Judge Sides with Big Oil in Maine Pipeline Case

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In a case that has national ramifications, a federal judge has ruled against the city of South Portland, Maine, in its latest effortย to stop the coastal townย from becoming a destination for Canadian tar sands oil.ย  The case centers around an existing pipeline owned by oil companies ExxonMobil, Shell, andย Suncor.

The Portland Montreal Pipeline currently moves refined oil from South Portland to Montreal, Canada. However, since Canada is awash in oil and currently exports over three million barrels a day to the U.S., there is very little demand there for U.S. oil.ย As a result, the pipeline is not operating close to fullย capacity.

The oil companies that own the Portland Pipe Line Corporation (PPLC) now want to reverse the pipeline’s direction toย bring Canadianย tar sands oilย to South Portland, where it would beย exported.

In 2014, the city of South Portland passed the Clear Skies Ordinance, banning the export of crude oil from the city. This ordinance was designed to protectย local air quality because the plans to bring tar sands oil to South Portland require building two smokestacksย on the waterfront,ย  located adjacent to residential areas. These pollution control towers wouldย burn off the toxic volatile components of the tar sands oilย mixture.


Proposed location of pollution control towers with the city of Portland inย the background. Credit: Thomasย Mikulka

In 2013, prior to theย city passing the Clear Skies Ordinance, residents of South Portland gathered the 4,000 signatures required to placeย a measure on the ballot, which would allowย voters to decide whether or not they wanted to allow tar sands oil in their community. That’s when the oil industry started paying attention. The American Petroleum Institute ended up spending over $750,000 to help defeat theย ballot measure, which lost by fewer than 200ย votes.

Why would oil companies and their lobbyists spend so much money on a small pipeline project that may never be economically viable? The reason has little to do with this particular project and everything to do with setting a precedent for preventingย local communities from taking actions to protect their air quality or local environment when those issues come into conflict with oil and gasย interests.

โ€œThis has always been seen by the companies as a beachhead,โ€ Sean Mahoney of the Conservation Law Foundation told Inside Climate News. โ€œThey canโ€™t allow communities to pass this kind of ordinance because it could be a model for communitiesย everywhere.โ€

Sure enough, after the city council overwhelmingly passed the Clear Skies Ordinance in 2014, the Portland Pipe Line Corporation sued the city to overturn the crude oil exportย ban.


Bug Light Park isย adjacent to the proposed location of the pollution control towers necessary for exporting Canadian tar sands oil from South Portland. Credit: Thomasย Mikulka

Is This Tar Sands Pipeline Economicallyย Viable?

In theย latest round of this legal battle, the city of South Portland asked Judge John Woodcock Jr.ย to throw out the case because the pipeline in question isnโ€™t economically viable and PPLC has no plans โ€” or financing โ€”ย  in place to proceed with the project. The city’s lawyers pointed outย that reversing the pipeline to bring tar sands oil from Canada to South Portland requires oil for the pipeline, yet it currently has no way to get that oil. Even the judge made this point in the recent decision, saying, โ€œfor PPLC to pump oil from Montreal to South Portland, there must be oil toย pump.โ€

And right now there isnโ€™t. The pipeline company originallyย argued that it would source oil from TransCanadaโ€™s proposed Energy East pipeline, but that project has now been cancelled. Enbridge Line 9, itsย other pipeline option, is currently at full capacity and an unlikely source of oil to ship to South Portland. In a recent presentation Enbridge saidย โ€œits system is expected to be at or near capacity throughย 2021.โ€

At the moment, there is no way to supply the South Portland pipeline with oil to transport from Canada to Maine. On this basis, the cityโ€™s lawyers argued the pipeline company shouldnโ€™t be allowed to continue with its lawsuit because even if it won, the pipeline wouldย not be economically viable. No one will finance an oil pipeline that has no access to oil, theyย say.

When Energy East was still a possibility, it was a big part of PPLCโ€™s argument about why the company needed to reverse the pipeline in the first place. Judge Woodcockโ€™s recent decision notes this: โ€œDuring the August 9, 2017 evidentiary hearing, PPLC relied heavily on the prospect of the construction of this new pipeline to alleviate the lack of volume currently available through Enbridge Line 9, most of which appears to be underย contract.โ€

But with Energy East now out of the question, PPLC claims this is a goodย thing.

The judgeโ€™s decisionย notes that PPLC asserted thatย the Energy East pipeline’s cancellationย was not only not important because of the โ€œโ€˜dynamic, extremely complex [nature of the oil] market, that is affected by a myriad of influences,โ€ but was in fact a positive developmentย because it would mean that the Portland Montreal Pipeline โ€œwill continue to be the sole operator of a crude oil pipeline running to the Atlanticย coast.โ€

This complete reversal on the role of the Energy East pipelineย didnโ€™t seem to bother Judge Woodcock. And heย has embraced the PPLCโ€™s โ€œextremely complex nature of the oil marketโ€ argument as justification for allowing the lawsuit to continue, because, basically, no one can predict the future ofย oilย markets:

โ€œโ€ฆ the Court does not need to resolve the complicated question of whether the City is correct [aboutย little to no oil being available for the pipeline] โ€ฆ this is because whatever the state of the oil market today, it can be said with some confidence that it will not be the same four or so years fromย today.โ€

Except when it comes to Energy East and Enbridge Line 9, things are likely to be the same as they are today. Energy East wonโ€™t exist in four years and Enbridge Line 9 has said that its system will be at capacity until at leastย 2021.

But essentially the judge is saying that just because the pipeline is notย economically viable today doesn’t meanย it couldn’t be viable at some point in the unknowableย future.ย 

However, at the same time the judge said you canโ€™t predict the future or try to resolve โ€œcomplicatedโ€ economic questions, he took the liberty of doing just that when he wrote, โ€œIn the range of oil company projects, PPLCโ€™s reversal of an existing pipeline seems a surer bet than many other proposals.โ€ Seems like a bold conclusion from someone who has repeatedly said the future and oil markets are far too complex toย predict.

Still, the judge did emphasize the one thing he was certainย about.

โ€œThe one constant factor I know is they have a pipeline in the ground,โ€ Judge Woodcockย said at the November 21ย hearing. And that seemed to be enough for him to let the caseย continue.

In the Ground and Under theย Water

The fight in the courts may beย about an air quality ordinance and the rights of a community to control projects with potential health impacts in that area, but the pipeline reversalย project poses another threat to the people of South Portland and the greater Portland metroย area.

The current pipeline passes under a section of Sebago Lake, which is the source of drinking water for Portland as well as 15 percent of Maine. If the pipeline leaked, the potential economic and health impact ofย polluting Sebago would beย immense.


Existing pipeline passing below Sebago Lake in Maine.ย Credit: Thomasย Mikulka

The Keystone pipeline’s recent oil leakย occurred in an agricultural field in South Dakota and did not immediately contaminate any water sources.ย However, the 2010 leak of the Enbridge Line 6 pipeline resulted in tar sands oil going directly into Michigan’s Kalamazoo River. That spill took five years and more than a billion dollars to cleanย up.

While the judge is correct that โ€œthey have a pipeline in the ground,โ€ it is clear that โ€œtheyโ€ โ€” the Portland Pipe Line Corporation โ€”ย are not the only ones assumingย the risk in this situation. The air quality of South Portland and the drinking water for the greater Portland metro area are at risk. This lawsuit will determine if the residents of South Portland are allowed a say over those risks or if the oil industryย willย overruleย residents.

Main image:ย Marsh adjacent to Sebago Lake. Credit: Thomasย Mikulka

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Justin Mikulka is a research fellow at New Consensus. Prior to joining New Consensus in October 2021, Justin reported for DeSmog, where he began in 2014. Justin has a degree in Civil and Environmental Engineering from Cornell University.

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