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It’s clean, the supply is both stable and close to home and, at the moment, it’s running at about half the cost of No. 2 heating oil.
Give up?
It’s natural gas, and it’s being sought after with increasing fervor in the Greater Bangor market.
Bangor Gas, the only natural gas provider in Eastern Maine, has signed up as many new customers in the last month (more than 100) as it did all of last year, general manager Jerry Livengood said this week.
“Truthfully, we’re about 70 years behind the curve,” he said, referring to the natural gas boom seen in other parts of the country in the 1930s and 1940s. “One of the biggest reasons it hasn’t taken off, at least residentially, is lack of awareness.”
Natural gas is responsible for heating more than half of all homes in the United States, but in Maine that number is only about 5 percent, and most of those homes are in southern Maine.
As oil prices continue to creep into the absurd territory, consumers are looking for any reprieve, and natural gas is one of a handful of energy sources that is emerging as a cost-effective alternative.
Mark Blaine, who lives with his wife and infant son in Brewer, had a natural gas service line installed at his home just this week.
“With the price of oil, it was a pretty easy decision,” said Blaine, who burned 600 gallons of oil to heat his 1,200-square-foot home on Washington Street last season. “Of course, there’s always the possibility that the cost of [natural] gas will go up like everything else, but I can save money right now.”
Bangor Gas sales manager Jon Kunz said his product has always been attractive to commercial customers, but more and more residents are making inquiries.
“My phone’s ringing off the hook right now,” Kunz said, adding that the surge has happened without any real marketing efforts.
But there is at least one drawback to this seemingly perfect alternative to oil: Not everyone has access. At least not yet.
Bangor Gas has pipelines only in Bangor, Brewer, Orono, Old Town and Veazie, and even those are limited largely to main corridors. Many side streets, where the bulk of residences are located, do not have access.
Livengood, however, said his company’s owner, Energy West of Great Falls, Mont., is committed to promoting growth, particularly residential growth, so the Bangor Gas network could be primed for a breakout.
Carol MacLennan with the Maine Public Utilities Commission said the natural gas industry in eastern and northern Maine has and will always be dictated by demand.
“All of the state’s distribution companies are reporting an increased interest this year,” she said. “And it has everything to do with the price comparison between oil and gas, which has created a larger gap than we’ve seen.”
History, cost comparison
While the rest of the country has been using natural gas as a heating source for decades, the utility is still an infant in Eastern Maine.
Prior to 1998, when the Maritimes & Northeast Pipeline was constructed to bring gas through Bangor from the Sable Island gas fields off Nova Scotia, no infrastructure existed.
Bangor Gas didn’t go online until 2000 and for many years attracted mostly commercial customers, such as the Verso Paper Mill in Bucksport, which relies heavily on natural gas.
Jim Dearman of Orono and his wife, former state senator Mary Cathcart, were the first residential customers of Bangor Gas in December 2000, but they were an exception rather than a rule.
“We have since moved from that house, but we loved it. It definitely saved us money,” Dearman said this week. “In fact, we just learned there is a [natural gas] pipeline accessible to our current home, so we’re looking into it again.”
Until recently, consumers haven’t felt the need to switch from oil to gas because the price differential was minimal, according to MacLennan.
That isn’t the case today.
Comparing the costs of gas and oil is a little like apples and oranges because the two fuel sources are measured on different scales, natural gas in therms and oil in gallons.
But consider that one therm of natural gas produces 100,000 British thermal units (BTUs) and one gallon of oil equals about 138,000 BTUs. Then consider that natural gas averages about $1.77 per therm, according to Livengood, and oil is averaging about $4.45 per gallon in the Greater Bangor area, according to the Maine Oil Dealers Association. Even without a calculator, the savings are evident.
Before homeowners rush to make the switch to natural gas, there is an added upfront cost to convert most home heating systems from oil to gas.
Bangor Gas will install a service line at no charge but does not cover the cost of converting from oil to natural gas. Depending on the boiler, that conversion can cost $1,200 and up for parts and labor.
Blaine, who works for Bangor-based XL Mechanical & Energy Management Services Inc., which installs and maintains furnaces, air conditioners and refrigeration systems, spent about $700 for the parts but said he can do the installation himself.
“It’s still a good chunk of change up front and even more for someone who can’t do the work,” he said. “I’m sure a lot of people don’t have that kind of money sitting around.”
But Blaine said his investment would be paid off in less than a year if prices stay the same. For him, it’s worth it.
Other benefits, future
Independent of costs, Livengood said natural gas has other benefits compared to oil, chiefly that it burns much more efficiently and much cleaner because it doesn’t produce soot. Gas boilers also require less maintenance.
MacLennan agreed with those assessments.
Livengood also said supply is much less volatile than oil. That doesn’t mean increased demand won’t drive the price up, but it’s easier to control, he said.
Natural gas supply seems to be increasing as well to meet the new demand. Earlier this month, Maritimes and Northeast Pipeline LLC announced plans to expand its natural gas pipeline system to transport new natural gas supplies to markets in Atlantic Canada and the northeastern United States.
“Suppliers are working hard to keep pace with increased demand, which should help keep the prices a little less volatile,” MacLennan said.
Kunz, the Bangor Gas sales manager, said he’s had a difficult time keeping up with the rush of new customers.
“It’s a good problem to have,” he said.
Any recent growth is limited to homes that already are on Bangor Gas’ existing pipeline network. The company has the capacity to expand its main pipelines, but that likely will happen only if it is economically viable, according to MacLennan. In other words, one resident on a side street who wants natural gas may not carry the same clout as a group of 10 or 20.
History has shown that it’s not always easy to run new pipelines in Maine. The state’s rocky geography is often prohibitive and it can be expensive. But if demand is there, Livengood said Bangor Gas would attempt to meet it.
Dearman, who lives in Orono, said he was happy to learn a Bangor Gas pipeline runs adjacent to his home, but he has friends and neighbors who don’t have that luxury.
“They’ve [Bangor Gas] got to expand their lines, but they also need more crew and workers to meet that demand,” he said.
It’s also possible that another natural gas company will set up shop in the area to compete with Bangor Gas, although that hasn’t happened yet.
As far as McLennan is concerned, the benefits of natural gas outweigh any negatives, but she conceded that the energy industry is hard to predict.
“I think Maine consumers are looking for any alternatives that can save them money, and right now, it’s natural gas,” she said.
erussell@bangordailynews.net
664-0524
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