Local regulation of fossil fuel pipelines (or small town that might) – Energy and natural resources

United States: Local regulation of fossil fuel pipelines (or the small town that might)

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With all the attention focused on the Keystone Pipeline and disputes over local fracking regulations, it’s easy to forget the small town of South Portland, Maine (population 26,000), which just won in the first circuit in a challenge to its regulation of an international pipeline that starts from Montreal and ends at South Portland Harbor. (Full disclosure: I represented the city in this matter.)


When Portland Pipeline Corporation (“PPLC”) (of which the parent company at the time was owned by ExxonMobil, Shell and Suncor) sought to change the permitted use of the pipeline and transport crude oil to southern Canada for loading on ships at the terminus in southern Maine (as opposed to its historic use of transporting crude from ships to northern Canada), the city passed its “Clear Skies Ordinance,” banning the bulk loading of crude onto ships. ships. Of course, the owner of the pipeline sued to overturn the order, claiming a host of theories.


The court of first instance gave a summary judgment that the ordinance was not pre-empted by the Pipeline Safety Act, the Rivers and Ports Act of 1899, or the United States-Canada Transit Pipeline Agreement, did not violate equal protection or due process clauses of the Constitution, and did not violate State law. (See our previous article on this.) He then ruled after a week-long trial that the ordinance violated neither foreign affairs nor the trade clauses of the Constitution. Although PPLC appealed to the First Circuit, after the United States filed an amicus brief supporting the city’s position (and after a brief trip to the Maine Supreme Court on a question of law of the State), PPLC dismissed this appeal, leaving judgment in place. As a result, the city ordinance is in effect and the pipeline cannot be used to load crude oil (from the tar sands formation in western Canada or the Bakken formation in the United States) on ships in South Portland harbor.

Given the development of oil sands crude oil formation in Alberta, there is currently little demand for imported oil into Canada, so the future of the pipeline is uncertain. What is clear is the long-standing power of city council to protect the health and well-being of residents. So add this to the growing list of decisions allowing local regulation of fossil fuel installations.

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