March 21, 2013

Vt. oil bill delayed after complaining law firm letter

The Associated Press

MONTPELIER, Vt. — The Vermont Senate has delayed action on a bill toughening environmental reviews over possible changes in the use of a crude oil pipeline after the state's leading business law firm sent a letter outlining potential legal problems if the bill were to become law.

The Senate was to vote Thursday whether to apply Vermont's Act 250 environmental law to a possible flow reversal in the Portland-Montreal Pipe Line that could allow Canadian tar sands oil to be shipped across northern New England to South Portland, Maine.

The existing Portland-Montreal Pipeline carries oil from a port terminal in Maine to a refinery in Montreal, but environmental groups have been warning for months of possible plans to reverse the pipeline's flow and carry heavier-grade "tar sands" oil southeasterly from Canada across New England for shipment out of Portland.

The bill would require changes to the pipeline to come under the Act 250 land use review system if the changes were not solely for the purpose of repairing the pipeline.

The letter from the law firm Downs Rachlin Martin says the bill would discriminate against the company that owns the pipeline, may be pre-empted by federal law and may interfere with the president's power to rule on foreign oil shipments.

Signed by Joseph Choquette III, a lobbyist with the firm, the letter urges the Senate to "seek qualified legal advice" before passing the bill.

"The discriminatory treatment of this one company and facility as arguably prohibited by the Common Benefits Clause of the Vermont Constitution" and "would arguably run afoul of federal pre-emption principles that explicitly ban states from regulating oil pipeline safety," the letter states.

It also said the bill could "constitute an impermissible attempt to nullify the President's exercise of his foreign affairs power" to regulate pipelines crossing the international borders.

It also warned that, "This company (the Portland Pipe Line Co.), like all others, is entitled to protect its rights under the Vermont and U.S. Constitutions related to common benefits and interstate and international commerce."

Some lawmakers said they saw at least a veiled threat of a lawsuit in the letter.

Sen. Robert Hartwell, D-Bennington and chairman of the Natural Resources and Energy Committee, called it "a little over the top. It could be taken as creating an atmosphere that there's going to be litigation, which is a poor way to do it if that's what they're doing."

Senate action was on the bill, which emerged from the Natural Resources and Energy Committee, was halted after Sen. Richard Sears, D-Bennington, asked that the Judiciary Committee, which he chairs, be given a chance to hear testimony about it from Attorney General William Sorrell or someone in his office.

Several lawmakers said talk of federal pre-emption of state regulation was reminiscent of the fight over the Vermont Yankee nuclear plant. Vermont wanted it to shut down when its initial license expired last year. But plant owner Entergy Corp. sued in federal court saying the state had improperly been motivated by concerns over nuclear safety, a matter that federal law leaves to the Nuclear Regulatory Commission.

A provision in the Vermont pipeline bill specifically says the state is not concerned with pipeline safety, a matter that the federal government also regulates exclusively.

"Federal law clearly leaves routing, siting and land use concerns to the province of the states, and that is what Act 250 regulates, not safety," said Jim Murphy, a lawyer with the National Wildlife Federation, which supports the bill. He said the president's authority over international boundary crossings does not trump state authority in those areas.

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