Energy Costs in Maine and the War in Iran

In the month since the war in Iran began, it has become clear that it will have major economic impacts affecting Maine families and businesses. At the top of the list is instability in global oil and gas markets that have come with the closing of the Strait of Hormuz – a critical trade route for all products coming out of the Persian Gulf – and attacks on oil and gas infrastructure in the region.

The fundamental fact is that Maine is too dependent on imported energy. We don’t produce a drop of oil or gas, so every dollar we spend on fossil fuels goes straight to boost the profits of big, international oil and gas companies, instead of being invested in Maine communities. So, when global events like the invasion of Ukraine or the war in Iran affect global oil and gas markets, Mainers pay the price. 

Here’s how: 

1. Gasoline. The gas prices Mainers pay at the pump are directly tied to global oil prices. The Iran war has disrupted oil exports from the Persian Gulf, causing skyrocketing oil prices, which have caused gas prices to spike in Maine.

2. Diesel. Other fuels also spike when global oil prices go up. Higher diesel costs will increase transportation costs for goods on store shelves and squeeze Maine’ s farmers and fishing industry.
3. Heating fuel. Heating fuels like heating oil and propane have already risen due to the conflict. Maine is the most heating oil-dependent state in the country. Heating oil prices are linked to oil markets, and the Persian Gulf is a major producer of liquefied petroleum gas (LPG), which includes propane.
4. Electricity. Maine is part of the New England grid, which is heavily reliant on imported methane, also known as natural gas. In fact, Maine’s electricity supply costs are also directly linked to natural gas costs, and the large electric rate increases we have seen recently are largely due to volatile gas prices.

The good news is that we do not have to accept this as inevitable. Whether in transportation, heating, or electric power, Maine has already made progress in reducing our dependence on out-of-state fossil fuel corporations and global markets, and there’s much more we can do.

 

Transportation

Electric cars and trucks save drivers money on gas, have lower maintenance costs, and can be charged from Maine-based clean energy sources. There are now more than 22,000 Mainers who drive electric vehicles, up from 6,000 just four years ago in 2022.

Investing in non-driving alternatives like public transit and safe walking and biking paths also reduces fossil fuel dependence and lowers costs for Maine families.

Heating

Investing in energy efficiency, like better insulation, weatherization, and heat pumps lowers heating costs and puts money back in people’s pockets. Efficiency Maine offers rebates to homeowners and businesses to install these cost-saving measures. Maine is already a heat pump leader, but half of Maine’s homes still heat with oil.

Electricity

Maine is working steadily to diversify our energy mix. We are a regional leader in locally generated solar, wind, and hydroelectricity, and are home to New England’s largest battery storage installation. But more can be done, especially in developing the abundant wind resources in Aroostook County and offshore in the Gulf of Maine.

The war in Iran is just the latest example of the downsides that come with our dependence on fossil fuels for energy. Clean energy made in Maine can protect families and businesses from price spikes, protect our state from climate change, reduce health impacts from air pollution, and create jobs and opportunities for Maine’s economy. We can choose that path.

— Jack Shapiro, NRCM Climate & Clean Energy Director