United States District Court, D. Maine
ORDER AND JUDGMENT
A. WOODCOCK, JR. UNITED STATES DISTRICT JUDGE
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.
The Complaint, Motion to Dismiss, and Answer
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.
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).
Summary Judgment and Renewed Motions to Dismiss
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.
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).
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).
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.
The Bench 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).
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.).
FINDINGS OF FACT
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.
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.
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.
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
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.
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.
Geography and Zoning Districts
City enacted a zoning ordinance. City of South Portland Code
of Ordinances Ch. 27, available at
City also maintains a map of its different development
districts. Defs.' Ex. 143; Zoning Maps &
GIS, City of South Portland,
(Interactive City GIS Map).
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
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.
South Portland Code of Ordinances § 27-921.
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”).
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.
• 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
The 2008-2009 Oil Sands Proposed Project
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.
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.
Marketing the Proposed Reversal Project
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.
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.
Permitting and the Vapor Destruction Units
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
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.
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.
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.
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.
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.
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.
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.
The 2012-2013 Proposed Flow Reversal Project
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.
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.
Marketing the 2012-2013 Proposed Project
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
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.
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.
Permitting the 2012-2013 Proposed Project
27, 2011, the City approved PPLC's application to extend
its planning board approval from 2009 for an additional year.
Pls.' Ex. 90.
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.
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.”
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, WhiteHouse.gov, (Jan. 24, 2017),
ultimately ceased work on the 2012-2013 flow reversal project
The Crude by Rail Proposal
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.
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.
The Waterfront Protection Ordinance
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.
2013, PPLC sent an “Open Letter to the Residents of
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.
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
[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
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.
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
“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.
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).
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.
the WPO's drafters explained why the proponents chose to
focus on the act of loading, rather than an outright