South Portland weighs lawsuit risk in rail yard propane storage rules

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SOUTH PORTLAND — The city will draft regulations to block any bid to construct new liquefied petroleum gas infrastructure at Rigby Rail Yard.

The intent is to reduce the risk to residents, although it could put the city at risk of a lawsuit by yard operator Pan Am Railways.

City councilors on Monday unanimously approved a first reading of amendments to the city’s fire code that would tighten restrictions on commercial propane facilities across the city.

The proposed changes to the code would, among other things, require more distance between bulk propane facilities and nearby homes, businesses and other public spaces. They would have immediate impact on a pending Rigby Yard proposal from NGL Terminal Supply Co.

But because Pan Am is federally regulated, it has wide berth to operate the yard. If South Portland attempts to regulate the railroad, it would likely be overstepping its jurisdictional bounds.

The move could have an effect similar to the Clear Skies Ordinance, which restricted Portland Pipe Line Corp. from piping unrefined tar sands through South Portland. That eventually led to a lawsuit, which the city is still contesting.

“Preventing federal preemption is paramount,” Mayor Tom Blake said at the Feb. 1 meeting. “I’m not afraid of fighting the railroad.”

Amending the Fire Code and Protection language is the latest attempt by the council to derail NGL’s plan to build a propane storage facility at the northern end of Rigby Yard, between Thornton Heights and Cash Corner. The council also considered a moratorium, but could not muster enough votes to enact the freeze.

Late last week, NGL submitted a revised application for a 24,000-gallon above-ground storage tank, served by rail cars, in a fenced-in area. The rail cars would be backed out of the area at night in order to avoid having filled tanks on the property for more than 24 hours, which would prevent the cars from being considered fixed storage.

“While operationally inefficient, these activities will ensure zoning compliance and are a measure of NGL’s continued commitment to cooperate with the city,” according to the Jan. 26 application.

Not far enough?

Councilor Brad Fox, an opponent of the NGL plan, said the proposed fire code changes don’t go far enough. He said the point of drafting an amendment like this is not only to protect the city against NGL’s application, but to challenge the federal government’s rail yard oversight.

Residents, including some who have opposed the NGL plan, urged councilors to set aside their differences and work toward a solution.

“Egos have to be put aside on either side of the issue,” said Devin Deane, of Thirlmere Avenue. He said he agrees with the proposed ordinance language.

“We have a private entity proposing a dangerous way of doing this so close to me and my neighbors,” Deane said. “This ordinance addresses that.”

Going further and trying to block Pan Am’s potential federal preemption is a “trickier issue,” he said.

Jeff Selser, of Summit Street, asked the council to think about what’s at risk.

“What you’re putting in play are these people’s homes and these people’s safety. Think about that,” Selser said. “Think about your insatiable desire to take on the Surface Transportation Board, and the fact that it appears to some of us that you’re using a neighborhood as a pawn.”

‘Uphill battle’

City attorney Sally Daggett said twice during the meeting that taking on the railroad and federal preemption would be an “uphill battle.” A victory for the city would be unprecedented, City Manager Jim Gailey added.

The proposed amendments are “comprehensively drafted,” with a “logical connection to the city’s legitimate regulatory authority to protect the health, safety and welfare of its residents,” according to a Jan. 28 memo from attorneys Kevin Conroy and Jesse Alderman of Boston-based Foley Hoag, the city’s outside legal counsel.

But the city puts itself at risk of being sued simply by instituting stricter regulations than established by federal law, they said, so it is likely that any new ordinance language “will be challenged either in court or before an administrative agency.”

The city wants to make the distance between any commercial propane storage or distribution facility 40 times greater than required by the National Fire Protection Agency and federal law.

This range effectively zones out virtually all commercial propane facilities. But that’s not the intention, Gailey said by phone Wednesday.

Legally speaking, he said, “we cannot do that. That’s why we need to go back and see if there’s another sliding scale we can use to reduce that number.”

Staff will continue working on the technical aspects of the draft and will present a refined draft at the March 7 meeting.

Councilors, meanwhile, sparred over the ethics of possibly carrying the city into another lawsuit.

“The public has a right to know whether we are stepping into a million dollar lawsuit and what those consequences might be,” Councilor Claude Morgan said.

“I wonder what a human life is worth?,” Fox responded.

Alex Acquisto can be reached at 781-3661 ext. 106 or Follow Alex on Twitter: @AcquistoA.

The City Council is slated to adopt new ordinance language that will put more restrictive regulations on commercial liquefied petroleum gas facilities throughout the city, primarily in Rigby Rail Yard.

South Portland and Scarborough reporter for The Forecaster. Graduate of Western Kentucky University and the Salt Institute for Documentary Studies. Alex can be reached at 781-3661 ext. 106.