Owner disputes report that Maine oil pipeline has exceeded life span

Posted March 13, 2014, at 2:55 p.m.
Oil conduit leads away from the Portland Pipe Line Corp.'s terminal facility on the South Portland waterfront last year.
Oil conduit leads away from the Portland Pipe Line Corp.'s terminal facility on the South Portland waterfront last year. Buy Photo
Emily Figdor, director of Environment Maine, tells reporters about her organization's belief that plans are afoot to reverse the flow of the pipeline through Maine to accommodate the export of controversial tar sands oil from Alberta, Canada, in Portland in 2012.
Emily Figdor, director of Environment Maine, tells reporters about her organization's belief that plans are afoot to reverse the flow of the pipeline through Maine to accommodate the export of controversial tar sands oil from Alberta, Canada, in Portland in 2012. Buy Photo

SOUTH PORTLAND, Maine — Environmentalists are pointing to a New Hampshire court document as evidence the Portland-Montreal pipeline has exceeded its life span and can’t be trusted to safely transport so-called tar sands oil.

Portland Pipe Line Corp. officials counter that groups such as Environment Maine, the Natural Resources Council of Maine and National Wildlife Federation are taking the court filing out of context for use as part of a “scare” campaign.

The latest salvos in the debate over the controversial oil sands bitumen in Maine come nearly a week after the Canadian government agreed to allow energy giant Enbridge to expand and reverse the direction of its oil pipelines leading to Montreal.

Those changes could accommodate the transportation of the heavy oil from the oil sand fields of Alberta east to Canada’s second largest city.

Maine environmentalists have argued the Portland-Montreal pipeline will be the next domino to fall as Enbridge seeks a pathway to an Atlantic Ocean port and, by extension, international markets on this side of the globe.

The 236-mile-long largely Maine-based pipeline now flows east to west, delivering less controversial crude oil from tankers off the coast of South Portland to Canadian refineries. In order to accommodate the oil sands bitumen, that pipeline would have to be reversed like Enbridge Line 9 across the border.

On Thursday, the National Wildlife Federation released recently unearthed copies of a 1994 New Hampshire Supreme Court document tied to a dispute over property taxes between Portland Pipe Line Corp. and Gorham, N.H., through which the pipeline runs. In that case, the company argued it should be granted a tax abatement, in part, because the life span of the pipeline was only 60 years, not 90 years, which was the figure the town was using in its calculations.

Using that 60-year life span, the environmental groups argued, makes the company’s 1950 18-inch pipeline — the older of two parallel lines and the one most likely to be used for the heavier oil, the federation asserted — already outdated.

Much like in the debate over the higher profile Keystone XL pipeline, which is proposed to carry the oil sands bitumen from Canada through the American Midwest to the Gulf of Mexico, environmentalists have come out in vocal opposition to any hint that the heavier oil might be transported through Maine.

Environmentalists have insisted that because of its corrosive nature — as well as the high heat and toxic chemicals needed to dilute the heavier oil for transportation — the tar sands oil is three times more likely to burst pipelines and spring leaks. The same characteristics that have made the material dangerous for pipelines also make it difficult to clean up once it’s leaked, they’ve argued, and environmental groups frequently point to spills in the Kalamazoo River in Michigan and Mayflower, Ark., to prove their points.

“This is yet another reason any tar sands project in Northern New England is far too risky,” said Jim Murphy, senior counsel at the National Wildlife Federation’s Northeast Regional Center, in a statement. “As we saw with the tragic tar sands oil disaster in Mayflower, Ark., last year, these old pipelines can and will fail. It would be utterly irresponsible to try to pump impossible-to-clean-up tar sands through a pipe the company itself admits is past its retirement date and that crosses some of New England’s most sensitive wildlife habitat.”

The Portland-Montreal pipeline passes near Sebago Lake, which provides drinking water to 15 percent of Maine’s population.

“These [court] documents are the smoking gun that should finally put an end to any attempt by the oil industry to use the pipeline to carry tar sands. Enough is enough,” said Emily Figdor, director of Environment Maine, in a statement.

But Jim Merrill, spokesman for the Portland Pipe Line Corp., countered that the New Hampshire court documents are being inappropriately used by the environmental groups.

“The [National Wildlife Federation] assertion that the pipelines’ lifespan is 60 years and ‘past retirement date’ based on a [New Hampshire] Superior Court property tax decision is false, grossly misleading and takes technical property tax appraisal terms dramatically out of context, all in a ploy to scare the public,” Merrill said in a statement issued to the Bangor Daily News.

“[The court filings] are referring to the economic life of the pipeline and not the physical life, and they usually do not coincide. Economic life is a technical concept used by appraisers and accountants, which measures, among other things, future market demand for the pipeline system, in order to properly calculate the deduction from a replacement cost analysis for property tax appraisal purposes,” he continued. “The stated ‘economic life’ of the pipeline is a theoretical assumption for property tax purposes, which usually has little to do with the physical integrity of the pipeline.”

Figdor shot back that the court filing in question specifically states the life span figure “takes into account functional and economic depreciation as well as physical depreciation.”

But Merrill suggested the court information was a calculation based on theoretical depreciation, and never was meant to consider upgrades and significant maintenance work over time that would preserve the use of the infrastructure.

“Pipelines have an indefinite lifespan if properly maintained, and not only does [the U.S. Pipeline and Hazardous Materials Safety Administration] closely regulate Portland Pipe Line, but the company has been recognized as one of the safest operators in America,” he said. “The energy-consuming public deserves better than these types of misleading and wildly inaccurate accusations by special interest groups who clearly have a broad agenda to undermine the hardworking men and women who strive every day to safely deliver vital energy products that keep our cars running, our homes warm and our economy on the move.”

 

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