Maine is not an oil-producing state and there are no refineries here. Maine gets its refined petroleum products from refineries in Saint John, New Brunswick, and, to a lesser extent, Montreal.
This simple geographic fact must be repeated several times, apparently, in order to understand why the recently enacted South Portland zoning changes that prohibit crude oil from being loaded onto tankers has nothing to do with the flow of American-produced crude oil to refineries and has nothing to do with you as a consumer of refined petroleum products.
Ottawa lawyer Peter Burn is the voice of Canada’s oil producers, saying that South Portland is powerless and foolish to stand in the way of their promised delivery of Canadian crude oil at the higher exported crude price, rather than the discounted U.S. price.
The 1975 Energy Policy and Conservation Act banned crude oil from being exported from the U.S. The logic then was the same as the logic now: Why would the U.S. export what it imports to meet its demand?
The U.S. is a major consumer of oil in the world, surpassed only by China in recent years. And, in recent years, U.S. oil production has inched closer to satisfying our own domestic demand. As such, the ban on exportation of U.S. crude oil keeps prices for crude at a lower price – the so-called West Texas Intermediate benchmark. Elsewhere in the world, oil is traded at a higher price, the so-called Brent benchmark.
Canada does not have a ban on export of crude, but its biggest market is its neighbor to the south – the U.S.– and the U.S. is trading at the WTI price, which is less than Canadian producers want for their product.
This should be good news for U.S. consumers: We realize lower prices as our demand is more closely met by domestic supply.
But U.S. producers want to lift the EPCA ban so that they can sell American crude oil at the higher Brent price. If the ban is lifted, consumer prices in the U.S. will inevitably rise as U.S. demand will be pooled with global demand. Meanwhile, Canadian producers want to access global markets with their landlocked tar sands.
As oil profits are exported, Mainers would realize only the higher risks of tanker loading, including the massive new output of toxic emissions.
We are South Portland residents exercising our home-rule authority to choose the direction of development in our city. We are not taking orders from San Francisco or Washington, and neither will we take orders from the foreign corporate interests Burn represents.
Eben Rose is a South Portland resident, geologist and policy committee co-chairman of Protect South Portland.