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Secondary wood manufacturing contributes 8,884 jobs and $1.8 billion to Maine's economy, about 20 percent of the forest products industry’s impact.

Michaud sends Obama Mainers’ views on forest products

PulpPaperObamaLetter 3-14-13WASHINGTON, DC – “The most pressing issue facing Maine’s paper industry is the subsidy package given in September 2012 by the province of Nova Scotia to the paper mill in Port Hawkesbury.” Rep. Mike Michaud told President Obama in a letter this week.

Following up on his tour of Maine’s pulp and paper sector earlier this year, Rep. Michaud sent a letter to President Obama on March 14, summarizing his finding and urging action on issues such as energy costs, transportation challenges and federal environmental regulations. He also sent 159 letters he received from Mainers on a range of issues facing the paper industry.

“I’m hopeful the president will do everything in his power to work with me, Congress and his administration on the critical issues our pulp and paper sector continues to face,” Michaud said in a press release.

In his letter to Obama, Michaud outlined the major concerns that were brought to his attention repeatedly on his tour and in the letters he received:

  • The subsidy package given in September 2012 by the province of Nova Scotia to the paper mill in Port Hawkesbury
  • Energy costs
  • Transportation challenges
  • Federal environmental regulations

“The Mainers that wrote to me clearly spoke from the heart about what this industry means to them and their communities,” Michaud said in a press release. “I came from a mill town and worked in a paper mill for nearly 30 years. I know exactly where they are coming from in these letters and have been pushing for action on many of the issues raised for years. I’m hopeful the president will do everything in his power to work with me, Congress and his administration on the critical issues our pulp and paper sector continues to face.”

A sample of comments Michaud received from Mainers can be found below:

“Business in the woods hasn’t changed much over the years in some ways. Contracts are still made with a handshake. However, the ability to make a profit is slipping away more every day. Not many years ago, fuel was 89 cents/gallon and therefore related products like tires and many parts were similarly low,” wrote Susan D’Alessandro of Millinocket.

“Whenever I have brought friends from ‘away’ home to Rumford, I get a kick out of the way they crinkle their noses at the strong smell of sulfur. For those of us who grew up there, we joke that it ‘smells like money’—but now I worry that is no longer true,” wrote Mollie Kaubrys of Rumford.

“I have been at Madison Paper for 10 years now and have realized this is the career that has given me the success and opportunities I was looking for. We are looking for fair trade and nothing more,” wrote Michael Croteau of Anson.

“We are losing our young people every year as they move out of state to find good paying jobs. The paper industry provides some of the best paying jobs in the state,” wrote Archie Miller of Readfield.

“The workers who depend on the mills extend far beyond the millworkers. The ripple effect is tremendous. Unfair trade is killing the wood industry,” wrote Thomas Targett of Portland.

The full text of the letter Michaud sent today can be found below:

March 14, 2013

President Barack Obama

The White House

Washington, D.C. 20500

Dear President Obama:

I recently spent a week touring paper mills throughout my district to hear firsthand about the challenges they face and to learn how the federal government can support an industry that collectively remains one of the largest employers in the state of Maine. Individuals at the mills described a spectrum of issues they struggle with, including illegal Canadian subsidies, energy costs, transportation costs, and environmental regulations. I have summarized my findings from my tour in this letter, and I have also enclosed comments I received directly from Mainers about the paper industry. I ask you to work with me to mitigate these challenges, promote this important sector, and protect the 7,300 jobs it supports in my state.

The most pressing issue facing Maine’s paper industry is the subsidy package given in September 2012 by the province of Nova Scotia to the paper mill in Port Hawkesbury. These subsidies appear to be in violation of Canada’s World Trade Organization commitments, and they directly disadvantage Maine’s mills, particularly those that make supercalendared and groundwood coated paper. Those mills made clear that this subsidy package will put them out of business in the very near future if no action is taken to reverse them. I made USTR aware of this, and I am appreciative of their willingness to work with my office to find a way to reverse these noncompliant subsidies. I ask that the White House also weigh in with Canada and apply additional pressure on Ottawa to comply with their trade commitments. We need to use all resources at our disposal to ensure that the Port Hawkesbury deal does not force mills in Maine to lay off their workers and close their doors.

In addition to competitors’ trade practices, energy costs greatly determine a mill’s viability. Because oil is so expensive, the vast majority of paper mills have switched, often at great cost, to an alternative source of fuel. Natural gas is one of the least expensive options, but, until a gas pipeline is built, it remains unavailable to most of northern Maine.  Efforts to extend the gas pipeline farther north are underway, but these plans are still in the very early stages and do not include the most northern parts of the state. I have discussed the importance of building a natural gas pipeline with the Economic Development Administration and the U.S. Department of Agriculture. I have asked both agencies to assist with potential funding opportunities for this project, and I am hopeful the White House will contribute to these efforts. Making natural gas available to all of Maine’s mills will dramatically reduce their energy costs and make them more competitive.

Transportation challenges also affect our mills’ cost-effectiveness.  Trucking paper products is very expensive, especially with increasing oil costs. Maine’s 20-year pilot program for increased truck weights makes it more cost-effective to use trucks, but that is not a comprehensive solution. Reliable freight rail is vital to Maine’s mills. Unfortunately, short line rail in the state is inadequate. Lines fall into disrepair and are not fixed by their owners. Some of the smaller mills have difficulties obtaining cars in a timely fashion, and, even when they are available, products are not always delivered by the promised time. I have engaged the Surface Transportation Board to determine what role the federal government can play in improving freight rail in northern Maine. As a complement to these conversations, I ask the White House to work with my office to identify federal policies that can improve the dependability of short line railroads.

The mills also expressed concerns about increasingly strict environmental regulations that have very high compliance costs. The Boiler MACT regulations, despite the recent revisions, will still require millions of dollars for compliance costs for some of Maine’s mills. In addition, some of the rule’s key provisions have yet to be finalized. How operating parameter limits are determined, whether based on a 30-day averaging period or a one-time test, could significantly alter the impact of the regulation. Moreover, the Non-Hazardous Secondary Materials regulations, while improved from previous versions, still have yet to address the forest products industry’s concerns about the inclusion of railroad ties as non-waste fuels. The mills in Maine that burn railroad ties in their boilers need quick resolution to this outstanding issue, and I urge the White House to work with the Environmental Protection Agency to reach final decisions on these matters as quickly as possible. I also encourage the White House to reach out to representatives of the paper industry and explore with the industry and EPA ways to mitigate the costs of implementing the Boiler MACT regulations. Mainers are committed to protecting the environment, but the state cannot afford to have environmental rules put our mills out of business.

Mainers are acutely aware of the difficulties facing the paper industry.  I am enclosing constituent letters I received so you can read firsthand from Mainers’ how important the paper industry is to the state and how critical federal policies are to its future.  These letters echo the comments I heard directly from Mainers on my tour. I ask you to work with me to address the challenges detailed in this letter and to promote Maine’s paper sector and the 7,300 jobs it supports.

Thank you for your consideration of this request.  I look forward to working with you to promote and advance Maine’s paper industry.

Sincerely,

Mike Michaud

Member of Congress

 

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