Maine Court Ruling Threatens Canada U.S. Pipeline Commerce: Report

Unchallenged, Canada U.S. pipelines ruling may spur more anti-energy moves, says Frontier Centre for Public Policy
Published on August 10, 2023

A court battle unfolding in the quaint port city of South Portland, Maine, has ignited concerns over its potential to reverberate through the energy pipeline commerce between Canada and the United States, according to the Frontier Centre for Public Policy.

The clash, according to Senior Research Associate Joseph Quesnel, author of One U.S. Court Battle Could Reshape the North American Energy Economy, started when the Portland Pipeline Corporation set its sights on reversing the flow of an underutilized Second World War-era pipeline that connected Montreal and Maine. City council, Quesnel said, “quickly enacted a zoning ordinance that effectively banned the bulk loading of crude oil tankers, citing pressing local air quality concerns.”

With stakes soaring, the Portland Pipeline Corporation then took the matter to court, contending that the local ordinance was in direct violation of the U.S. Constitution, which bestows powers over interstate and foreign commerce exclusively to Congress. The company claims that the ordinance is but a piece in an intricately woven puzzle orchestrated by both U.S. and Canadian environmentalist groups. Allegedly, these groups aim to impede the entry of “dirty” Canadian oil sands oil into the United States.

However, in 2018 a federal court decided to dismiss the challenge, ruling that the ordinance, despite evidence of a broader campaign by environmentalist non-governmental organizations (NGOs) against Canadian oil, did not infringe upon the U.S. Constitution. “The company decided not the challenge the ruling,” Quesnel said, leaving the lower court judgment unopposed. “This could potentially set a precedent that may sway other judges in comparable cases,” Quesnel added.

Quesnel said that the court battle in Maine could be considered as part of a larger concerted effort by environmental groups and U.S. economic nationalists to obstruct the energy sector, as documented in several investigations, including the Allen Inquiry in Alberta. “The theory of “Baptists and Bootleggers,” said Quesnel, “may shed some light on why seemingly opposing parties are finding common ground in an attempt to limit Canadian oil.”

On the Canadian side of the border, the courts have displayed a contrasting stance, according to Quesnel, upholding the federal government’s authority over inter-provincial and foreign commerce, thus offering a glimmer of hope for safeguarding energy projects in Canada.

Nevertheless, there is a concern that the unchallenged U.S. court ruling could embolden environmentalists on both sides of the border to advocate for more localized ordinances in the United States aimed at restricting energy infrastructure. “Both American and Canadian energy producers must brace themselves for potential challenges lying ahead,” said Quesnel.

The ramifications of this court battle loom large over the energy pipeline industry and cross-border commerce between Canada and the United States, according to Quesnel. As the case unfolds, stakeholders in the energy sector will need to keep a watchful eye on the developments and potential impacts on the intricate landscape of energy trade.

“This court battle stands as a pivotal moment in shaping the energy future of both nations,” said Quesnel, “and its outcome could shape the course of energy commerce for years to come. “

 

To interview Joseph Quesnel, click here.

Download Frontier Backgrounder – One U.S. Court Battle Could Reshape the North American Energy Economy (15 pages)

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