Environment or Economy: A Story of Opportunity Cost

Environment or Economy: A Story of Opportunity Cost

The Maine State Legislature recently proposed a bill regarding fossil fuels and environmental policy. The bill would prohibit gas companies from charging consumers in order to finance expansion of gas service mains and gas service lines, effectively serving as a ban on natural gas expansion. The bill would not affect existing service lines.

Yankee Gas, Wilton Gas Expansion Project
Yankee Gas, Wilton Gas Expansion Project” by yankeegasmedia is licensed under CC BY-ND 2.0.

Proponents of this legislation, led by William Harwood, cite a 2019 law requiring the state to reduce greenhouse gas emissions by 45% from 1990 levels by 2030, and 80% by 2050. This will be impossible, they argue, if natural gas continues to expand its presence in the state. Harwood further argues that electric heat pump usage will increase, reducing dependence on natural gas and limiting the damage that would come from halting its expansion.

On the other side are natural gas companies such as Summit Utilities who argue that Maine does not have the tools necessary to replace natural gas and that any move to preemptively do so comes at a cost to consumers. There have also been arguments presented about how the language of the legislation could inhibit energy innovation. Jenni Tilton-Flood, who is working with Summit Utilities to yield renewable energy from manure emissions, stated that “Projects like these can’t happen” if the legislation is enacted because prices will not be able to increase to finance such innovative projects. 

These arguments are not mutually exclusive. Two things can be true at once: halting fossil fuel expansion is likely necessary to hit environmental targets but this will come at an economic cost for ratepayers (at least in the short term) at a time when utility rates are on the rise in Maine. There is a clear opportunity cost present in this choice. The choice comes down to value priorities and differing interpretations on the level of economic harm stemming from the proposed legislation. 

However, these choices and considerations were delayed for a year, and the Maine State Legislature is now considering legislation that would fund a series of studies aiming to identify the role of fossil fuels in the state’s energy future. Proponents of both this proposal and the initial legislation aim to highlight the fact that expanding fossil fuels is incompatible with Maine’s stated energy goals. Ultimately, this decision to delay consideration of legislation halting fossil fuel expansion shows the controversy and strong disagreements stemming from differing value priorities and opportunity costs present with action and inaction. 

If you are interested in this topic, please see the references below for more information.

Works Cited

Singer, S. (2024, January 23). Bill to scale back natural gas in Maine draws strong opposition at public hearing. Press Herald. https://www.pressherald.com/2024/01/23/bill-to-scale-back-natural-gas-in-maine-draws-strong-opposition-at-public-hearing/ 

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