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Industry Vows to Fight U.S. City's Ban on Canadian Oil Sands

By: Oilprice.com
Posted: 7/24/2014 8:13:00 AM
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By Andy Tully for Oilprice.com

Many residents of South Portland, Maine, were ecstatic over a recent decision by the city council to forbid the use of the city’s facilities to export Canadian oil sands.

The council voted 6-1 on July 21 against allowing the use of the 236-mile Portland-Montreal Pipe Line to ship the Canadian oil to South Portland for export. The line is now used to move imported Portland-Montreal Pipe Line in the opposite direction, to Canada.

“This is so exciting,” Mary Jane Ferrier, a spokeswoman for the group Protect South Portland, told the Portland Press Herald. “This is a big thing with impact far beyond our city.”

Opponents were disappointed, though they said the vote didn’t come as a surprise. One, Tom Hardison, vice president of the Portland Pipe Line Corp., issued a statement saying the vote was “predetermined” and “a rush to judgment,” and that the council was “slanted against [the pipeline] and the entire working waterfront since day one.”

Another industry group, the Working Waterfront Coalition, said it would “evaluate all political and legal means available to us to overturn this ordinance. The fight is not over.”

The Canadian oil is a heavy crude mixed with sand that’s found in great quantities in the western Canadian province of Alberta. Oil companies and governments are working on ways to put this oil on the world market, such as the Keystone XL Pipeline, which would move the crude from Canada through the United States to ports on the Gulf of Mexico.

There are no plans now to use the Portland-Montreal line for this, but supporters of the South Portland ban say they fear its flow of oil may one day be reversed and send sand-laden oil to Maine for shipment overseas.

South Portland, with a population of just 25,000, is a scenic port that also serves as the second-largest oil port on the U.S. Atlantic coast, where it offloads crude from tankers and ships it to Canada through the Portland-Montreal Pipe Line.

Although South Portland is no stranger to handling oil, many residents are strongly opposed to the presence of Alberta crude. They argue that oil sands spills, if they occur, would be much more difficult to clean up, that exporting more oil would contribute further to climate change and that loading the crude onto tankers would create unwanted local air pollution.

Len Langer, a lawyer who specializes in maritime issues, told Reuters that the ban could set a nationwide precedent if industry challenges fail.

“The real question here is, can a municipality regulate interstate and foreign commerce?” Langer said. “If the answer is yes, ... we'll see a lot more municipalities more aggressively regulating commerce within their borders.”

This article was originally published on Oilprice.com.