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The Economic Implications of Banning Tar Sands Oil
09/23/2013   Reported By: Susan Sharon

An economic analysis of the proposed Waterfront Protection Ordinance in South Portland suggests the impact could be devastating for the city, the region and the state of Maine if approved by local voters in November.

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Implications of Banning Tar Sands Oil Listen
 Duration:
3:56

The report finds that wholesale distribution of petroleum products in southern Maine would be disrupted, costing several thousand jobs, increasing energy prices and resulting in the loss of million of dollars in local and state taxes. The economic analysis was prepared for the Maine Energy Marketers Association by Dr. Charles Lawton, the chief economist at Planning Decisions, a Maine research and planning firm. Flanked by more than a hundred members of the Working Waterfront Coalition at a news conference in South Portland, Lawton said he was asked to begin his work with one question in mind. What would be the impact of closing the Sprague energy terminal in South Portland? The answer: loss of $84 million in taxable property, $1.4 million in local taxes and 85 jobs, just for starters.

"To me the analogy is if you replace the Walmart Distribution Center in Auburn or if you replace the Hannaford Distribution Center down the road," Lawton said. "What happens when you can't have a wholesale distribution you end up having people having go to the manufacturer to drive by truck to the consumer?"

The Sprague terminal handles 24 million barrels of petroleum products every year. That includes gasoline, heating oil, diesel fuel and jet fuel for the Jetport. Opponents of the ordinance said that if its approved, they will not be able to expand, make enhancements or take new types of products within 250 feet of the shore. That includes Spraque's pier where the company has just announced that it is postponing a 1.5 million dollar project to replace pipelines to its dock until after the November vote.

"The way the ordinance was written it absolutely is a wholesale attack on the petroleum industry, quite clearly," said Burton Russell, Sprague's vice president of operations.

"It doesn't single out any particular fuel," he said. "It talks about all petroleum distribution and that impact is wide ranging and far spread."

Russell said that's because the South Portland terminals provide petroleum products to southern Maine and beyond. According to the economic report, in 2011 oil tankers accounted for 84% of all the cargo vessels arriving and leaving the Port of Portland, the 41st largest port by volume in the country. If those tankers are unable to offload their products in South Portland, opponents said trucks departing Boston from will have to make up the difference. There will be a ripple effect throughout the economy. And Jamie Py of the Maine Energy Marketers Association said that will increase costs for all Maine consumers.

"I made a very rough back of the envelope calculation," Py said.

Py said it would easily cost a Maine family $300 more a year for petroleum products.

"I am talking about the increase in transportation costs to put a thousand trucks on the road to replace every ship that comes into the harbor and have those trucks running up from Boston to Maine." said Py.

In his analysis, Dr. Lawton projects that Maine would gain about 400 jobs in the trucking transport industry over the next ten years. But he finds that, overall, Maine would lose approximately 5,600 jobs which would translate into more than $250 million in lost earnings and $18 million to state government. Rob Sellin Questions the Findings.

"My initial reaction to the report is that it does contain facts but the conclusions are based on a false premise," said Sellin.

Sellin is a resident of South Portland and the community outreach coordinator for the group Protect South Portland which is backing the Waterfront Protection Ordinance. Sellon said the zoning measure is intended to protect the community from the possible importation of dirty tar sands oil not to shut down existing businesses.

"Basically, all marinas, all yacht operations, all petroleum businesses and non petroleum businesses can continue as they currently are," he said.

Sellin said all the ordinance will do is create a 250-foot shoreland protection zone which will require review of new waterfront projects going forward.

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