Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Portland Pipe Line Corp. v. City of South Portland

United States District Court, D. Maine

August 24, 2018

CITY OF SOUTH PORTLAND, et al., Defendants.



         A pipeline operator challenges a local ordinance prohibiting loading crude oil onto tankers and the construction of new structures for that purpose on the grounds that it violates the dormant Commerce Clause and Foreign Commerce Clause of the United States Constitution. A state or local statute can violate the dormant Commerce Clause if it (1) has an impermissible extraterritorial reach, (2) discriminates against interstate or foreign commerce, (3) excessively burdens interstate or foreign commerce, or (4) interferes with the federal government's ability to speak with one voice when regulating commerce with foreign nations. After a four-day bench trial, the Court concludes that the local ordinance does not violate the dormant Commerce Clause or the Foreign Commerce Clause of the United States Constitution.


         A. The Complaint, Motion to Dismiss, and Answer

         On February 6, 2015, Portland Pipe Line Corporation (PPLC) and the American Waterways Operators (AWO) (collectively, Plaintiffs, PPLC) filed a complaint with this Court against the city of South Portland (South Portland or the City) and Patricia Doucette in her official capacity as the code enforcement officer of South Portland (collectively, Defendants, the City). Compl. for Declaratory and Injunctive Relief (ECF No. 1) (Compl.). The Complaint contains nine counts: (1) Supremacy Clause preemption of the Ordinance by the Pipeline Safety Act (PSA), 49 U.S.C §§ 60101 et seq.; (2) Supremacy Clause preemption of the Ordinance under the President's foreign affairs power; (3) Supremacy Clause preemption of the Ordinance by the Ports and Waterways Safety Act, 33 U.S.C. Ch. 25 and 46 U.S.C. Ch. 37; (4) preemption of the Ordinance under Article III, Section 2 of the United States Constitution and the Constitution's embedded principle of federal maritime governance; (5) violation of the Commerce Clause of the Constitution; (6) violation of the Due Process and Equal Protection Clauses; (7) deprivation of rights under the Civil Rights Act, 42 U.S.C. § 1983; (8) inconsistency of the Ordinance with South Portland's comprehensive plan under Maine law, 30-A M.R.S. § 4352; and (9) preemption of the Ordinance by Maine's Oil Discharge Prevention Law, 38 M.R.S. § 556. Id.

         On March 31, 2015, the Defendants filed a motion to dismiss the Complaint on justiciability grounds. Defs.' Mot. to Dismiss the Compl. Pursuant to Rule 12(b)(1) (ECF No. 16); Mem. of Law in Supp. of Defs.' Mot. to Dismiss Pursuant to Rule 12(b)(1) (ECF No. 17). The Court denied the motion to dismiss on February 11, 2016. Order on Defs.' Mot. to Dismiss (ECF No. 29). Accordingly, the Defendants filed an answer to the Complaint on February 29, 2016. Answer of Defs. City of South Portland and Patricia Doucette (ECF No. 30).

         B. Summary Judgment and Renewed Motions to Dismiss

         On November 17, 2016, PPLC filed a motion for summary judgment. Pls.' Mot. for Summ. J. (ECF No. 87). That same day, the Defendants filed a consolidated motion to dismiss pursuant to Rule 12(b)(1) and a cross-motion for summary judgment. Defs.' Consolidated Mot. to Dismiss Pursuant to Rule 12(b)(1) and Mot. for Summ J. (ECF No. 88).

         On May 11, 2017, the Court issued a second order on the justiciability issue, ordering an evidentiary hearing. Interim Order (ECF No. 156). On August 24, 2017, after a full day of testimony on August 9, 2017, the Court issued a third order on justiciability, denying the motion to dismiss. Min. Entry (ECF No. 179); Order on Defs.' Consolidated Mot. to Dismiss under Rule 12(b)(1) (ECF No. 185) (Justiciability Order). On October 20, 2017, the City filed another motion to dismiss after a public announcement about the cancellation of a different pipeline project. Defs.' Renewed Mot. to Dismiss Pursuant to Rule 12(b)(1) (ECF No. 194). After oral argument on November 21, 2017, on December 12, 2017, the Court issued its fourth ruling on the justiciability issue the City first raised on March 31, 2015. Order on Defs.' Renewed Mot. to Dismiss (ECF No. 199).

         Meanwhile, the Court received requests for leave to file amicus briefs on behalf of both the Plaintiffs and the Defendants. On January 9, 2017, the Court granted the motions of the amici curiae. Order on Mots. to File Briefs as Amici Curiae (ECF No. 135). Three briefs were filed on behalf of the Plaintiffs by the Chamber of Commerce of the United States, the American Fuel and Petrochemical Manufacturers, the American Petroleum Institute, the Association of Oil Pipe Lines, the International Liquid Terminals Association, Portland Pilots, Inc., the Maine Energy Marketers Association, and the Associated General Contractors of Maine. Brief of the Chamber of Commerce of the U.S.A. as Amicus Curiae in Supp. of Pls.' Mot. for Summ. J. (ECF No. 136); Amici Curiae Brief of the Am. Fuel & Petrochem. Mfrs., the Am. Petro. Inst., the Ass'n of Oil Pipe Lines, and the Int'l Liquid Terminals Ass'n in Supp. of Pls.' Mot. for Summ. J. (ECF No. 138); Brief of Amicus Curiae Portland Pilots, Inc., Maine Energy Mkt'rs Ass'n, and Associated Gen. Contractors of Me. in Supp. of Pls.' Mot. for Summ. J. (ECF No. 139). For the Defendants, the Conservation Law Foundation filed a brief on January 10, 2017. Brief Amicus Curiae of the Conserv. Law Found. (ECF No. 137). On January 23, 2017, PPLC and the City each filed a response to the amicus briefs. Pls.' Mem. of Law in Resp. to Amici Briefs (ECF No. 145); Defs.' Resp. to Briefs Amicus Curiae (ECF No. 146).

         On December 29, 2017, the Court issued an order on the cross-motions for summary judgment. Order on Mots. for Summ. J. (ECF No. 200) (Summ. J. Order). The Court granted summary judgment in favor of the City on Count I (Supremacy Clause-The Pipeline Safety Act), Count II (Supremacy Clause-Foreign Affairs), Count III (Supremacy Clause-The Port and Waterways Safety Act), Count IV (Maritime Preemption), Count VI (Due Process, Excessive Delegation, and Equal Protection), Count VIII (Inconsistency with the City's Comprehensive Plan), and Count IX (State Preemption). Id. at 228. The Court denied summary judgment to PPLC on all counts, and denied summary judgment to the City on Count V (Commerce Clause) because there were genuine disputes of material facts. Id. The Court preserved an ancillary issue by dismissing without prejudice on Count VII (Civil Rights Violation) to the extent it demanded attorney's fees and costs. Id.

         C. The Bench Trial

         Trial was scheduled for five days beginning on June 18, 2018. Notice of Bench Trial (ECF No. 204). The parties filed four pre-trial motions on April 25 and May 11, 2018, which the Court addressed on June 1, June 13, and June 14, 2018. Defs.' Mot. for View (ECF No. 206); Pls.' Mot. in Limine to Admit into Evidence Statements by City Officials and Members of the Public (ECF No. 208); Defs.' Mot. in Limine to Exclude Irrelevant and Inadmissible Statements (ECF No. 209); Defs.' Mot. in Limine to Exclude New Summary Tables Produced by Pls.' Without Underlying Data (ECF No. 210); Order Deferring Ruling on Defs.' Mot. for View (ECF No. 218); Order on Mots. in Limine Concerning Statements of City Officials and Members of the Public (ECF No. 230); Order on Mot. in Limine Concerning Summary Tables (ECF No. 232). The parties also stipulated to certain evidentiary matters, including admitting into evidence at trial virtually all of the testimony and exhibits admitted during the August 9, 2017 hearing on justiciability. Joint Stipulation Concerning Trial (ECF No. 239).

         The Court presided over a bench trial from June 18 to June 21, 2018. Min. Entry for Bench Trial (ECF Nos. 240, 242-44). On July 13, 2018, the parties submitted simultaneous post-trial briefs. Pls.' Post-Trial Br. (ECF No. 251) (Pls.' Br.); Defs.' Post-Trial Br. (ECF No. 252) (Defs.' Br.). The parties responded to each other's briefs on July 23, 2018. Pls.' Post-Trial Reply Br. (ECF No. 253) (Pls.' Resp.); Defs.' Post-Trial Reply Br. (ECF No. 254) (Defs.' Resp.).


         A. The Parties

         PPLC is pipeline company incorporated in Maine. Montreal Pipe Line Limited (MPLL) is PPLC's Canadian parent company. Three Canadian companies own MPLL: Shell Canada Limited, Suncor Energy Inc., and Imperial Oil Limited. Imperial is ExxonMobil's Canadian subsidiary. The American Waterways Operators (AWO) is a nationwide trade organization that advocates for the interests of United States tugboat, towboat, and barge owners and operators.

         The city of South Portland is a municipal corporation organized pursuant to the Constitution and general laws of the state of Maine. City of South Portland Charter, COCharter.pdf. The City is governed by a City Council of seven elected members serving staggered three year terms, one of whom is elected to serve as mayor for one year. Id. §§ 207, 211. The City Council appoints other officials like the City Manager. Id. § 227. Patricia Doucette was the City's Code Enforcement Director at the outset of this litigation.

         B. The Pipelines

         In 1941, PPLC and MPLL began constructing and operating a twelve-inch crude oil pipeline stretching from the harbor in South Portland, Maine (the Harbor), through New Hampshire and Vermont and into Quebec, Canada, terminating at oil refineries in Montreal East. Pls.' Ex. 164. PPLC added to its pipeline system in 1950 by constructing and operating an eighteen-inch pipeline. PPLC added to its pipeline system again in 1965 by constructing and operating a twenty-four-inch pipeline. PPLC decommissioned and ceased operating the original twelve-inch line in 1982. PPLC now uses the twelve-inch line as a sacrificial anode to protect its eighteen and twenty-four-inch lines from external corrosion. The nominal capacities of the remaining eighteen and twenty-four-inch lines are approximately 192, 000 barrels per day and 410, 000 barrels per day of crude oil, respectively. With a few exceptions of short distances, all three of PPLC's pipelines follow the same route, along the same rights of way, and pass largely underground between South Portland and the Montreal East oil refineries.

         Since 1941, PPLC has operated the portion of the pipeline within the United States, while MPLL has operated the portion within Canada. The only exception was a period from 1987 to 1999, when PPLC and MPLL cleared the eighteen-inch line and leased it to Granite State Gas Transmission, Inc., which operated the line for natural gas transmission. The companies refer to this combined pipeline system as the Portland-Montreal Pipe Line (PMPL).

         In South Portland, PPLC maintains “Pier 2, ” an oceanfront pier near Portland Breakwater Light on the Harbor where tanker vessels historically have docked to deliver crude oil. The crude oil is offloaded from marine tank vessels at Pier 2 and transported to storage tanks in the City; four storage tanks are on two parcels close to Pier 2 (the Waterfront Tanks) and nineteen are on Hill Street (the Main Tank Farm) approximately 2.7 miles inland from Pier 2. The oil travels from Pier 2 and the Waterfront Tanks through three lines running under Broadway and other streets and Mill Cove to the Maine Tank Farm. PPLC's eighteen-inch and twenty-four-inch pipelines move the crude oil northward from the Main Tank Farm to refineries in Montreal using six pumping stations across Maine, New Hampshire, and Vermont.

         Access to the Harbor has been integral to PPLC's success and longevity. The Harbor is able to accommodate ships with up to fifty-two feet of draft and up to 170, 000 deadweight tons of cargo. The Harbor has all-season ice-free conditions, which permits shipment of cargo in and out of the Harbor year round. As recently as 2010-the last year the eighteen-inch line was in active service-PPLC accepted 132 deliveries from tankers. That year, PPLC transported 27, 969, 719 barrels of crude oil northward to Montreal East through its eighteen-inch pipeline, an average of 76, 629 barrels per day, as well as 72, 231, 154 barrels of crude oil northward to Montreal East through its twenty-four-inch pipeline, an average of 197, 894 barrels per day. At the busiest times, the piers docked forty-one ships per month and the pipelines transported 550, 000 barrels per day. PPLC has been able to operate continuously since 1941 in part due to its ability to respond and adapt to changing market conditions.

         C. Geography and Zoning Districts

         The City enacted a zoning ordinance. City of South Portland Code of Ordinances Ch. 27, available at The City also maintains a map of its different development districts. Defs.' Ex. 143; Zoning Maps & GIS, City of South Portland, (Interactive City GIS Map).

         Pier 2 is located in a district of the City zoned Shipyard (“S”) and within the City's Shoreland Area Overlay District. The City established the Shipyard zoning district:

to promote the Shipyard area in South Portland as a robust waterfront center for office complexes, commercial uses, marine uses, and light industrial activities. The Shipyard District S seeks to maintain the conforming status of existing businesses, to prevent residential development and associated land use conflicts, and to minimize the impacts of development on adjacent zoning districts.

         City of South Portland Code of Ordinances § 27-921.

         The Waterfront Tanks are four above-ground floating roof oil storage tanks proximate to Pier 2 on two separate parcels in the Shipyard zoning district. Pier 2 abuts Bug Light Park, a public waterfront park on Casco Bay. Bug Light Park features a lighthouse on Casco Bay, parking facilities, and green space for dog walking, children's activities and general waterfront recreation. The Waterfront Tanks abut residential neighborhoods zoned for residential use and designated by the City's Zoning Ordinance Residential (“G”).

         The Main Tank Farm consists of nineteen above-ground floating roof oil storage tanks occupying a 102-acre parcel at 30 Hill Street. The Main Tank Farm parcel is zoned Commercial “C.” That commercially zoned area is composed of the Main Tank Farm parcel only, surrounded by residential neighborhoods, schools, day-care centers, athletic facilities, and churches zoned “Residential Districts A & G.” More specifically, the following are all adjacent to the Main Tank Farm:

• The Community Center, which includes a recreational center, after-school activities, and a summer camp with 500 children, is about 525 feet from the nearest tank. Defs.' Ex. 331; Interactive City GIS Map; Trial Tr. 567:12-25.
• The High School building is about 775 feet from the nearest tank. Defs.' Ex. 331; Interactive City GIS Map. The running track and football field are about 225 feet from the nearest tank. Defs.' Ex. 211, 213, 331; Interactive Zoning Map; Trial Tr. 569:1-570:5
• The South Portland Church of the Nazarene, which houses a preschool, is about 400 feet from the nearest tank. Defs.' Ex. 331; Interactive City GIS
• The Dyer Elementary School is about 1, 200 feet from the nearest tank. Defs.' Ex. 331; Interactive City GIS Map.
• The Kaler Elementary School, which includes an outdoor playground area, is about 275 feet from the nearest tank. Defs.' Ex. 204, 331; Interactive City GIS Map; Trial Tr. 570:20-571:11. The asphalt play area and basketball hoop are about 190 feet from the nearest tank. Defs.' Ex. 207; 331; Interactive City GIS Map; Trial Tr. 571:16-572:4

         D. The 2008-2009 Oil Sands Proposed Project

         In 2007-2008, PPLC determined that demand for transportation of crude oil from the Harbor to the Montreal East refineries was likely to decline because the boom in crude oil production in Alberta's “oil sands” fields meant that Montreal East refiners would need less foreign oil. Crude oil derived from “oil sands” is sometimes referred to as “tar sands” or “tar sands oil.” In 2007-2008, PPLC moved to reverse the flow of its eighteen-inch pipeline, but not its twenty-four-inch pipeline, to enable the company to transport crude oil from Montreal to the Harbor and to load crude oil onto tanker vessels for shipment to both United States and international destinations. Defs.' Ex. 64.

         PPLC invested substantial money and effort in advancing its flow reversal project, spending approximately $5 million on consultants to determine the necessary changes to its infrastructure, to model the economics, and to identify necessary permits. Modifications to PPLC's existing pipeline infrastructure would be needed to reverse the direction of the flow of its pipelines, including reversing and adding valves to accommodate southbound crude oil transportation, installing pumping facilities, and installing a vapor control system at the Harbor. PPLC later estimated the total cost of a reversal project to be on the order of $100 million. Defs.' Ex. 25 at 11.

         1. Marketing the Proposed Reversal Project

         In 2007-2008, PPLC began implementing its flow reversal project by marketing its ability to deliver oil from Canada to the South Portland Harbor. PPLC conducted a traditional “open season” process, whereby PPLC presented the details of its pipeline capacity to interested shippers-oil companies who wished to move their Canadian oil to the Harbor-to secure conditional offers for committed volumes of crude oil. During the open season process, PPLC asked shippers to sign nondisclosure agreements to protect the confidentiality of PPLC's plans, and many did. Numerous shippers expressed interest in PPLC's project during the open season process. PPLC intended to obtain contractual commitments from interested shippers to move specific volumes of oil. PPLC's intention, consistent with industry practice, was to use the contractual commitments to obtain financing to complete the infrastructure changes associated with reversing the flow.

         In late 2008, the financial crisis that caused the Great Recession crippled financial markets and caused worldwide economic activity to decline. PPLC halted work on the flow reversal project as a result of the financial downturn and a lack of contractual commitments from shippers.

         2. Permitting and the Vapor Destruction Units

         PPLC contacted the U.S. State Department concerning permits for the flow reversal project. The eighteen-inch line has operated under a permit since July 29, 1999, when the United States Department of State issued PPLC a permit “Authorizing Portland Pipe Line Corporation to Convert an Existing Pipeline Crossing the International Boundary Line Between the United States and Canada from Natural Gas Service to Crude Oil Service” (Presidential Permit). Compl. Attach 2 Permit at 1-6 (ECF No. 1). The twenty-four-inch pipeline was the subject of a prior Presidential Permit issued on January 13, 1965. Id. at 7-11. The President of the United States issued this Permit concerning the construction and operation of PPLC's twenty-four-inch pipeline under his authority to regulate cross-border segments of pipelines. The Presidential Permit for the eighteen-inch pipeline states:

Permittee shall comply with all applicable Federal and State laws and regulations regarding the construction, operation, and maintenance of the United States facilities and with all applicable industrial codes. The permittee shall obtain requisite permits from Canadian authorities, as well as the relevant state and local governmental entities and relevant federal agencies.

Id. at 3. The Presidential Permit focuses on the pipeline segment from “the vicinity of North Troy, Vermont, to the international boundary line between the United States and Canada . . .”, not the pipeline and its facilities south of the border crossing.

         On July 18, 2008, the State Department responded that PPLC's pipeline reversal plan did “not constitute a substantial change from the scope of the authorization” in the Presidential Permit previously issued to PPLC in 1999. Defs.' Ex. 5. As such, the State Department informed PPLC that it was “not required to seek a new or amended Presidential [P]ermit” in connection with the pipeline reversal project; however, the State Department reserved the right to rescind its decision if PPLC deviated significantly from the scope of its plan. Id.

         On June 19, 2009, PPLC applied to the City's Planning Board for Site Plan and Shoreland Area zoning approval for various work associated with the 2008-2009 Project. Defs.' Ex. 13. At the Main Tank Farm, PPLC sought to construct a new building to house a 2, 400 square-foot pump station, an outdoor electrical switchyard, and related infrastructure for use as a “ship loading system.” Id. at 2. At Pier 2, PPLC sought the City's approval to drive new pilings and make other modifications so that smaller barges and Handysize tank vessels could berth there, since Pier 2 was designed for larger Aframax and Suezmax vessels. Id. On the approach to Pier 2, PPLC sought to construct two Vapor Destruction Units (VDUs) to combust vapors displaced from the holds of the marine tank vessels by the loading of crude oil. Id. at 3.

         VDUs control air emissions. As part of the 2009 proposed pipeline reversal project, oil would be loaded onto a marine vessel, which causes air in the vessel's tanks to be displaced. Because the displaced air contains petroleum vapors, regulatory agencies require the removal of pollutants before the displaced air is released into the atmosphere. Some vessels have their own air emissions control equipment. The combustion stacks for the VDUs at Pier 2 were to be seventy feet tall and twelve feet in diameter. Id.

         PPLC received zoning approval from the City's Planning Board for the work at Pier 2 and the Main Tank Farm on August 25, 2009, but the City approval expired on August 25, 2012, after an extension in 2011. Defs.' Ex. 20. At no time during the City's 2009 processing of PPLC's application for site review approval did city of South Portland Planning and Development Director Charles Haeuser object to the VDUs that PPLC proposed. Trial Tr. 562:10-25; Pls.' Ex. 25 at 4. He suggested that the VDUs might be decoratively lit as an aesthetic attraction. Trial Tr. 284:3-16.

         The 2008-2009 Project required a New Source Review Air Emission License and an amendment to PPLC's existing Part 70 Air Emissions License from the Maine Department of Environmental Protection to permit the increase in emissions over previous operations. PPLC applied for the Licenses in February of 2009. Joint Ex. 43. On August 25, 2009, Maine DEP issued an Air Emissions License to PPLC permitting additional air emissions from the two VDUs (the “2009 Air License”). Defs.' Ex. 14. The 2009 Air License set emissions limitations and authorized PPLC to construct the VDUs based on emissions throughput capacities of the eighteen-inch pipeline of 180, 000 b/d of Syncrude (referred to as a light sweet crude because it is less viscous and has a lower sulfur content) or 140, 000 barrels per day of Cold Lake crude (referred to as a heavy sour crude because it is more viscous and has a higher sulfur content). Id. PPLC later voluntarily surrendered and voided the 2009 Air Emissions License without beginning construction. Defs.' Ex. 26.

         PPLC identified other environmental permits it would need from various Maine, Vermont, New Hampshire, Federal, and Canadian agencies. In 2009, without having obtained all of the necessary permits, PPLC suspended further permitting on the project. During the 2008-2009 process, no permitting authority denied PPLC any of the permits it sought. PPLC did not seek all the permits that would have been required, and did not receive approval for a pump station it proposed in Dunham, Quebec. Of the thirteen permits PPLC initially sought, relevant authorities granted ten and PPLC voluntarily ceased its pursuit of the other three.

         E. The 2012-2013 Proposed Flow Reversal Project

         When economic conditions improved in 2012 and 2013, as PPLC determined that its prior forecasts had proved accurate concerning the increase in Canadian oil production, PPLC once again considered reversing the flow of oil.

         1. Design Differences

         In 2011 and 2012, PPLC analyzed and considered several different design and engineering characteristics of a potential project to reverse the flow of either the eighteen-inch or the twenty-four-inch pipeline and to load crude oil onto marine tank vessels in the City's Harbor. PPLC considered modifying its earlier proposal to a single stream light line of crude oil, instead of a design capable of carrying both heavy and light crude oil. It considered ways to obviate the Dunham, Quebec pump station for which PPLC never obtained approval from Canadian regulatory authorities. PPLC considered using a vapor recovery unit (VRU) to capture hydrocarbon vapors during the loading process, which would use different technology and have less intrusive dimensions than the two 70-foot-tall John Zink VDUs proposed in 2009. PPLC also considered omitting the Pier 2 upgrades that would have accommodated smaller vessels such as barges.

         2. Marketing the 2012-2013 Proposed Project

         In 2011-2012, PPLC again began soliciting interest and held discussions with numerous potential crude oil shippers, including Irving, Valero, Shell, Keyera, Repsol, Suncor, Global, Imperial Oil, to attempt to obtain contractual volume commitments on a reversed eighteen-inch or twenty-four-inch pipeline. PPLC's marketing efforts came on the heels of a potential announcement by Enbridge to reverse its Line 9 to carry oil from west to east from Sarnia to Montreal. During this time, PPLC was under less pressure to reverse the flow of its pipeline system because it still was doing enough northbound business so that flow reversal had not become urgent.

         In 2013, PPLC again solicited interest from potential crude oil shippers for committed volumes of crude oil to be carried southward on the eighteen-inch or twenty-four-inch pipeline. In 2013, PPLC received positive indications of interest from potential shippers, many of whom signed non-disclosure agreements. In April of 2013, PPLC sought to secure shareholder endorsement for PPLC to seek expressions of interest from potential shippers concurrent with the TransCanada PipeLines Limited's Energy East Open Season then underway. PPLC's Board of Directors was not interested in pursuing a formal Open Season at that time.

         For a variety of reasons, including insufficient market interest, PPLC did not move forward with the reversal project. Sometime after April 2013 and before June 17, 2013, PPLC postponed seeking commercial support for any project to load crude oil in the City. It considered writing off part or all of the $6.5 million it had already spent planning and permitting the 2008 project. The only portion of PPLC's investment it decided to write off concerned approximately $150, 000 related to PPLC's work on the Dunham, Quebec pump station that did not result in approval. PPLC monitored the progress of the Enbridge Line 9 reversal project, which did not begin operating until December 2015.

         3. Permitting the 2012-2013 Proposed Project

         On July 27, 2011, the City approved PPLC's application to extend its planning board approval from 2009 for an additional year. Pls.' Ex. 90.

         Since the 2008-2009 project, the politics around a Presidential Permit for the U.S.-Canada border crossing had shifted. Between 2012 and 2014, twenty-one members of Congress, including U.S. Senator Susan Collins, U.S. Senator Angus King, U.S. Representative Chellie Pingree, then-U.S. Representative Michael Michaud, all representing Maine, as well as the entire Vermont Senate and House delegation and the entire New Hampshire Senate and House delegation, requested that the State Department require a new Presidential Permit and conduct an Environmental Impact Statement should PPLC seek to transport Canadian tar sands oil through the pipeline.

         On August 13, 2013, a representative of the United States Department of State sent a letter to counsel for PPLC backtracking on the 2008 letter which deemed flow reversal to be a non-substantial change for purposes of a Presidential Permit. Defs.' Ex. 23. The new letter explained that it was the State Department's “understanding that [PPLC] has no current plans to change the operation of either pipeline” and instructed PPLC “to provide information for the Department for its review and consideration in advance” before “execut[ing] any plans to change the operation of either pipeline.” Id.

         Other cross-border pipeline projects were also under review by the U.S. State Department. The Keystone XL Pipeline proposes to transport western Canadian crude oil from Hardisty, Alberta to Steele City, Nebraska. President Obama's State Department rejected the Keystone proposal in part because they determined it would negatively impact foreign policy and national security. Defs.' Ex. 131. President Trump later reversed that decision and directed the State Department to issue a presidential permit for the Keystone XL Pipeline. Presidential Mem. Re. Construction of the Keystone XL Pipeline,, (Jan. 24, 2017),

         PPLC ultimately ceased work on the 2012-2013 flow reversal project in 2013.

         F. The Crude by Rail Proposal

         In 2012, PPLC studied a potential project, proposed by Pan Am Railways, to transport “Bakken/other U.S. sourced crude” by rail into Rigby Yard in the City. Defs.' Ex. 25 at 6-10, 171. The rail proposal would have connected the Rigby Yard rail terminal with PPLC's Main Tank Farm on Hill Street by a short newly constructed pipeline on the Railroad's existing Right of Way, which is theoretically feasible from an engineering perspective. In 2013, PPLC was still contemplating the proposal to transport crude oil by rail to the Main Tank Farm and then loading crude oil onto marine tank vessels in the City. Defs.' Ex. 91, 93, 98, 102. By June 2015, PPLC informed its board of directors that “interest has diminished in developing new rail capabilities.” Defs.' Ex. 129 at 39.

         PPLC never proposed transporting oil from the Maine Tank Farm to Rigby Yard for transport out of South Portland via rail. While such a project would be technically possible, it would cost more to construct the interconnection, and it would be more expensive per barrel to transport oil from South Portland to most markets by rail than by tanker.

         G. The Waterfront Protection Ordinance

         In 2013, political opposition began to develop to the flow reversal project from environmental groups and the South Portland City Council. Advocates opposing the flow reversal project, led by a group called Protect South Portland (PSP), obtained sufficient signatures to place the “Waterfront Protection Ordinance” (WPO) on the November 2013 ballot in South Portland. Pls.' Ex. 8-9. The WPO proposed amending the City's zoning ordinance to (1) specify that petroleum facilities which are permitted within the Shipyard District were those “for the unloading of petroleum products from ships docking in South Portland . . . .” and (2) that “there shall be no enlargement or expansion of existing” petroleum facilities in the Shipyard or Commercial Districts, and (3) “no new or expanded facility shall be constructed on an existing pier. . . .” Pls.' Ex. 9 at 3.

         In 2013, PPLC sent an “Open Letter to the Residents of South Portland”:

Perhaps you signed a petition to get the WPO on the ballot, because you were told the WPO is designed to “stop tar sands” and “smokestacks”. These misleading references relate to a prior proposal which was never initiated or completed, and are designed to scare you into thinking that our company has an imminent project to bring tar sands to South Portland or smokestacks to Bug Light Park. Let us be clear - there is no such project proposed, pending or imminent. In fact, recently, as a good faith measure, we took the rare step of voluntarily surrendering our final permit relating to that prior proposal, as further reassurance to the community we care so deeply about that there is no tar sands project.

Defs.' Ex. 24.

         Many supporters of the WPO expressed concerns to City officials about heightened risk of spills of crude oil derived from tar sands, or more severe health and environmental impacts of those spills as compared to other types of crude oil. For example:

[K]eep[ ] us from becoming the next Kalamazoo, Michigan, or Mayflower, Arkansas, and I have a hard time pronouncing the unfortunate town in, in Quebec, but I - that needs to be brought up as well. Pls.' Ex. 102 at 1:25:31-1:26:17.
I really have no quarrel with the pipeline and respect their efforts to run a sound company. I just don't want that pipeline up the street carrying tar sands into our community to load ships besides Bug Light Park. . . . Recent events across North America have alerted me and many of my fellow citizens to the unacceptable risks involved in transporting tar sands, via pipeline, through our communities and our watersheds. Id. 1:39:30-1:41:12.
In 1997 [PMPL] dumped 2500 gallons of fuel of oil, that leaked, that spilled from their existing pipeline and at that point it was, what 45, 47 years old. We're talking about a 62-year-old pipeline now. And to use the analogy of a heart, were we to pump some sort of corrosive in to our blood, in to our veins and arteries, pump through our heart at a faster rate, I don't think we'd last very long or as long as we normally would were we not to do so. Pls.' Ex. 103 at 2:36:37-2:37:50.

         Many of the same supporters and others expressed concerns to City officials about other goals and fears, including air pollution, aesthetics, climate change, non-industrial redevelopment, and nuisances from pipeline operations:

“I face the Portland Pipe Line. I smell the fumes every single day, and I raise two kids there.” Pls.' Ex. 102 at 1:26:54-1:28:25.
“The extraction, transport and refinement of the oil that remains is extremely damaging to our environment both in terms of its toxicity and its contribution to global warming. Just as communities long ago had to adapt when whaling was replaced by fossil fuels, we as a culture must make this shift from fossil fuels to renewable energy. . . . Portland Pipe Line is trying to bully us in to allowing a very toxic substance to pollute and potentially contaminate South Portland.” Pls.' Ex. 103 at 2:18:50-2:20:45.
“They won't even reveal what's in that mix. Storing it in a tank farm where it will poison our school children and teachers and then sending it through our city in very old pipes that are unmapped, no one knows where those pipes run exactly, except the Pipeline of course, and hope the Coastguard. I know our Fire Chief doesn't have a map. They will send that stuff to the pier when they plan to burn off toxic vapors to pollute our air, it says dire implications for the land use and our waterfront. And how dare they suggest that sending a product to Bug Light Pier for export, the world's dirty oil parts, remember none of this stays in Maine, we're a shipping corridor, that when it spills it weathers quickly and it sinks in water to contaminate our special places and poison our Casco Bay fisheries.” Id. 3:37:50-3:39:04.
Those threats include fouling our drinking water supply, endangering our children and teachers adjacent to the Hill Street tank farm with fumes from up to 126 million gallons of tar sands oil, polluting our air by burning off toxic vapors on our waterfront and threatening Casco Bay and our special spaces along the bay with a possible tar sands oil spill. The Waterfront Protection Ordinance presents an opportunity for the citizens and taxpayers of our City to create a stronger and diverse economy, protect our investment in our schools, protect our property values, and finally, have a seat at the table of power. Remember, that if you do not have a seat at the table, you will be on the menu. Thank you. Pls.' Ex. 104 at 0:25:50-0:26:50.
My real estate expertise tells me that if you don't pass the [WPO], you will have unintended consequences which won't bode well for South Portland. The first consequence? Immediately diminished property values if the pipeline reversal scheme goes ahead and loading of tar sands oil starts at Bug Light Pier. I've discussed the issue with realtors, [inaudible] residential neighbors near the proposed smokestacks will take a significant, negative hit on their property values. The previously approved smokestacks? They're not small. 70 feet tall. That's equivalent to seven-story buildings. Those homes and condos closest would naturally be hit the hardest, but entire neighborhoods will be impacted. You also have a second unintended consequence of diminishing the appeal of South Portland to new buyers. Can you imagine the family of a child with asthma looking to relocate to South Portland and learning of these smokestacks and the tank farms? They're draw to your beautiful city quickly lessens. And remember, that's 10% of all children. With Maine having a higher burden of asthma than the rest of the nation, new smokestacks bring more air pollution closer to home. By bringing in tar sands oil to South Portland, you have other areas of town impacted as well. With tank farms abutting Kaler School and in the vicinity of Dyer, the High School, the Light House School, and the Community Center, those property values are affected as well. As word gets out about benzene and other gases leaking out of these tanks as children attend school right next to the facility 180 days of the year? After all, the company is seeking to renew their license to increase their emissions three-fold from 81.9 tons of VOCs to 220 per year. Again, what person would want to move to a town knowing that their child is becoming a statistic and an experiment in the new world of tar sands oil spillage? In your own Comprehensive Plan, it states South Portland's overall property value, which dropped over 10% from 2009 to 2010, I believe the construction of these smokestacks and filling in the Hill Street tank farm with tar sands oil will hinder that recovery from those depressed valuations, as well as further suppress the real estate market. . . . As a developer, I'm not going to buy a property in a neighborhood that has smokestacks in its viewshed or is downwind of it. Id. 0:27:50-0:30:31.
As a result of South Portland's unique connection and proximity to Canada, local businesses may have the opportunity to profit greatly from oil sands. The city may benefit from the tax income generated. A relatively small number of long-term jobs may be created, and the generous philanthropic activities of the petroleum industry may expand. These are some of the local potential benefits and, as was stated earlier, there are risks. Id. 1:09:30-1:10:54 (discussing risks from spills, environmental impact of tar sands extraction).

         As these examples indicate, a small number of those public comments preferred local businesses or expressed greater skepticism of the reversal project because the oil merely flowed through South Portland for export to other regions.

         One of the WPO's drafters explained why the proponents chose to focus on the act of loading, rather than an outright ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.