UPDATE: South Portland waterfront ordinance backers dismiss industry claims of job, earnings losses

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SOUTH PORTLAND — Proponents of the proposed Waterfront Protection Ordinance say claims of 5,600 fewer jobs and $252 million in lost earnings over the next decade from petroleum industry closures are false and misleading.

Robert Sellin, who heads the Protect South Portland political action committee, which is working to pass the Nov. 5 citizen initiative, Tuesday said a report predicting the economic consequences is fallacious.

“It is based on an absolutely false assumption that this will shut down the waterfront,” Sellin said.

The report by economist Charles Lawton, commissioned by the Maine Energy Marketers Association, was presented Monday morning in a news conference at the Sprague Energy facility near the Fore River.

The premise of the report, Lawton said, was to project the effects of seven petroleum companies closing down because of proposed ordinance language banning “enlargement or expansion” of tanks and loading facilities, and loading petroleum into tankers docked in the city.

Lawton arrived at his conclusions by measuring how entrenched petroleum companies are in the city and greater Portland.

“Not so much surprising as eye-opening is the dependence of all Mainers on a wholesale distributions system,” Lawton said Monday, noting the companies provide gasoline, heating oil and aviation fuel for much of the state.

Lawton’s conclusions were further emphasized by MEMA Executive Director Jamie Py, Sprague Energy Vice President Burt Russell, Associated General Contractors of Maine Chief Executive Officer Matthew Marks, President Beth Sturtevant of Westbrook-based construction company CCB (also chairwoman of AGC of Maine), and Joyce Newman, a past president of the Maine chapter of the National Association of Women in Construction.

Russell said his company has postponed a half-completed $1.5 million pipeline upgrade project until after the referendum vote, and said the stoppage will affect project workers and suppliers.

That was a claim Sellin found disingenuous, because Sprague Energy filed a permit application with the Maine Department of Environmental Protection on Sept. 13 to construct trestles for pipelines in the commercial shoreland protection zone affected by the ordinance.

“They are just pulling out all the stops,” Sellin said of ordinance opponents. “In my opinion, it is the dirty oil playbook. If they can seed enough doubt, it is going to stick with some people.”

As described in application documents submitted by project manager Joseph Marrone of Ocean and Coastal Consultants of Trumbull, Conn., the 160-foot trestle with nine piling supports will re-route existing pipelines from a deteriorating catwalk and bulkhead.

On Wednesday, Russell said the permit was filed for the third stage of the project a week before the decision to postpone work. Pipelines from the pier have already been installed, but he said the company does not want to risk passage of the ordinance.

In his remarks, Py said voters should pay attention to the ordinance language, not the proponents’ stated intent to block importation of Canadian “tar sands” oil via Portland Pipe Line Co. pipelines from Montreal.

Py echoed Portland Pipe Line Co. President Larry Wilson’s assertion the company has no current plans to import the oil to South Portland, where it would be loaded into tankers at a pier near Bug Light Park.

“This will jeopardize the working waterfront as we know it. We are basing our opinions on fact, not emotion,” Py said. “There are no (tar sands) projects in sight.”

His claim was disputed by attorney Natalie West of South Portland, who wrote the proposed ordinance revisions.

“It is not true for PPL to say that there is no project to bring tar sands oil to South Portland,” West said, citing a 2009 DEP permit application for pipeline reversal that was extended by the department in 2012 through Feb. 25, 2014.

She noted the South Portland Planning Board in 2009 approved the construction of two, 70-foot “vapor combustion units” which would be needed at the company pier to burn off additives in the bituminous slurry.

That permit has since lapsed, but West said the ordinance is the best way to keep the Planning Board from considering a new application using the same grounds that led to approval four years ago.

“People were told there is nothing they can do,” she said. “There is something they can do. They can vote for the WPO.”

Lawton’s report, written with assistance from professor Charles Colgan of the University of Southern Maine, also found shutting down petroleum industries would harm city finances.

Assessment Department records show the seven petroleum companies pay $1.4 million in city taxes on 380 acres currently valued at almost $85 million. The companies also pay $8 million in state and local fees and taxes.

Lawton said the companies employ about 85 people earning a total of almost $9 million, while spending almost $29 million in non-labor operating costs and on capital improvements. Indirectly, Lawton estimated companies spend about $26.6 million annually, supporting about 250 jobs and $12 million in income.

He assigned an “employment multiplier” value of 3.9 to the local petroleum-based industry, meaning it sustains a wide network of economic activity, in his view.

“These good jobs generate an above-average employment multiplier because of the volume of consumer spending they provide to local retailers and service providers,” he said.

Another impact would be on the Portland waterfront, the report said, because 84 percent of cargo ships arriving and leaving port in 2011 were oil tankers carrying 94 percent of the total cargo volume. The loss of all tanker traffic would affect a wide variety of suppliers and contractors in the area, Lawton said.

At the same time, the need to ship fuel and heating oil to the city by truck could add as much as 10 cents a gallon to energy costs, Lawton concluded.

Py estimated passage of the ordinance would cost each Maine family $300 annually in increased fuel and energy costs. Some products could still be shipped to terminals in Bangor and Searsport, but Py said gasoline could only arrive by truck from Chelsea, Mass.

Lawton’s report came five days after Protect South Portland released a letter signed by owners of 216 businesses opposed to importing tar sands oil. Marks, Sturtevant and Newman said those are businesses that could be harmed by the consequences of job losses and increased energy and fuel prices.

“As written, (the WPO) is reckless,” Marks said. “… Local taxpaying businesses deserve better than to be run out of town.”

Marks and Sturtevant said increased energy costs and lost waterfront construction jobs will blunt economic recovery. Sturtevant added that the energy industry is a sector where construction employment has remained steady over the last seven years.

“I hope this is reviewed, discussed and a clearer picture is presented,” Newman said.

Monday’s news conference was the first of several events planned by the South Portland Working Waterfront Coalition to promote its case against the Waterfront Protection Ordinance.

Lawton will discuss his report at 7 p.m. Thursday at the Redbank Community Center, 62 MacArthur Circle East, and a “Working Waterfront Family Day” will be held from 9 a.m.-3 p.m. Saturday at Bug Light Park.

David Harry can be reached at 781-3661 ext. 110 or dharry@theforecaster.net. Follow him on Twitter: @DavidHarry8.

Sidebar Elements

Charles Lawton, chief economist at Portland-based Planning Decisions, presents his report on the potential impact of a proposed Waterfront Protection Ordinance in South Portland on Monday morning. Lawton, speaking at Sprague Energy in South Portland, estimated 5,600 jobs with earnings of $252 million could be lost over 10 years if the ordinance passes.

Portland City Hall reporter for The Forecaster. Baltimore native, lived in Maine since 1989. A journalist since 2005, covering much of Cumberland and York counties. I joined The Forecaster in 2012.