Biden Admin Fights Another Canadian Oil Export Pipeline

(Bloomberg) -- A small coastal city in Maine has won the support of the Biden administration in its fight against a Canadian oil pipeline in what environmentalists see as a signal that other pipelines could face similar treatment.

In a brief filed with the U.S. First Circuit Court of Appeals on Monday, the federal government said that a South Portland ordinance that would effectively prevent crude exports by prohibiting the transfer of crude onto marine vessels isn’t preempted by federal laws.

The picturesque city on the Atlantic is the injection point for a seldom-used, World War II-era oil pipeline that carries crude from the Maine coast to Montreal-area refineries. The Portland Pipe Line Corp, currently exclusively owned by Suncor Energy Inc., has been trying to reverse it for more than a decade so it can export Canadian crude to foreign markets. But the city seeks to prevent the reversal amid concerns exporting crude oil would threaten waterways and air quality.

Environmentalists say the administration’s filing in support of South Portland signals that the Biden Administration may not stand in the way of other local authorities battling oil pipelines through local ordinances.

“The Biden Administration underscored in a new legal filing that federal law doesn’t override a state or locality’s decision about where an oil pipeline should be located,” the National Wildlife Federation said in a release.

In a fight against another Canadian oil company, Michigan Governor Gretchen Whitmer has tried to shut down an Enbridge Inc. pipeline that crosses the Great Lakes by revoking an easement for the line at a time that the company is seeking to build a tunnel under the Straits of Mackinac. Proponents argue Michigan doesn’t have the power to shut down the pipeline.

In response to similar arguments made by the Portland Pipe Line against the South Portland ordinance, the federal government said Congress “explicitly limited” the Pipeline Safety Act’s ability to preempt local authority.

“The Biden Administration’s filing lays to rest the outlandish claim Enbridge Energy and its political allies have repeatedly raised that Governor Whitmer’s historic decision to shut down Line 5 was not hers to make,” Oday Salim, staff attorney for the National Wildlife Federation, said in a release.

The Maine pipeline and Line 5 cases are “radically different,” Enbridge said in an emailed statement. “The issue in the Maine case is related to the loading of vessels, not the transport of oil through a pipeline. Line 5 continues to safely transport energy upon which U.S. and Canadian consumers, refiners and manufacturers depend.”

An email to Suncor seeking comment wasn’t returned.

President Joe Biden entered office seeking to emphasize the fight against climate change. On his first day, he scrapped a permit issued by his predecessor to build the Keystone XL pipeline and he reentered the U.S. into the Paris Climate Accord.

The Maine pipeline, once a key conduit for oil to reach Canadian refineries, has been in gradual decline for years, with flows falling to 4,850 barrels a day last year from 32,239 barrels a day in 2016, Canada Energy Regulator data show.

© 2021 Bloomberg L.P.