Yves here. The article below illustrates how local communities are throwing spanners in the works of various North American energy plays. For instance, New York State’s highest court (confusingly called the Court of Appeals) ruled that towns have the authority to ban fracking via local ordinance, a decision that sent shivers down the spine of natural gas developers.
Another development that is causing some consternation to energy industry incumbents is an ordinance passed by the city council of South Portland, Maine, which put in place new zoning rules that would prohibit the export of Canadian tar sands through the port. Key sections of the Portland Press Herald account:
The City Council gave final approval Monday night to controversial zoning changes that are expected to block the potential export of Canadian tar sands oil from the city’s waterfront…
The Planning Board voted 6-1 last week to recommend the zoning proposal, which aims to prevent the bulk loading of crude oil, including tar sands, onto marine tank vessels and block construction or expansion of terminals and other facilities for that purpose…
The ordinance changes approved Monday were developed by the Draft Ordinance Committee after city voters rejected a much broader Waterfront Protection Ordinance by a 200-vote margin in November.
In developing its follow-up proposal, the ordinance committee found that loading crude oil onto a ship could increase air pollution, and that the vapor combustion facilities needed to mitigate the problem would have a negative visual impact on the waterfront.
Environmentalists want to block the export of Canada’s tar sands oil because of its potential to contribute to global climate change. They also argue it is difficult to clean if spilled and that export operations would add air pollution to the local environment.
Maine is also a hotbed of other efforts to assert more local authority over commerce, such as the food sovereignity movement, which exempts local growers who sell directly to in-area customers from certain state and national food regulations.
Like the New York State fracking ruling, this dispute has the potential to set new standards. From OilPrice:
Many residents of South Portland, Maine, were ecstatic over a recent decision by the city council to forbid the use of the city’s facilities to export Canadian oil sands.
The council voted 6-1 on July 21 against allowing the use of the 236-mile Portland-Montreal Pipe Line to ship the Canadian oil to South Portland for export. The line is now used to move imported Portland-Montreal Pipe Line in the opposite direction, to Canada.
“This is so exciting,” Mary Jane Ferrier, a spokeswoman for the group Protect South Portland, told the Portland Press Herald. “This is a big thing with impact far beyond our city.”
Opponents were disappointed, though they said the vote didn’t come as a surprise. One, Tom Hardison, vice president of the Portland Pipe Line Corp., issued a statement saying the vote was “predetermined” and “a rush to judgment,” and that the council was “slanted against [the pipeline] and the entire working waterfront since day one.”
Another industry group, the Working Waterfront Coalition, said it would “evaluate all political and legal means available to us to overturn this ordinance. The fight is not over.”
The Canadian oil is a heavy crude mixed with sand that’s found in great quantities in the western Canadian province of Alberta. Oil companies and governments are working on ways to put this oil on the world market, such as the Keystone XL Pipeline, which would move the crude from Canada through the United States to ports on the Gulf of Mexico.
There are no plans now to use the Portland-Montreal line for this, but supporters of the South Portland ban say they fear its flow of oil may one day be reversed and send sand-laden oil to Maine for shipment overseas.
South Portland, with a population of just 25,000, is a scenic port that also serves as the second-largest oil port on the U.S. Atlantic coast, where it offloads crude from tankers and ships it to Canada through the Portland-Montreal Pipe Line.
Although South Portland is no stranger to handling oil, many residents are strongly opposed to the presence of Alberta crude. They argue that oil sands spills, if they occur, would be much more difficult to clean up, that exporting more oil would contribute further to climate change and that loading the crude onto tankers would create unwanted local air pollution.
Len Langer, a lawyer who specializes in maritime issues, told Reuters that the ban could set a nationwide precedent if industry challenges fail.
“The real question here is, can a municipality regulate interstate and foreign commerce?” Langer said. “If the answer is yes, … we’ll see a lot more municipalities more aggressively regulating commerce within their borders.”