Federal trial challenging South Portland’s ‘Clear Skies’ ordinance concludes

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SOUTH PORTLAND — A federal trial challenging South Portland’s ban on crude oil exports wrapped up on June 21 in U.S. District Court in Portland.

After more than three years of preliminary court filings, hearings and orders, U.S. District Court Judge John Woodcock Jr. must decide whether the city’s so-called “Clear Skies” ordinance violates the Commerce Clause, which gives Congress sole power to regulate foreign and interstate trade.

Post-trial written arguments are due by July 13, and a ruling on the lawsuit filed by Portland Pipe Line Corp. against the city of South Portland will come after that.

The company – a Canadian-owned subsidiary of ExxonMobil, Shell and Suncor Energy – is challenging the city’s “Clear Skies” ordinance, which effectively blocked Portland Pipe Line from reversing the flow of a 236-mile underground pipeline that has carried foreign crude from harbor terminals in South Portland to refineries in Montreal since World War II. Reversing the flow would allow the company to bring Canadian tar sands crude oil to the South Portland waterfront to be shipped to global markets.

Approved by the council in July 2014, the ordinance banned the loading of bulk crude oil, including controversial tar sands oil from western Canada, into tankers on the city’s waterfront. It doesn’t apply to gasoline, diesel, biodiesel, kerosene, jet fuel, home heating oil, asphalt, waste oil, lubricants or other refined petroleum products.

The ordinance’s stated goal was to protect public health and the environment and preserve traditional land use authority to promote future development consistent with the comprehensive plan. It followed a broader waterfront protection proposal that city voters narrowly rejected in a 2013 referendum.

The South Portland City Council banned bulk loading of crude oil on the city’s waterfront in 2014, just as production of controversial tar sands oil was taking off in western Canada and as the U.S. demand for imported crude began to dwindle.

In a bench trial before Judge John Woodcock Jr., the company argued that the ordinance violates the Commerce Clause of the Constitution, which gives Congress sole power to regulate foreign and interstate trade.

The city disputed the company’s claims that the Clear Skies ordinance discriminates against out-of-state competitors, attempts to regulate business outside South Portland and interferes with federal control of foreign commerce.

The city has spent $1.6 million through April on legal fees defending the ordinance and received $168,862 in donations to the Clear Skies Legal Defense Fund. The council has appropriated an additional $491,224 to cover future legal costs related to the case.

The federal case is expected to generate interest across the energy sector and other markets that depend on interstate commerce and seaport access for foreign trade. It also is being watched by environmentalists, who supported the city ordinance as a way to block Canadian oil exports that they argued would accelerate climate change.

Whatever the outcome in U.S. District Court, the case is expected to wind up in the 1st U.S. Circuit Court of Appeals in Boston and take another two to three years to reach a conclusion

Portland Press Herald Staff Reporter Kelley Bouchard contributed to this report. 

A Federal trial on the Clear Skies ordinance wrapped up earlier this month, and the parties now await a judge’s decision. 

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