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This is Governor John Baldacci.

As you know, Maine’s economy is in transition. Undeniably, change brings a level of uncertainty, even pain.

The paper industry is the backbone of Maine’s forest economy. Pulp and paper constitutes 22 percent of Maine’s total manufacturing jobs, and provides the highest wages in Maine’s manufacturing sector. In many rural areas of the state paper mills are the primary source of employment and the ripple impact can be felt through credit unions and hardware stores, restaurants and hotels throughout the regions in which they are located.

Since my first day in office, my Administration has been fighting to not only keep our mills up and running, but make them competitive, stocked with raw materials critical for Maine’s future. I have been personally involved in efforts to keep open the mills open in Millinocket, East Millinocket, Lincoln, Old Town and Jay. And I remain committed to ensuring their viability because there is viability. Maine is the second leading producer in the country for paper products.

But just this week, we received two serious blows – one is about 150 workers in Jay, Maine and more than 200 mill workers in Millinocket were told that their jobs were in jeopardy, their futures and those of their families uncertain.

My Administration continues to work with local, union, industry and federal officials to keep Maine’s mills operating and keep our highly skilled workforce employed.

In the case of the Wausau Paper-Otis Mill facility in Jay, the company intends to permanently shut down one of their two machines.

In Millinocket, the Katahdin Paper Co. mill is expected to shut down on September 2.

In both circumstances, the rising cost of energy is a major factor in the proposed shut downs.

I have the best, most experienced people in the Administration working to help the impacted workers and communities, and to pursue options which may keep these valuable jobs.

The Katahdin mill has been working to replace its oil-powered energy system with a biomass system that will greatly reduce operating costs and eliminate the use of oil. Work continues to ensure that the mill shut down is only a short-term measure that will enable long-term solutions to be put in place so that the hard-working, skilled people can go back to work as soon as possible.

We have been working to maintain our abundant natural resources, and we know we have the best workers in the nation – if not the world – right here in Maine.

Maintaining what we have doesn’t mean the status quo, but finding better ways to operate. There’s no denying that if we don’t change the way we do business, we’ll be left behind in this global economy.

It’s clear that moving to a more stable, clean, renewable, home-grown energy source is a critical key to Maine’s economic future. We have seen oil prices place significant burdens on families and businesses in Millinocket and Jay and across the state, and that’s why my Administration is aggressively tackling these underlying energy issues.

To maintain Maine’s leadership in forest products my Administration is aggressively pursuing forest certification as a way to brand Maine’s high quality and sustainable forest products. So consumers and the companies who serve them are increasingly demanding those products, Maine will be a leader in that area.

Maine State Government has been doing its part in encouraging more certification. We are buying more certified paper and wood to increase awareness of, and expand demand for, certified products.

We have also been transforming our forest products industry by emphasizing secondary processing of construction materials. We do not want to only produce the raw materials, we want to add value to those materials and create new innovative products. Through advanced technology and workforce development, Maine is promoting and building these new products.

Wood composites offer an example of the new technologies that are helping to transform Maine’s forest products industry. The Advanced Engineered Wood Composite Center at the University of Maine is a world leader in the development of advanced wood composite materials. Uses include the marine pilings, boat hulls, concrete forms, beams for bridges, and even shelters for our troops in the Middle East.

Maine is also taking the lead in defining appropriate uses for wood in the renewable energy picture. My Wood-to-Energy Task Force is soon going to report back with recommendations on how Maine can harness wood in new ways that are much more affordable than using oil and are environmentally-friendly.

Finally, Maine has partnered with New Brunswick and Nova Scotia in a major study on the regional forest products industry. Recommendations from PricewaterhouseCoopers are due by the end of the year that will detail three areas of investment that will achieve the greatest value and keep the industry prosperous.

Maine’s forestry roots are deep, remain valuable to our economy. Building on these natural strengths and enhancing our competitive assets will offer a truly sustainable prosperity into the future of the 21st century and make that Maine’s century.

Thank you and have a great day.

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