A national petroleum lobbying group is gearing up to sue the city of South Portland if it moves forward next week with a moratorium on loading Canadian tar-sands oil onto ships at the city’s waterfront.

The five-page letter lays out a raft of legal positions against the proposed six-month moratorium and threatens legal action if it is enacted. The letter is dated Dec. 3 and was both emailed and hand delivered to the seven city councilors, City Manager Jim Gailey, City Planner Tex Haeuser and Corporation Council Sally Daggett. It is the second such letter sent from the group to South Portland officials.

Signed by Harry Ng, general counsel and corporate secretary for the American Petroleum Institute, the letter is the latest volley in the disagreement over the future of South Portland’s oil industry, and specifically whether the Portland Pipe Line Corp. should be permitted to reverse the flow of its 236-mile underground pipeline between tank farms in South Portland and a refinery in Montreal.

If reversed, the pipeline could be used to transport so-called tar sands crude from reserves in the province of Alberta. Volatile chemicals are added to the sticky mixture of sand, water and raw petroleum so it can flow through the pipeline.

Tar sands oil has been targeted nationally by environmentalists who say its development will accelerate global climate change and pose other environmental risks. The petroleum industry has said it poses no greater risk than other types of oil.

“The proposed Moratorium could cause substantial harm to local, state, and national interests,” Ng wrote. “The facts do not support the proposed Moratorium’s claims that the transport and handling of oil sands products may pose greater environmental and safety risks than petroleum products from other sources.”

Ng argues that the moratorium would not meet legal criteria for such measures; that federal and state laws regarding pipelines and pipeline safety override local ordinances; and that it would violate the Commerce Clause of the U.S. Constitution.

Councilor Tom Blake, an outspoken proponent of banning tar sands oil shipments through South Portland, said the letter did not surprise him.

“From the beginning it was clear the petroleum industry will oppose anything that restricts them, and they’ve made that quite clear. The M.O. for the petroleum industry is to do what they want, when they want, and they’ll do whatever they have to to block it.”

City councilors took up the moratorium in November, one day after voters turned down by a narrow margin a controversial citizen-initiated referendum effort that among other things would have prohibited loading petroleum onto ships on the South Portland waterfront.

The six-month moratorium, if approved by the City Council Monday, would take effect immediately and end May 6. It is intended to buy the council time to draft its own ordinance governing waterfront activity, and to decide whether to ban the export of petroleum through the city’s port.

Mayor Jerry Jalbert said although the referendum failed, he is still hearing from constituents who oppose allowing tar sands oil in South Portland.

“People’s feelings are clear …” Jalbert said. “They don’t want to be known as the tar sands capital of the United States.”

The city’s planning board recommended in a non-binding 4-2 vote earlier this month that the moratorium be passed.

The American Petroleum Institute declined further comment on the letter, and Gailey did not return a call seeking comment.

Matt Byrne can be contacted at 791-6303 or at:

[email protected]

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