Maine pipeline co drops lawsuit over city law that blocked oil export

A pipe place. REUTERS / Jennifer Gauthier

• Summary
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• Associated documents

• The decision to withdraw the appeal follows the Biden administration letter in support of the city

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(Reuters) – A pipeline operator has dismissed a long-standing lawsuit aimed at ending a law in South Portland prohibiting the loading of crude oil in tankers along its waterfront to minimize pollution and effectively prevent the company from with plans to reverse the river, continue its operation to bring crude oil from Canada to the coastal city of Maine.

Portland Pipe Line Corporation (PPLC) and the tug industry group American Waterways Operators volunteered their 1st letter in support of South Portland on Thursday.

Local law effectively prevented the operator, a subsidiary of Suncor Energy Inc, from reversing the flow of its 236-mile route from Maine to Quebec for sea export from South Portland in southern Maine. The line is currently transporting oil from the city’s unloading facility to the Suncor refinery in Montreal.

Chris Gillies, managing director of PPLC, told Reuters that the South Portland-based company has dismissed its appeal because it “currently has no plans to reverse the flow of crude oil in the Portland-Montreal pipeline system.”

Previous owners “had thought about reversing the flow of crude oil on the” line, he said.

The company is represented by attorneys at Pierce Atwood.

South Portland Mayor Misha Pride said in a statement, “I applaud the Portland Pipe Line’s decision to enable them and our community to move forward.” One of the city’s attorneys is Jonathan Ettinger of Foley Hoag.

The July 2014 ordinance of the city of 25,000 people, known for its quaint lighthouses and breathtaking views, sparked a showdown with the oil industry calling the process illegal.

City lawmakers said the Clear Skies ordinance would protect its waterfront and prevent air pollution associated with large-scale storage of crude oil.

In 2015, PPLC and American Waterways Operators embarked on a lawsuit over a complaint alleging South Portland of violating what is known as the Dormant Trade Clause of the U.S. Constitution, which generally prevents states from regulating interstate trade.

The complaint argued that the regulation violated the clause because it “controls behavior beyond South Portland’s borders”.

Portland Federal District Court Judge John Woodcock disagreed in a 2018 ruling, stating that “the fatal flaw in PPLC’s discriminatory argument is that if there are no such competitors, interstate and foreign competitors cannot be charged differently gives”.

Kristen van de Biezenbos, assistant professor of energy law at the University of Calgary, said the case shows the ability of cities to issue statutes and ordinances that effectively challenge energy infrastructure projects when there are no conflicting state or federal laws.

James Coleman, professor of energy law at Southern Methodist University’s Dedman School of Law, said the case was “another example of the variety of legal tools that can be used to halt new linear infrastructure projects like pipelines.”

The case is Portland Pipe Line Corp., et al. City of So. Portland et al., U.S. First Appeals Court, No. 18-2118.

For Portland Pipe Line Corp., et al .: John Aromando of Pierce Atwood.

For the city of So. Portland et al .: Jonathan Ettinger of Foley Hoag.

For those interested in the USA: Lewis Yelin from the US Department of Justice.

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Sebastian Bad

Sebastien Malo reporter on environmental, climate and energy disputes. Reach him at sebastien.malo@thomsonreuters.com