AUGUSTA — A bill that would have set a two-year moratorium on the transportation of oil sands crude in Maine left the Legislature’s Environment and Natural Resources Committee on Monday as a resolution directing state officials to expand a study already in the works.

The committee vote was unanimous.

The bill’s author, Rep. Ben Chipman, I-Portland, decided to amend his bill to remove the moratorium language after hearing from the state Attorney General’s office that a moratorium could conflict with federal law.

LD 1363, called for a legislative resolution setting the moratorium while directing the state’s Department of Environmental Protection to study the potential impacts of moving oil sands, known to environmentalists as “tar sands,” through Maine.

Jerry Reid, an assistant attorney general with the AG’s office, said a moratorium would have preemption issues in that federal law would take precedent over any conflicting state law and it would also be in conflict with federal laws that regulate interstate commerce.

Reid said the state could try to impose a moratorium but it would be “walking on very thin ice” if it did so.

Instead, the committee voted unanimously to use a Legislative resolution to acknowledge the ongoing work of the Maine DEP as it seeks to study a range of issues surrounding the transportation of oil sands crude in Maine.

The DEP will consider all possible modes of moving the product, including pipelines, trains, ships and tanker trucks.

They will also attempt to estimate the state’s ability to deal with an oil-sands spill and calculate a worst-case scenario in terms of cleanup costs as well as possible long-term health and environmental impacts.

The resolve also leaves open the door for lawmakers to revisit regulating oil sands after the report from DEP is issued. The DEP has until Jan. 31, 2014, to report back to the Legislature.

Chipman said he was satisfied the committee came together to offer a compromise that signals the Legislature is concerned about the movement of tar sands oil in Maine.

He said the study would now focus on the specifics of oil sands.

“In the end, we didn’t get the moratorium but we are going to get some useful information and if we get some information back that tells us we should do something to further regulate this, we have the option to bring forward a bill,” Chipman said.  

Melanie Loyzim, with the Maine DEP, said the department was already engrossed in a study around oil sands crude. She told the committee several times Monday, the department essentially was already studying most of the issues of concern.

But Chipman said a resolution would make it perfectly clear what type of information lawmakers were looking for.

Oil sands first became an issue in Maine when the Portland-Montreal Pipe Line Corp. said it would consider moving the crude through the 262-mile system that runs through western Oxford and Cumberland counties in Maine.

The company also has repeatedly said it has no immediate plan to do so, but would consider reversing the flow of the pipeline to bring oil sands crude from Canada to the port in South Portland.

Currently, the company moves various types of crude oil from tankers arriving in Casco Bay to a refinery in Montreal. Most of that crude arrives from overseas locations, including Saudi Arabia, Nigeria and Venezula.

Industry officials also expressed satisfaction with the committee’s decision Monday.

John Quinn, the executive director of the New England Petroleum Council, said the Legislature was recognizing an outright ban on oil sands crude in Maine was “unworkable.”

Quinn said the financial and legal implications were too significant to overcome but he also defended the product, saying it was no more dangerous than other types of heavy crude oil.

“Decades of industry experience and independent evaluations like those conducted by President Obama’s State Department show that oil-sands derived crude is similar in characteristics to traditionally extracted heavy crude when it comes to transportation,” Quinn said. “Industry and the regulatory community should continue to work collaboratively to reduce incident rates and prepare adequate responses in the unlikely event that a spill occurs.”

Environmental groups that have been working to prevent the Portland-Montreal Pipe Line Corp. from pursuing any project to reverse the flow of its pipeline to move oil sands crude through Maine also expressed satisfaction with the committee’s vote.

“There is concern from everyone on the community about the risk that tar sands poses to people’s health and safety and our environment and they want some real answers,” Emily Figdor, executive director of Environment Maine, said. 

Figdor said the state doesn’t have a lot of power in regulating what comes through interstate and international pipelines. She said the issue over what kinds of oil would move through Maine would likely end up in the hands of the state’s Congressional delegation in Washington.

She said South Portland would also have a role to play, as any pipeline reversal would require infrastructure changes that would have to be permitted by city officials.

“But I think today this committee took a fair look at the issue and did what they can, but the fact is they don’t have a lot of power to protect Maine from the very significant risk that tar sands oil poses,” Figdor said.

Earlier in the day, the committee approved a bill that ensures all those moving petroleum in Maine by any means are required to pay a three-cent-per-barrel tariff when they are transported through Maine.

The legislation, offered by Rep. Brian Tipping-Spitz, D-Orono, is aimed at ensuring the state has the resources to clean up an inland oil spill as well as an shoreline one.

“The system we have to protect our rivers should be at least as strong as the system we have in place to protect our shoreline,” Tipping-Spitz said.

Both bills will now go to the full House of Representatives for a vote, likely later this month.

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