Updated at 2:30 p.m. on Feb. 13, 2013.
The portent of a struggle between the Vermont Legislature and the oil industry reared its head on Tuesday.
Larry Wilson, CEO of the Portland Pipe Line Corp., told the House Fish and Wildlife Committee that he strongly opposes a bill aimed at regulating the potential piping of Canadian tar sands oil through Vermont’s Northeast Kingdom.
Wilson’s company owns the Portland-Montreal pipeline, which cuts through the northeast corner of the state. If an oil company wanted to pipe a petroleum product from Alberta’s tar sands to Portland for export, it would need to use this line.
In November, Canada’s Enbridge Oil filed an application with the Canadian government to reverse the flow of oil along a stretch of pipeline between Ontario and Montreal. The company wants to pump oil from Alberta tar sands to Montreal refineries.
Enbridge representatives have repeatedly denied plans to continue piping oil through Vermont along the Portland Pipeline Corp.’s Portland-Montreal Pipe Line for export. But Enbridge doesn’t own that stretch of line, Wilson’s company does.
Wilson told the committee that while his company does not have an agreement with an oil company to pipe tar sands oil through Vermont, it would like to. And he sees no environmental or safety problems with pumping the thicker oil through the line, which he says is the safest way to transport it.
“We are aggressively looking at every opportunity to use these excellent assets in a way that will continue to provide for North American energy infrastructure needs, to provide for sources of revenue for your state and other states, and to provide for jobs,” he told the committee — later adding that such a project would not expand his company’s Vermont workforce, which consists of one permanent employee.
The Portland-Montreal pipeline opened in 1941 — almost 30 years before the state’s governing land-use law Act 250 was adopted. To ensure that Vermont has some say over a change of use to this grandfathered line, Westminster Rep. David Deen, who chairs the Fish and Wildlife Committee, introduced legislation that requires Act 250 review for any alteration to an existing pipeline for any reason “that is not solely for the purpose of repair.” In addition to Deen’s bill, Sen. Ginny Lyons, D-Williston, introduced an identical piece of legislation in the Senate.
Wilson told the committee that he thinks the bill is “discriminatory.” He said his company is more than willing to comply with state and federal laws that are currently regulating the line today, but extra regulations might hinder his company’s market performance.
“It is heartburn for us,” he said. “What I struggle with is I look at the genesis of the regulation and its concerns about the commodity that we might pump. Well, it’s crude oil. It’s a heavier oil, potentially if we have this project, and we’ve pumped heavy oil, and we’re capable of pumping it very safely.”
Wilson told VTDigger that the company tried a test run of tar sands oil in the past, and it went off without a hitch, but he was light on details.
“Sometime in the past we had a movement for one of our customers, who wanted to see how this crude might work,” he said.
At the request of the committee, Wilson listed off a number of past spills from the pipeline.
“In 1952 there was a larger spill,” Wilson said. “In 1965 there was what you might call a larger spill. Then we went to 1994 … there was a one barrel spill. In 2002, I mentioned, less than one barrel. And, in 2003, there was one barrel.”
One barrel is equivalent to 42 gallons of oil.
Jim Murphy, senior counsel for the National Wildlife Federation, said that a spill of the heavier tar sands oil could irreparably harm Vermont habitat, like the state forests that the line runs through.
“With conventional crude, it will still stay in liquid form, so it will flow when it goes in water,” he said. “With diluted bitumen (or semisolid petroleum), there is a natural gas condensate: It will evaporate quickly, leaving the tar sand oil behind. It’s denser than water, so it will sink … this is what happened in the Kalamazoo spill, and why it will never fully be cleaned up.”
Murphy’s organization and other environmental groups across the state have asked the Act 250 commission in the Northeast region of the state to verify that the state’s governing land-use law gives the state authority over these potential changes to the pipeline.
Murphy argues that although the state should have jurisdiction over whether Wilson’s company can pump tar sands oil through the Portland-Montreal pipeline in Vermont, he said Deen’s bill would cement the state’s authority.
“Vermont has a real vested interest in keeping tar sands in the ground and stopping this pipeline or having a say over the pipeline,” Murphy said. “It could make a real difference in whether tar sands ultimately gets developed and what the market is like for tar sands. The state’s interest for having Act 250 jurisdiction over this pipeline is pretty high, whether Larry Wilson likes that or not.”
Correction: The CEO of the Portland Pipe Line Corp is Larry Wilson, not Frank Wilson, as originally reported.
Clarification: According to Portland Pipe Line Corp Spokesman Ted O’Meara, Portland Pipe Line would not enter an agreement with Enbridge Oil to pump tar sands oil through Vermont.
“If there was a plan to bring oil from Canada to Portland Pipeline, the agreement would not be between Portland Pipeline and Enbridge,” O’Meara said. “The agreement would be with whomever is shipping the oil. These are separate companies that own separate lines and one can’t dictate to the other what would go through it’s line.”
