Bangor OKs switch to natural gas for BIA

BANGOR – After spending months exploring alternatives to costly heating oil, city councilors Monday night voted 4-2 to heat several large structures at the city’s airport with natural gas.

Bangor International Airport has been one of the city’s two largest consumers of heating oil. The other is Bangor High School.

The decision to find an alternative heating fuel for BIA’s terminals and large hangars stems from a citywide energy audit performed by consultants from Westbrook-based Honeywell Building Solutions.

Though Honeywell recommended converting to wood heat, city councilors chose a different tack.

Projections and number crunching over the last several months indicated that the city would save more money in the long run if it converted four large buildings at Bangor International Airport from No. 2 heating oil to wood chips. But a former mayor who’s been in the forest management business for decades warned that the supply outlook for wood is questionable.

Meanwhile, the supply outlook for natural gas appears to be more stable. Bangor Gas is gearing up to provide gas to the Sheraton Four Points hotel at BIA, so the needed infrastructure is virtually there.

In a background memo for councilors, City Manager Edward Barrett laid out the pros and cons of heating with wood chips versus natural gas.

If the city’s assumptions about cost and availability prove correct, Bangor would save in the short run by converting to natural gas. In the case of gas, the payback period is projected to be shorter, at one to two years compared to six to seven years for wood.

The short-term savings from converting to gas also are expected to be greater, at $3.3 million over 10 years compared to $1.6 million for wood chips, Barrett said.

But after initial capital investments are paid off, the savings from wood would be considerably higher. A 20-year projection suggests the city would save $17.7 million by switching to wood heat compared to $5.9 million for natural gas.

Though Barrett noted that the decision was the council’s to make, he noted that consultation among several city administrators and former Council Chairman John Cashwell, president of Seven Islands Land Co., suggest that demand for wood is increasing.

While more wood is growing than is being harvested within 50 miles of Bangor, not all of the wood is available to the market, Cashwell told city officials when they sought his input in recent months.

Barrett said that Cashwell said there are a number of competitors for the supply, including pulp mills, biomass plants and pellet plants.

He said Cashwell was aware of a number of Maine mills that now are importing wood chips from areas well outside a 50-mile radius and are paying as much as $20 a ton for delivery. That pushes the cost per ton from the $55 a ton estimate city officials earlier were using to $80 a ton.

Aside from cost, some Bangor officials also have expressed concerns about air emissions from a wood-fired boiler.

The city, however, does have an out should natural gas not prove the most cost effective option. The city’s minimum commitment to Bangor Gas is three years. After that, the city can do what it pleases.

In another airport related matter, councilors also voted to extend the city’s contract with Exxon Mobil Corp., BIA’s supplier since 1976. The point of the extension is to give the city time to explore its options with regard to fuel services.

Exxon Mobil notified city leaders that it did not plan to renew its contract for fuel handling and storage at the airport, claiming a change in state tax law that redefined how Maine taxes corporate revenue had resulted in a disproportionately high tax rate that essentially would make its service to BIA unprofitable.

Its main distributor, Western Petroleum Co., based in Eden Prairie, Minn., has told city officials it wants the business.