November 08, 2024
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Drought threatens economy Summer growth at risk, expert says

PORTLAND – A state economy expert, who usually has his head in the numbers, now has his eyes on the skies.

Charles Colgan, a public policy professor at the University of Southern Maine, said Friday that Maine’s prolonged drought, which has held on since early last summer, could stunt an economic growth cycle he forecast would start when summer arrives.

“I’m worried about that,” said Colgan, after delivering his annual economic forecast at a USM-sponsored business breakfast. “That’s a looming problem. We need a significant snowpack. We’ve got to get a ton of snow in here to make it through the summer.”

Maine, like the rest of the nation, is in a recession. But because the state’s economy is not so heavily reliant on technology sectors, it is positioned to get out of it faster than other areas of the country, Colgan said.

“Things are getting worse but getting worse more slowly, which is a necessary precursor for things to get better,” he said.

The above-average temperatures, however, coupled with below-normal snowfall totals, are making it difficult for Colgan to stay confident in his assessment that good times are not that far away.

During his presentation, Colgan vocalized what most in the audience already were thinking – another terrorist attack is likely and the economic fallout from it will not be pretty.

“I do believe there will be additional terrorist attacks in the U.S.,” Colgan said. “If they come at the wrong time, they will seriously affect our ability to recover.”

After the presentation, though, Colgan said the drought is more of an immediate threat to Maine’s economy than a potential terrorist attack or the national recession.

“[The drought] may have more of an effect on some areas of the state,” he said.

Sectors that could be financially affected by an even longer drought include manufacturing, agriculture and tourism. A lack of water, whether in wells, reservoirs or rivers, could mean lower inventories and higher prices for products and electricity.

“He’s right. It’s a concern,” said Anthony Buxton, an attorney who represents the Industrial Energy Consumers Group.

More than 600 of the 2,000 megawatts of electricity generated in Maine at any given moment come from hydroelectric power, he said. Many of the paper mills in the state use the electricity produced from the water held in reservoirs on the Androscoggin, Kennebec and Penobscot rivers, he said.

If the drought continues, some of the state’s biggest companies may have to switch to burning oil or buying electricity on the open market.

Although the drought is a concern, the state’s major industries aren’t worried just yet, Buxton said.

“We were here last winter,” he recalled, noting that significant amounts of snow did start falling in mid-January. “It’s not impossible that we could get a lot of snow.”

At the Maine Public Utilities Commission, spokesman Phil Lindley said that if there is any worry among the state’s businesses about whether they’ll have enough power, they should be looking into securing long-term, lower-priced electricity contracts with suppliers now because prices are low at the moment. During the summer, any power shortages similar to what New England has experienced in the last couple years could send electricity prices up on the spot market.

A long-term evaluation of how a drought might affect fruit and vegetable harvests began last summer, said Robert Spear, commissioner of the state Department of Agriculture, and it continues today.

“We are concerned about it,” he said.

Wild blueberry plants produce fruit every other year and this year’s berries started growing last year, Spear said. Farmers are noticing that the stalks are smaller and not as plentiful. If the drought continues, the size of the berries may be smaller, too, he said.

“We can’t change the weather,” Spear said. “In the springtime, there likely will be some runoff of water. If we could harness that and put it in some reservoirs, that would be wonderful.”

For the tourist industry, it’s too early to tell what kind of impact, if any, a continued drought will have on recreational activities such as fishing, white-water rafting and boating, said Nat Bowditch, assistant director of the state Office of Tourism.

“It’s hard to say,” Bowditch said. “The feeling is that it’s not bad at this stage of the game.”

But Bowditch said he and others in the tourism industry, whether they are businesses that cater to winter or summer visitors, want it to snow, and soon.

“As far as this year is concerned, definitely, we could use some snow,” he said.


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