Pipeline Loses Challenge to City Oil Ordinance

PORTLAND, Maine (CN) - A federal judge upheld a Maine city’s ban on the bulk loading of crude oil onto tankers in its harbor Friday, derailing a pipeline operator's plan to reverse the flow of oil along its conduit.

U.S. District Court Judge John Woodcock declared South Portland’s "clear skies" ordinance constitutional after a four-day bench trial. It's the latest blow to Portland Pipe Line Corp. – a Canadian-owned subsidiary of Shell Canada, Suncor Energy and Imperial Oil – in its three-year battle with the city.

Woodcock had largely dismissed the pipeline operator's complaint in December, leaving only the question of whether the ordinance violates the Dormant Commerce and Foreign Commerce clauses of the U.S. Constitution.

In a 92-page ruling, the judge disagreed with Portland Pipe Line’s claim that the ordinance regulates commerce beyond the boundaries of the City.

"For purposes of this prong of the dormant Commerce Clause, the court sees little difference between the ordinance and other zoning prohibitions," Woodcock wrote.

The pipeline operator also failed to show that the ordinance specifically discriminates against the company and Canadian commerce. The court found that evidence supported the City Council's arguments that only concerns over the local impacts of crude oil loading fueled the creation of the ordinance.

The city adopted the ordinance in 2014 as a reaction to Portland Pipe Line's plan to reverse the flow of a 236-mile pipeline between South Portland and Montreal.

“Faced with the prospect of hundreds of thousands of barrels of crude oil being loaded onto marine tank vessels in the city and threatening the health of the residents and preventing redevelopment of the waterfront, the City Council prohibited this new activity,” Mayor Linda Cohen said in response to the ruling. “We are pleased that the court upheld the ordinance.”

Judge Woodcock agreed with the city that the ordinance "creates ample and weighty local benefits." Local residents, he wrote, "had sincere concerns" regarding air quality, water quality, aesthetic and noise impacts, and decreased redevelopment opportunities because of the heavy industrial activity.

However, he cautioned against supporters viewing the decision as a rebuke to Portland Pipe Line and its business.

"Whether the enactment of a local law that effectively puts a lawful local business out of business is good public policy falls within the aegis of the duly-elected representatives of the citizenry of South Portland," the judge wrote. "The court concludes only that the ordinance survives the legal challenges the business has mustered."

Portland Pipe Line’s lead attorney, John Aromando of Pierce Atwood, did not immediately respond Monday to a request for comment and a question about whether the company plans to appeal.

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