Amid $30 bbl. prices in the energy industry recession, some of the urgency over building new pipelines to carry oil and natural gas through the densely populated Northeast has receded. But that will last only as long as the low prices. Still the struggle simmers – between energy companies, shipper and refiners, environmental activists and suburban towns that lie between American energy sources and seaports.
New Jersey’s Bayway Refinery, a monument to industrial might alongside I-95, once operated by Sun Oil, Exxon and now Phillips 66, is a magnet for Bakken Formation crude oil from North Dakota.
Phillips depends heavily on train transport, and could invest in a North Dakota-to-Illinois pipeline project that would bring more Bakken crude to its Linden, N.J., refinery, and from there by tanker and barge to Texas – if future export markets develop, given Congress and the Obama administration’s December bargain to lift the 40-year-ban on American oil exports.
In the meantime, political maneuvering continues over the Pilgrim Pipeline, a 178-mile link proposed from Albany, N.Y. to the Bayway refinery. Local governments, with limited jurisdiction over federal and state regulation of pipelines, are throwing out what obstacles they can.
With oil tank trains to Bayway likewise opposed by towns along the routes, carrying crude by barge down the Hudson River from Albany looked like a way to elude local opponents. But now Global Partners LP, Waltham, Mass., which delivers crude for Phillips 66, faces a lawsuit from environmental groups challenging the company’s permit from New York state officials to transfer crude from trains to barges at its Albany terminal.
Meanwhile, in Maine, for the Portland Pipe Line Corp., the global glut and depressed prices for oil could threaten the company’s survival if it’s not allowed to reverse flow in its 236-mile South Portland-to-Montreal pipeline, company lawyers recently argued in federal court.
The pipeline company filed suit a year ago to overturn a South Portland city ordinance banning the loading of crude onto tankers at Portland Pipe Line’s terminal. The ordinance was nominally about local concerns over emissions from the terminal. With its parent company in Quebec, Portland Pipe Line operates a pair of 18- and 24-inch pipelines between its South Portland facility of 23 tanks with a 3.5-million-bbl. capacity, and a Montreal tank farm.
But as with the Hudson River barge transfers, national environmental groups see the South Portland case as having bigger strategic potential in their movement to contain oil exports and Canadian tar sands development.
