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Shrinking pipeline shipments deplete Maine’s oil cleanup fund

Tux Turkel | The Portland Press Herald (Portland, Maine)

The steep decline in crude oil shipments on the Portland-Montreal Pipe Line is having a collateral effect on a state fund that sets aside money to clean up petroleum spills on the water.

The Surface Oil Clean-up Fund is used to respond to accidents on the coast and during land transportation, such as a rail or truck spill into a lake.

The fund collects a 3-cent-per-barrel fee on both crude oil and refined products, such as gasoline. In the event of a spill, the state pursues the responsible parties to pay for cleanup and other expenses.

The Portland-Montreal Pipe Line is the largest contributor to the fund. Figures from the Maine Department of Environmental Protection show the pipeline contributed $3 million in 2010. But the volume of oil moving through the pipeline has been declining since then, and so has money going into the fund.

Contributions have fallen from $1.9 million in 2011 to $1.6 million last year. The sharpest decline is being seen in the first seven months of this year, when the pipeline accounted for only $558,000.

Falling revenue in the surface oil cleanup fund is not a new problem. Conservation, more fuel-efficient cars and heating systems, and shifts to other fuels are cutting the overall use of oil in Maine and the United States.

In 2012 and the first half of 2013, the fund got a boost when railroads began hauling crude oil through Maine to New Brunswick. But Pan Am Railways stopped paying the fee midway through 2013, and all oil-by-rail traffic through Maine stopped after the derailment in Quebec.

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The fund had $3.5 million in fiscal year 2004, according to the DEP. It fell to $2.5 million in the last fiscal year.

Similar marketplace forces also are putting pressure on the DEP’s Groundwater Oil Clean-up Fund, which gets money from fees on petroleum products and is used to clean up accidents that threaten groundwater.

The shrinking revenues worry the Maine Energy Marketers Association, which is largely made up of oil dealers.

“It looks like the major drop-off is because of crude oil shipments,” said Jamie Py, the group’s executive director. “If volumes don’t increase on the pipeline, the surface fund is going to run out of money.”

Py, who serves on a board that reviews fund operations, said discussion has turned to merging the surface and groundwater funds, which would shift more of the contributions to gasoline and heating oil. Such a change would require legislative action, he said.

The DEP says it recognizes the problems and is working on them.

“Our main priority is to preserve our programs and their goals of environmental protection,” said spokeswoman Jessamine Logan. “We believe that we can find administrative efficiencies within both funds and continue to work toward a 21st century approach by responding to the marketplace.”

“We are looking at all of our options regarding the declining revenues of the surface fund,” she said. “The department has seen a decline and we are planning accordingly.”

 

 

This article was written by Tux Turkel from Portland Press Herald, Maine and was legally licensed through the NewsCred publisher network.