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Quebec Disaster Puts Spotlight on Maine's Shrinking Oil Clean-Up Fund
07/11/2013   Reported By: Jay Field

The fiery derailment of an oil tanker train in Quebec last weekend has raised questions about how prepared Maine would be should a similar explosion or spill happen here. Maine, it turns out, actually has a fund, administered by the Department of Environmental Protection, that's supposed to pay for clean-up costs in the event of an accident. But in recent years, the fund has seen its balance decline, even as shipments of oil by rail have surged, raising questions about whether Maine will have the resources to respond to a spill. Jay Field has more.

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Maine's Shrinking Oil Clean-Up Fund Under Scrutiny Listen
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Here's how it works: Companies that transport crude or refined oil through the state of Maine have to pay a 3-cent tariff on every barrel they ship. The law that created the oil spill fund capped the amount of money it could collect at $6 million. But by the end of last year, the fund's balence had dropped below $2 million.

"The fact that it's dropped is not unexpected. We knew that that was going to happen," says Casco Baykeeper Joe Payne, a member of the state's oil spill advisory committee.

Payne says the amount of oil being shipped by the fund's biggest contributor, The Portland-Montreal pipeline, has dropped off steadily since 2005. "Part of that was because one of the refineries that the pipeline feeds closed," he says. "The worldwide trade in oil shifted."

It shifted thanks, in large part, to the shale oil boom in places like the Bakken fields of North Dakota. It's now cheaper for Canada's east coast refineries to ship this oil in by train, rather than buy large amounts of crude from overseas. But Payne says the surge in shipments through Maine, by rail, won't provide enough money to the oil spill fund to make up for the sharp drop in pipeline revenue.

"I think it's from this point forward that it gets alarming," Payne says. "There are expenses every single month because the fund pays for the group - the cadre of oil spill professionals at the DEP - who are always ready. They're trained. They have trucks with equipment. They're always going to be on site at an oil spill."

This spring, the Legislature closed a loophole in state law that had allowed rail companies to avoid paying into the oil spill fund. Rep. Ryan Tipping-Spitz, an Orono Democrat, proposed an additional measure that would have added an extra one-and-a-half cent tariff on crude shipments, when the balance of the spill fund drops below $2 million.

The Legislature rejected the bill. Tipping-Spitz says the Quebec tragedy only reinforces why lawmakers should have passed it instead.

"I was talking to someone who worked on the rails, for years, today in the hardware store. And he was talking about how bad the rail lines are," Tipping-Spitz says. "These derailments show that this is not a safe way to transport this material. There's no perfectly safe way to transport this material, but we should be making sure that we're prepared to deal with this kind of event."

The Maine Department of Environmental Protection testified against the additional tariff at the public hearing on the bill in Augusta. Jesse Logan, communications director at DEP, says Mainers should still be confident that their government will have the resources to respond in the event of an oil spill or accident.

"The fund is sufficient right now," Logan says. "The Department of Environmental Protection has improved management and reduced expenses of the surface oil cleanup fund. We have instituted a more aggressive cost recovery mechanism, which ensures that the responsible party is one that pays for the cleanup."

Logan says the department is open to revisiting tariffs, if it determines that existing revenues can no longer support the spill fund's activities. But she adds that over the past 10 years, the Legislature has transferred nearly $1 million from the fund to the state's general coffers.



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