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PORTLAND, Maine — A federal judge has dismissed nearly all the claims that a company has filed against South Portland over an oil pipeline but the biggest one remains: whether a city ordinance blocking the project is unconstitutional.

At the heart of the lawsuit is the question of local control and what — if anything — a community can do to block an unwanted energy project.

Portland Pipe Line Corp. sued the small coastal city of South Portland in 2015 over a pipeline that would send tar sands oil through the city — opening a path for Canada’s crude to reach the East Coast for export.

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The company, as well as powerful allies such as the American Petroleum Institute, argued that a local ordinance prohibiting the export of heavy crude from South Portland’s harbor is unconstitutional because only Congress, not cities and towns, can regulate interstate commerce.

The outcome could influence similar lawsuits elsewhere.

“It’s a great decision,” said Sean Mahoney of the Conservation Law Foundation, who has advised the city. “They won on 8 out of 9 counts. But they’ve got a big kahuna count left.”

The judge still must decide whether the South Portland ordinance violates the federal commerce clause — an authority granted by the Constitution — which allows Congress to regulate interstate commerce. The company argues that local authorities do not have that power. The issue will likely be decided at trial later this year.

Portland Pipe Line Corp. has been developing plans to reverse the flow direction of its Portland-Montreal Pipeline for nearly a decade. The pipeline currently brings conventional oil from South Portland to Montreal, but since production of tar sands oil in Canada ramped up, the need for oil to be sent from Maine to Quebec has all but disappeared, along with PPLC’s business model.

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Since learning of the company’s plans in 2013, a local grass-roots effort led by the group Protect South Portland has fought the reversal, arguing it would increase air pollution because it would require construction of a pair of 70-foot smokestacks to burn off volatile organic compounds before the oil is loaded into tankers.

After a ballot initiative to block the project failed — a measure that API and oil companies spent hundreds of thousands of dollars to defeat —the South Portland City Council passed the Clear Skies Ordinance in 2014, targeting air pollution concerns.

The lawsuit swiftly followed. As of August 2017, the city had spent $1.1 million to defend the ordinance, a significant portion of South Portland’s total operating budget of $32.6 million.

Following earlier court rulings against the city, the Dec. 29 decision came as a surprise to supporters of the ordinance. The federal judge dismissed claims by the company that several federal laws preempt local law.

“Immediately I felt some relief,” said Rachel Burger, the co-founder and president of Protect South Portland. “Suddenly it’s like, oh, we might prevail.”

The company said it will continue to fight the ordinance.

“While we are disappointed with aspects of the judge’s decision, our claim under the Commerce Clause remains to be decided,” attorney Jim Merrill, who represents PPLC, said in a prepared statement. “Portland Montreal Pipe Line will vigorously continue its challenge of the ordinance.”

South Portland City Manager Scott Morelli said the city was pleased with the judge’s ruling and will continue to defend the ordinance. “The city looks forward to the opportunity to resolve the remaining issues in its favor,” he said.

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It could be a long haul. No matter the outcome of the trial, both sides are expected to appeal, and the case could wind up before the US Supreme Court.


InsideClimate News is a nonprofit, nonpartisan news outlet that covers climate change, energy, and the environment.