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Maine Town Fights Plan to Use Pipeline to Export Oil Sands Crude

South Portland, Maine — Tom Blake, like thousands of his neighbors in this coastal town, is used to living alongside the oil industry. Tank farms cluster in neighborhoods, by the park where families watch the movie Frozen on a summer night, next to schools and senior citizens apartment buildings. As a child, Blake, the town’s former mayor, used to jump into high snow drifts from the massive oil tank next door.

Now, after decades as a New England hub for importing crude oil and distributing fuel, South Portland is enmeshed in a dispute with the oil industry that echoes far beyond southern Maine.

Tonight, the South Portland City Council, including Blake, is expected to pass an ordinance that would prevent the export of crude oil from the waterfront. The product of a relentless 18-month campaign by residents and Maine environmental groups, the measure is a response to plans by Portland-Montreal Pipe Line, or PMPL, to reverse the flow of its import pipeline in order to export oil sands crude from Canada, the same petroleum that would run through the controversial Keystone XL pipeline in the Great Plains.

“This isn’t an anti-Portland pipeline company measure,” Blake said. “It’s anti-dirty oil.”

The fight over granting Keystone XL a federal permit and the questions it raised about the oil’s environmental impact has fed the opposition here. But South Portland itself is now the latest front in the battle over developing Alberta’s vast oil sands deposits. The Canadian government is pushing to build multiple export routes. Towns and environmentalists along the proposed routes want to seal them off.

The South Portland ordinance, if passed, would be “very significant” to efforts to thwart oil sands crude exports, said Danielle Droitsch, Canada Project director for the Natural Resources Defense Council.

That has not been lost on the oil sector, from the regional players in South Portland to the American Petroleum Institute, the industry’s top lobby, which sent a letter to town officials saying the law “would face strong legal challenges.” No company in South Portland currently exports crude oil, but some say the ordinance signals a willingness to restrict all businesses unfairly.

“A very vocal minority initiated a groundswell of concern in the community, and the City Council adopted this ordinance without addressing, through independent study, the issues that were initially brought up about public health and safety,” said Taylor Hudson, head of investor relations for Sprague Energy, a New England energy wholesaler. “There was such a rush to judgment without input from state, federal or local regulators. We see it as a very dangerous precedent for any business that wants to innovate.”

PMPL got local and state permits with little notice five years ago to make infrastructure changes to reverse the flow. But local residents honed in on the proposed change in late 2012 as oil sands crude became a bigger issue with Keystone XL. Communities along the pipeline route, from Vermont to Maine, also grew alarmed by spills of oil sands crude into Michigan’s Kalamazoo River in 2010 and then in a subdivision in Mayflower, Ark., in 2013.

“All of those things — Keystone, Kalamazoo — people woke up to them,” said Mary-Jane Ferrier, 82, a spokeswoman for Protect South Portland, the citizens group championing the ordinance.

The Portland-Montreal pipeline six times crosses the watershed for a major tributary into Sebago Lake, the drinking water source for the greater Portland area.

“That’s tap water,” Bob Foster said one recent morning.

He and his wife, Judy, both in their 60s, back the ordinance. They live in a trim, white clapboard house with a picket fence and flagpole out front, across the road from two huge sage-green tanks owned by PMPL. “All you need is one break, not even a huge break, and hundreds of thousands of people are going to be drinking and bathing in bottled water.”

PMPL did not answer multiple emails and phone calls seeking comment about the export ordinance. In remarks to the Vermont Legislature last year reported by Vermont Public Radio, then-Chief Executive Larry Wilson said: “It’s a heavier oil, potentially, if we had this project. And we’ve pumped heavy oil, and we’re capable of pumping it very safely.”

Built in 1941 to speed crude oil to Montreal refineries to support Canada’s war effort, the Portland line consists of two pipelines that can move 600,000 barrels a day. But over the last three decades, its business has dropped from serving about one tanker a day to about one a week, locals say.

Reversing the line to tap Alberta’s oil sands boom would also reverse the company’s flagging fortunes, Wilson said in Vermont. PMPL, the umbrella for Portland Pipe Line Corp. and Montreal Pipe Line Ltd., is owned by a Canadian subsidiary of Exxon Mobil Corp. and Suncor Energy Inc., both heavily involved in extracting petroleum from oil sands.

Canadian officials have repeatedly voiced their concern to South Portland over the ordinance.

“As an oil-producing jurisdiction, Alberta is following the situation,” said Jeannie Smith, spokeswoman for the government there. “Just last week, our Alberta representative in Washington, David Manning, was in South Portland to provide information to local officials and stakeholders.”

Amid this fight, PMPL let its permits lapse, but locals remain wary because the company could get new permits. In Canada, Enbridge Inc., the biggest shipper of oil sands petroleum to the U.S., got permission to reverse a pipeline to transport oil sands crude that would tie into the Portland-Montreal system.

“If they’re not planning a reversal, why is industry fighting the ordinance so hard?” Blake asked. “I’m convinced if we let our guard down, industry will slip through the back door in a minute.”