First Circuit Acts on Appeal by South Portland Pipeline Company

On January 10, 2020, the U.S. Court of Appeals for the First Circuit acted on the Portland Pipe Line Corporation’s (PPLC) appeal of the district court order upholding a South Portland zoning ordinance that prohibits the bulk loading of crude oil onto marine vessels. Portland Pipe Line Corp. v. South Portland, — F.3d —, *1 (Jan. 10, 2020). The City enacted the Clear Skies Ordinance (CSO) to effectively block PPLC’s proposal to reverse the flow of its oil pipeline in order to transport Canadian crude oil for loading onto tankers in South Portland. The First Circuit certified to the Maine Supreme Court three questions concerning whether a license granted to the PPLC by Maine’s Department of Environmental Protection (MDEP), pursuant to the Coastal Conveyance Act, preempted the CSO.

Specifically, the First Circuit has asked the Law Court to consider the following:

• If the MDEP license constitutes an “order” with preemptive effect under the Maine Coastal Conveyance Act (CCA), 38 M.R.S. § 556
• Assuming the MDEP license is an order under the CCA, whether section 556 expressly preempts the CSO
• Does the CCA otherwise impliedly preempt the CSO

Id. at *3.

The CSO was enacted due to local environmental and air quality concerns triggered by PPLC’s proposal to reverse the flow of its pipeline that currently transports crude oil from South Portland to Montreal, Canada. The company’s proposed flow reversal arose as the demand in Canada for crude oil from the pipeline dwindled alongside a boom in production from Canadian oil sands. The First Circuit stated that the answers to the three questions of state law could conclusively “sidestep the federal quagmire” of federal constitutional law, upon which the case is currently before the Court. Id. at *1. In addition, the Court explained, “uniquely local policy interests at stake here also support certification.” Id. at *5.

The First Circuit’s Order places before the Maine Supreme Court a fundamental question of first impression regarding the extent of municipal home-rule authority over energy infrastructure projects subject to extensive state and federal regulations.

Please contact Verrill’s Energy Law Group with questions about this post and other matters of energy or utilities law.