Maine port city’s ban on crude exports prompts oil industry threats

The decision by a small coastal city in Maine to ban the export of crude oil from its harbor brought threats of lawsuits from the oil industry Tuesday and put South Portland on the front lines of a battle over development of Canada’s huge and controversial tar sands deposits.

The ban, which the City Council approved late Monday by a 6-1 vote, was the result of an 18-month campaign by residents and Maine environmentalists. And it has rattled the oil industry.

“We may be a small city, but, boy, we’ve done a big thing,” said Mary-Jane Ferrier, spokeswoman for Protect South Portland, which headed the campaign in the town of 25,000 adjacent to Portland. “We know it may not be over yet, and we’re committed to defend this victory from oil industry attacks.”

The city’s action came in response to an oil company’s plan to reverse the flow of an import pipeline that takes oil from the South Portland harbor, the New England hub for importing crude oil and distributing fuel.

Reversing the Portland-Montreal Pipe Line would enable the harbor to become an export terminal for crude oil from Canada’s tar sands, the same petroleum that would run through the proposed Keystone XL pipeline in the Great Plains.

Canada sells nearly all its tar sands crude to the U.S. at a steep discount from global petroleum prices. Exporting to other countries would boost prices and spur tar sands extraction, generating more money and jobs for Canada. Pipeline companies and the Canadian government are eager to build routes to both U.S. coasts. Towns and environmentalists along the proposed routes increasingly have mobilized to try to seal them off.

The Portland-Montreal Pipe Line is owned by a Canadian subsidiary of ExxonMobil Corp. and Suncor Energy Inc., both heavily involved in extracting petroleum from tar sands.

The American Petroleum Institute, the industry’s main lobbying organization, sent a letter this year to South Portland officials warning that a law blocking exports “would face strong legal challenges.” On Tuesday, institute spokeswoman Sabrina Fang said, “We’re still considering all of our options in responding to the vote.”

Leaders of the regional oil industry promised to block the measure.

“The men and women of the Working Waterfront Coalition — [a local marine industry group] whose livelihoods were treated as casual collateral damage throughout this process — will evaluate all political and legal means available to us to overturn this ordinance, “ said Jamie Py, president of the Maine Energy Marketers Assn., a regional trade organization of energy wholesalers and retailers. “The fight is not over.”

On that point, at least, both sides agree. Activists who pushed for the export ban said the vote added to the opposition spreading at the local level against the North American oil-and-gas boom, including the growth in tar sands oil extraction. They’re preparing for litigation.

South Portland does not plan to use tax revenues to protect its ordinance, given how divisive the issue has been, Mayor Jerry Jalbert told reporters in a conference call. The town plans to establish a legal defense fund that could receive money from North American environmental groups and other donors, he said.

neela.banerjee@latimes.com