global oil tank is at the half-empty point. But they share the belief that a global production ceiling is coming for other reasons: restricted access to oil fields, spiraling costs and increasingly complex oil-field geology. This will create a global production plateau, not a peak, they contend, with oil output remaining relatively constant rather than rising or falling.

The emergence of a production ceiling would mark a monumental shift in the energy world. Oil production has averaged a 2.3% annual growth rate since 1965, according to statistics compiled by British oil giant BP PLC. This expanding pool of oil, most of it priced cheaply by today's standards, fueled the post-World War II global economic expansion.

On Oct. 31, Christophe de Margerie, the chief executive of French oil company Total SA, jolted attendees at a London conference by openly labeling production forecasts of the International Energy Agency, the sober-minded energy watchdog for industrialized nations, as unrealistic. The IEA projects production will grow to between 102.3 million and 120 million barrels a day by 2030. Mr. de Margerie said production by 2030 of even 100 million barrels a day will be "difficult."

Speaking Clearly

This is "the view of those who like to speak clearly, honestly, and [are] not just trying to please people," he bluntly declared. The French executive said many existing oil fields are being depleted at rates that will damage their geologic structures, which will limit future output more than most people allow. What's more, some nations endowed with large untapped pools of oil are generating so much revenue from their current production that they feel they don't need to further develop their fields, thus putting another cap on output.

Earlier this month, James Mulva, the chief executive of ConocoPhillips, echoed those conclusions in a speech at a Wall Street conference: "I don't think we are going to see the supply going over 100 million barrels a day.... Where is all that going to come from?" He questioned whether the industry has enough support services and people to execute projects to add that much oil production.

Even some officials from member states of the Organization of Petroleum Exporting Countries, which has long insisted on its ability to supply the world with fuel for decades hence, are breaking ranks and forecasting limits. The chairman of Libya National Oil Corp. said at the same London conference the world will have difficulty producing more than 100 million barrels a day.

A former head of exploration and production at Saudi Arabia's national oil company, Sadad Ibrahim Al Husseini, has also gone public with doubts. He said in London last month that he didn't believe there were enough engineers or equipment to ramp up production fast enough to keep up with the thirsty global economy. What's more, he said, new discoveries are tending to be smaller and more complex to develop.



Many leaders of the industry still dismiss the idea that there is reason to worry. "I am no subscriber to the theory that oil supplies have already peaked," said BP's chief executive, Tony Hayward, earlier this month in a speech in Houston.

Exxon Mobil Corp. Chief Executive Rex Tillerson has said that if companies had better access to the world's oil reserves, production would increase and prices would go down. "Sufficient hydrocarbon resources exist to play their role in meeting this growing global demand, if industry is allowed to access them," he said in a speech this month. If access were granted, Exxon Mobil believes the industry would be able to raise fuel production to meet demand in 2030 of 116 million barrels a day.

The oil industry has long been beset by doom-and-gloom scenarios, which so far haven't panned out. "The entire oil industry in the late 1970s was convinced the price [of oil] would be $100 by 1990 and we would need huge oil shale mines" to exploit oil locked away tightly in rock, says Michael C. Lynch, president of Strategic Energy & Economic Research Inc. Of course, that didn't happen, as discoveries ushered in new eras of low-priced oil in the mid-1980s through the late 1990s.

U.S. government experts are optimistic -- to a point. The Energy Information Administration, the data arm of the Energy Department, forecasts world oil production will hit 118 million barrels a day by 2030. But the agency warns that its prediction might not pan out if resource-rich nations such as Venezuela and Iraq don't invest enough in their operations.

"We know that the world is not running out of energy resources, but nonetheless, above-ground risks like resource nationalism, limited access and infrastructure constraints may make it feel like peak oil just the same, by limiting production to something far less than what is required," said Clay Sell, deputy secretary of energy, in a speech in October. Resource nationalism refers to tightening state control of oil fields to achieve political aims, often by restricting outsiders' ability to develop the oil for world markets.

'Undulating Plateau'

Two or three years ago, it was far more common for oil analysts and officials to trumpet the potential of new technology to harvest more oil. In a report last year, Cambridge Energy Research Associates, a prominent adviser to energy companies, made the comforting prediction that oil production could reach 110 million barrels a day by 2015, and "more than meet any reasonable high growth rate demand scenario we can envisage" up to that date. Because of progress being made in extracting oil through new methods, CERA said it found "no evidence" there would be a peak in oil flows "any time soon." In a later report, CERA said world oil production won't peak before 2030 and that even when it does, production will resemble an "undulating plateau" for one or more decades before declining gradually.

Oil companies have seen several years of bull-market prices, and thus of trying to produce more. This has given their executives a better sense of what is and isn't possible.

One limit: Many people think most of the world's giant fields already have been discovered. By 1970, oil-industry explorers had discovered 10 giants that could each produce more than 600,000 barrels a day, according to Matt Simmons, chairman of energy investment banking firm Simmons & Co. International. Exploration in the next 20 years, to 1990, yielded only two. Since 1990, despite billions in new spending, the industry has found only one field with the potential to top 500,000 barrels a day, Kazakhstan's Kashagan field in the Caspian Sea. And Mr. Simmons notes it is proving expensive and difficult to extract.

Big strikes are still possible. This month, Petróleo Brasileiro SA announced a deep-water find off Brazil's Atlantic coast that appears to be the largest discovery since Kashagan.

But some of the most promising geological formations are in locations that are inhospitable, for reasons of geography or, especially, politics and strife. Output from Iraq's rich fields is unlikely to grow much until security improves and outside investment returns. The future of Iranian and Nigerian production is likewise clouded by geopolitical and local instability.

Labor and construction bottlenecks also are making it difficult to develop proven fields. One of the largest obstacles is the booming commodity markets themselves: The prices of raw materials used in oil-field platforms and equipment has escalated. And during the years of low or moderate oil prices in the 1980s and 1990s, companies didn't develop enough geologists and other skilled workers to supply today's needs. "Years of underinvestment in new talent have led to a limited and aging pool of skilled workers," noted Andrew Gould, the CEO of oil-service giant Schlumberger Ltd., last month.

High oil prices have also led to steep cost inflation for drilling rigs and other equipment. Costs have soared so much that the industry is falling behind in the investment needed to sate expected future demand. To meet demand forecasts of 90 million barrels of oil a day in 2010, the industry needed to have spent $350 billion on drilling and producing in 2005, argues Larry G. Chorn, chief economist of Platts, the energy and commodities-information division of McGraw-Hill Cos. But the International Energy Agency estimates that spending on oil-field production in 2005 came to only about $225 billion, he says.

A failure to spend enough in the past few years "may have already put the industry behind the spending curve," Mr. Chorn says. As a result, he predicts "temporary shortages over several years, causing debilitating price spikes."

Compounding the problem: Most of the world's biggest fields are aging, and production at them is declining rapidly. So, just to keep global production at current levels, the industry needs to add new production of at least four million daily barrels, every year. That need is roughly five times the daily production of Alaska, with its big Prudhoe Bay field -- and it doesn't assume any demand growth at all.

Rate of Decline

Mr. Simmons scoffs at estimates that production from proven fields will decline only 4.5% a year. He thinks a more realistic rate of decline is 8% to 10% a year, especially because modern technology actually succeeds in depleting fields faster.

If he's right, the industry needs to add new daily production of at least eight million barrels -- 10 times current Alaskan production -- just to stay even.

Mr. Simmons thinks the world needs to shift its energy focus from climate change to more immediate concerns. "Peak oil is likely already a crisis that we don't know about. At the furthest out, it will be a crisis in 2008 to 2012. Global warming, if real, will not be a problem for 50 to 100 years," he says.

Oil executives who believe a production ceiling is coming are making plans to stay relevant in a world where oil production is constrained.

Mr. de Margerie said at Total's annual meeting this spring that the company was "looking into" nuclear-industry investments and had hired nuclear experts to help make strategic decisions. ConocoPhillips recently said it was considering building a commercial-scale plant to turn plentiful U.S. coal into natural gas.

Soaring energy prices have breathed new life into projects targeting "nonconventional" oil, such as that trapped in sand or shale. But these sources can't be tapped nearly as quickly or inexpensively as the big oil finds of the past.

Vivid Example

Canada's massive oil-sands deposits, which hold the largest oil reserves after Saudi Arabia's, offer a vivid example. They contain an estimated 180 billion barrels of oil. But after years of intensive development and tens of billions of dollars of investments, the sands are producing only a little more than 1.1 million barrels of crude a day. That's projected to reach three million a day by 2015. The oil deposits are so heavy that companies must either mine them or slowly steam them underground to get the oil to flow out of the sand.

Randy Udall, co-founder of the U.S. chapter of the Association for the Study of Peak Oil and Gas, has written that these unconventional oil supplies are like having $100 million in the bank, but "being forbidden to withdraw more than $100,000 per year. You are rich, sort of."

As these uncertainties mount, there is growing hope that Saudi Arabia, which has about 20% of the world's oil reserves, would ride to the rescue if needed. Saudi Aramco, the national oil company, has embarked on an ambitious plan to increase its daily production by 30%, or three million barrels, early next decade, and thus reclaim the title of top producer from Russia. But Mr. Al Husseini, the former Saudi oil executive, now an independent consultant, said others aren't doing as much, leaving the world entirely dependent on Saudi Arabia to provide extra capacity.

"Everyone thinks that Saudi Arabia will pull us out of this mess. Saudi Arabia is doing all it can," he says in an interview. "But what it is doing, in the long run, won't be enough."

Write to Russell Gold at russell.gold@wsj.com1 and Ann Davis at ann.davis@wsj.com2

URL for this article:
http://online.wsj.com/article/SB119543677899797558.html

State is planning for fuel shortage

An energy task force is set up to deal with any price spikes, supply problems or other emergencies.

By TUX TURKEL, Staff Writer
November 17, 2007

Record-high oil prices and a desire to be prepared for potential
fuel shortages this winter are prompting the state government
to develop an energy emergency management plan.

Gov. John Baldacci said Friday that he is setting up an energy
task force to help coordinate state resources. Fuel shortages or
price spikes during the heating season could lead Baldacci to
declare energy emergencies and take steps needed to protect
public welfare, such as opening shelters and monitoring price
gouging.

In summarizing his plan, Baldacci sought a balance between
promising action and recognizing state government's limited
ability to influence global markets. "While there are a number of
things we can do, we cannot solve our country's dependence on
foreign oil ourselves," he said.

A propane shortage last winter, caused largely by a railroad
strike in Canada, caught Maine off guard and forced dealers to
ration deliveries. That led Baldacci to ask members of his
administration, including John Kerry, the state's energy director,
to meet this summer with oil dealers, terminal operators and
other officials who could play key roles during a fuel emergency.
Kerry will lead the new task force.

The state is making other efforts to ease the burden of high fuel
prices this winter. Among them:

n The Public Utilities Commission is releasing an additional
$400,000 for weatherization and efficiency measures for low-
income homeowners.

n The Keep ME Warm program is providing kits that include
efficient light bulbs, weatherstripping and window insulation
through Community Action Programs.

n Every Friday for six weeks, starting with the Friday after
Thanksgiving, residents will be able to ride many local bus lines
for free. The goal is to encourage greater use of mass transit.

n An unspecified number of gas stations will begin selling fuel
blended with 10 percent ethanol. Ethanol is available in
Massachusetts and southern New Hampshire. State taxes aside,
the fuel's wholesale price is now 11 cents a gallon cheaper than
that of the winter gasoline sold in Maine, according to the Maine
Oil Dealers Association.

Baldacci also asked Maine's congressional delegation to keep
pushing for increased federal funding from the Low-Income
Home Energy Assistance Program.

In a related development, Sen. Olympia Snowe, R-Maine, said
Friday that she had asked the federal Office of Management and
Budget to immediately release $20 million that remains in
emergency funds.

Last year, the LIHEAP program gave more than 46,000
households an average benefit of $588. The need is greater
now, and legislative leaders said this week that it's likely the
state will have to supplement the federal money.

But state government can't do much to get at the core of the
energy crunch in Maine: high heating oil prices. The statewide
average price for heating oil hit $3.11 a gallon last week, 92
cents higher than at the same time last year. Kerosene rose to
$3.51.

Eight of every 10 Mainers heat their homes with oil or kerosene.
They consume roughly 427 million gallons a year, according to
the latest information compiled by the state energy office. By
comparison, propane, natural gas, wood and electricity each
accounted for less than 6 percent of the state's home heating
fuel in 2003, the most recent year for which data are available.

"Most of the problem with high prices is something we can't
adjust," said Jamie Py, executive director of the 250-member oil
dealers group.

Dealers are dreading a winter in which many customers will have
trouble paying their bills and filling their tanks, Py said. Dealers
already offer payment plans and expect to lose money in
hardship cases.

"But there's only so far they can go and stay in business," he
said.

State laws and rules give consumers and oil dealers specific
rights regarding delivery and prices.

In the face of a potential supply shortage, the governor can
declare an "abnormal market disruption." That makes price
gouging illegal. He also can act during a spike in prices.

Dealers also have protections. They can, under certain
circumstances, charge extra for unscheduled deliveries, as long
as they divulge the amount and the reason. They also can charge
a $5 penalty when an order doesn't fill at least 50 percent of the
tank or 100 gallons, whichever is less.

In preparing for an energy emergency, officials are trying to get
a better understanding of the state's petroleum supply chain and
to maintain communication with suppliers. Those contacts
proved critical last year, when officials realized that as much as
70 percent of Maine's propane supply came by rail from Canada.
Communication is especially important for keeping tabs on
heating oil delivery, which is vulnerable to weather and shipping
disruptions.

A major terminal operator who met with Kerry said his company
fills its oil tanks before winter and tops them off as demand
dictates.

Andy Lynch, a spokesman for Sprague Energy, said the
company's terminal in South Portland can hold 46 million
gallons of heating oil and kerosene, and 40,000 gallons of pure
biofuel, which is blended for bioheat.

A typical barge shipment of heating oil is between 4 million and
9 million gallons. For competitive reasons, Lynch declined to say
how many days' supply the terminal keeps in storage. He said
the facility is well-supplied.

"We are more than willing to work with the government in any
way," he said.

Kerry said such partnerships will be critical in an emergency, and
in helping the government anticipate possible problems. "We're
trying to do everything in our power to make sure no one goes
without heat," he said.

Staff Writer Tux Turkel can be contacted at 791-6462 or at:

tturkel@pressherald.com

Copyright © 2007 Blethen Maine Newspapers

Expo touts trash-turned-treasure

More than 60 vendors strut their products made of recyclables at ecomaine's Green Expo.

Portland Press Herald
By JOHN RICHARDSON Staff Writer
November 16, 2007

What do deck boards, kitchen countertops and fleece jackets have in common?

They all can be made from recycled trash, and all were on display Thursday as part of the Green Expo, organized by ecomaine, Greater Portland's waste handling and recycling agency.

"There are people who are afraid that things made out of recycled materials are inferior or dirty," said Shelley Dunn of ecomaine. "There's lots of misunderstanding."

The Green Expo filled the Sullivan Gymnasium at the University of Southern Maine with more than 60 vendors, many of whom have turned waste paper, plastic and other recyclables into new products. The idea, said Dunn, is to promote recycling by showing consumers what happens with the stuff that's diverted from the trash can.

While there is still resistance, demand for such products is clearly growing among consumers who want to help the planet when they spend their money, vendors said.

"There's more and more interest in green products," said Don Skeffington of Maine Green Building Supply in Portland. "It really is an exciting time."

Skeffington was busy showing flooring products and kitchen counter material such as Paper Rock, a countertop material that looks like a rich wood composite and is made out of recycled paper. "This is very popular," he said.

Nearby, Mike Descoteaux was showing Correct Deck, decking material made with recycled polypropylene, the kind of plastic that's in yogurt containers. Correct Building Products makes the decking in Biddeford.

Dunn, meanwhile, strolled around the exhibits wearing a gray fleece jacket made from old soda bottles.

Not all of the vendors were showing off recycled waste. While the Green Expo was organized to promote recycling, it became a larger event that promoted all kinds of earth-friendly products.

Christine Parker showed off Tree Free Greetings, a line of greeting cards made from sugar cane and kenaf, a fast-growing hibiscus that's grown in the southern United States. "It has been so well received," she said.

Vendors displayed solar panels, composting toilets and other products, and promoted composting, bicycling and mass transportation. The free event also featured a series of 45- minute workshops on a range of subjects, from renewable energy to green buildings.

A similar "Go Green Expo" was held on Saturday in the Mount Ararat High School gym in Topsham. Dunn said the organization plans to make the Portland expo an annual event.

Staff Writer John Richardson can be contacted at 791-6324 or at: jrichardson@pressherald.com

In Maine, 'a lot of fear out there' as heating oil prices keep rising

Families who don't qualify for assistance see a struggle ahead.

By JERRY HARKAVY The Associated Press
November 12, 2007

Nowhere in America, it seems, are people more apprehensive
about the prospect of a $3-a-gallon winter than in Maine.

Motorists nationwide may grumble about gasoline prices now
hovering around $3 for a gallon of regular, but home heating oil
that soared this month to $3.09 a gallon -- breaking the $3
barrier for the first time -- is the focus of concern in Maine.

The reasons for Maine's vulnerability are clear:

-- It tops the list of states most dependent on oil heat, with 80
percent of homes relying on No. 2 oil or kerosene.

-- It's one of the nation's coldest states, with the northern city
of Caribou often singled out by the National Weather Service as
having the lowest temperature among the Lower 48.

-- In terms of per capita income, Maine is generally ranked as
the poorest state in the Northeast.

-- And lots of older homes lack adequate insulation, making
them harder to heat.

So as heating oil prices hit record levels and the sound of oil
furnaces kicking in becomes more frequent, plenty of people are
worrying about whether they'll be able to scrape up enough
money to keep warm.

"It's not just low-income people who are fearful. It's the working
couple or families who are now going to have to choose between
heating, literally eating, and of course driving," said John Kerry,
director of the state Office of Energy Independence and Security.

For families struggling from paycheck to paycheck, the cost of
filling a 275-gallon tank can easily blow a hole in the budget.

In Bath, Stacy Crowell, a 29-year-old mother of two whose
husband works at Bath Iron Works, turns down the thermostat,
puts plastic sheeting on windows to keep out the cold and
compares prices at local oil dealers before filling the tank.

The family, which burns 800 to 1,000 gallons of fuel a year,
does not qualify for government assistance.

"Our incomes are just over the limit, so we can't get help for
anything. Every program we try for, we're just over it," she said.

With the recent spike in prices, Crowell is wondering how long
the family can afford to remain in the drafty old farmhouse that
they bought five years ago, when heating oil was much cheaper.

"We're thinking about selling in the spring because it takes so
much to heat this place," she said. "We can't afford it."

The state, meanwhile, is planning for a worst-case scenario.

Gov. John Baldacci is prepared to convene an emergency task
force in the event that fuel supplies are disrupted and shelters
are needed to accommodate those who have run out of fuel. In
the meantime, officials are pressing Congress for more money
for needy households and are looking to respond to any signs of
price-gouging.

"There's a lot of fear out there," said Judy Frost, who directs the
Low Income Home Energy Assistance Program for needy
residents in Franklin County. "Everyone's afraid to speculate
about what the prices will be in January and February, when the
really cold temperatures set in."

Although many recipients of federal LIHEAP money are elderly
and on fixed incomes, Frost and others who administer the
program are seeing an increasing number of applications from
the younger working poor who may not quality for benefits
under eligibility guidelines.

"We're finding more and more people applying who are over
income because they're so afraid that they're not going to be
able to make ends meet and pay for oil this winter," said Eleanor
West, LIHEAP director for Hancock and Washington counties.

The surge in prices has been dramatic.

The state energy office, which conducts a weekly price survey
during the heating season, said its latest average price of $3.09
was up 23 cents in just one week and was 89 cents a gallon
higher than a year ago. Nationally, the average price was $3.11,
according to the Energy Information Administration.

About 8.1 million of the nation's 107 million households use
heating oil, most of them in the Northeast. On average, Maine
homes burn roughly 850 gallons a year, a cost of more than
$2,600 at current prices.

The higher prices for kerosene, which averages $3.40 a gallon,
hit hardest at many of Maine's poorest households. People in
mobile homes, many in economically depressed rural areas, are
forced to burn kerosene because the less expensive No. 2 oil is
subject to gelling in outdoor tanks when the weather turns cold.

In recent years, many Mainers have insulated themselves against
price increases by either pre-buying their fuel supply before the
start of winter or signing up for a plan that sets a cap on the
per-gallon price.

Last season, however, prices fell as the winter wore on, leaving
those who opted for a price-protection plan paying more than
the cash price. Even though the plans have been a good bet in
most years, last season's experience prompted many customers
to forgo them this time when they might have been able to lock
in their costs at around $2.50.

"What we hear from dealers is that they're down 50 percent. Half
the people probably didn't participate compared to last year,"
said Jamie Py, president of the Maine Oil Dealers Association.

Which is the better deal remains to be seen, Py said. Although
prices are high now, they could drop if the winter is mild.

Despite the sharp rise in prices, Py is confident that everyone
will make it through the winter, even though the state's economy
is sure to take a hit as higher expenditures on heating fuel leave
consumers with less to spend on everything else.

"You have a whole network of social services, churches, state
entities that are out there to help folks get through," he said.
"Nobody's going cold. Everybody gets through the winter
somehow in Maine. It's always been that way."

The dealers association blames excessive speculation and
manipulation in the oil futures market for artificially inflating
prices, and Py suggests that prices could now be at their peak.
But like everyone else, he can't say for sure which direction
prices will move this winter and at what point the system might
crack.

"If we start seeing prices reaching $4 or $5 a gallon, which I
don't anticipate, that would require some sort of government
intervention to make sure that people don't go cold," he said.

Copyright © 2007 Blethen Maine Newspapers