Oil shipments by rail in Maine

Since 2011, oil shipments across Maine to New Brunswick have skyrocketed. The Montreal, Maine & Atlantic Railway and Pan Am Railways carry crude oil that originated in North Dakota to a refinery owned by J.D. Irving in St. John, New Brunswick. An Irving subsidiary, Eastern Maine Railway, connects to the MM&A and Pan Am lines in Mattawamkeag. Pan Am has not yet reported its oil total for April.

Source: Maine Department of Environmental Protection

July 12, 2013

Is Maine on top of oil-by-rail risks?

It has little authority on safety and a shrinking spill-cleanup fund amid soaring oil shipments.

By Steve Mistler smistler@pressherald.com
State House Bureau

and Tom Bell tbell@pressherald.com
Staff Writer

(Continued from page 1)

Today's poll: Moving oil

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A Pan Am Railways train moves oil through Portland’s Riverton neighborhood in May.

Dennis Hoey/2013 Press Herald file

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TO VIEW railroad safety records in the U.S. maintained by the Federal Railroad Administration, go to: http://safetydata.fra.dot.gov/officeofsafety/default.aspx

TO SEARCH crashes for Montreal, Maine & Atlantic specifically, go to: http://1.usa.gov/12GxTod

Last year, Pan Am Railways told the Portland Press Herald that it had “spent several million dollars upgrading its tracks in Maine.”

According to the state’s 2006 report, installation of 132-pound rail would cost $208,000 per mile. Last year, the American Society of Civil Engineers gave Maine’s railroads a grade of C.

Crude oil shipments in Maine jumped from 25,000 barrels in 2011 to 5.2 million in 2012. Oil shipments for the first three months of this year averaged about 800,000 barrels a month.

Chalmers “Chop” Hardenbergh, editor of Atlantic Northeast Rails & Ports, a trade journal, said that with oil shipments on the Maine Montreal & Atlantic Railway shut down because of Saturday’s crash, Pan Am Railways will likely see its oil shipments increase.

Pan Am Railways runs trains through the most populated parts of Maine, including Saco, Biddeford, Portland, Auburn and Lewiston. It now runs about seven to 10 oil trains per month, Hardenbergh said.

The Maine Department of Environmental Protection is investigating the company’s failure to pay two months’ worth of tariffs into the Maine Coastal and Inland Surface Oil Clean-up Fund. The fund, established in state law, assesses a 3-cent tariff on each barrel of crude oil shipped through the state to help pay for any cleanups.

Reuters reported Thursday that Pan Am has not paid since April.

Jessamine Logan, spokeswoman for the DEP, said Thursday that a delay isn’t uncommon, but a two-month delay is. “We are investigating and following up with them,” she said.

The amount of money in the cleanup fund has also come under scrutiny, falling from $6.7 million in 2003 to $3.7 million in 2012, according to DEP data. Expenditures for cleanup have exceeded revenue four times since 2007, including last year.

The decrease has been caused by a sharp reduction in tariffs collected from oil transports on the Portland-to-Montreal pipeline.

Logan noted that the Legislature has taken nearly $1 million from the fund over the last 10 years to balance the state budget. Additionally, she said, lawmakers have drawn more than $2 million from a separate groundwater remediation fund.

This year, the DEP supported L.D. 1340, a bill sponsored by Rep. Ryan Tipping-Spitz, D-Orono, that closed a loophole allowing railroads to avoid the tariffs. But the department opposed a section of the bill that would have increased the tariff by 1.5 cents per barrel of crude oil if the fund fell below $2 million.

Lawmakers approved, and Gov. Paul LePage signed, a bill that closed the loophole but excluded the tariff increase.

The groundwater cleanup fund has a similar trigger, allowing the DEP commissioner to reassess tariffs if the fund falls below $10 million, and increase them if it hits $5 million.

The DEP said the increase in the surface water fund wasn’t necessary because “if a catastrophic event occurs, the state can leverage other funding sources to finance cleanup and recover those costs from the responsible parties.”

Joe Payne, a member of the state’s Oil Spill Advisory Committee and the Friends of Casco Bay, an environmental group, disagreed. He said Thursday that the fund barely paid for the numerous small oil spills that occurred in 2012. A disaster, he said, could knock the state on its heels.

“Less oil coming in doesn’t mean less risk,” Payne said. “All it takes is one big one.”

In March, Pan Am Railways had a close call when 13, 31,000-gallon tanker cars derailed about 100 yards from the Penobscot River.

Just three gallons spilled, according to state officials, and none of the tankers was punctured.

Steve Mistler can be contacted at 791-6345 or at smistler@pressherald.com

Twitter: @stevemistler

Tom Bell can be contacted at 791-6369 or at tbell@pressherald.com

Twitter: TomBellPortland

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Today's poll: Moving oil

Are you concerned about crude-oil trains running along the shores of Moosehead Lake?

Yes

No

View Results