Shrinking fund leaves Maine vulnerable to an oil spill accident

Thu Jul 11, 2013 9:47am EDT
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By Dave Sherwood

AUGUSTA, Maine (Reuters) - A steep decline in revenues from pipeline tariffs and a loophole that allowed companies shipping crude by rail to avoid payment have slashed Maine's oil-spill fund to levels experts say could hurt its ability to respond to an accident.

Focus on the safety issue has intensified in the wake of the deadly Lac-Megantic disaster in Quebec. Maine's emergency fund has shrunk more than 40 percent over nine years. Surging train shipments, meanwhile, are making the state one of the biggest conduits of crude produced from U.S. shale to Canada.

According to Maine Department of Environmental Protection figures obtained by Reuters, revenues of the Maine Coastal and Inland Surface Oil Clean-up Fund have dropped from $6.7 million in 2003 to $3.7 million in 2012.

The fund collects a 3 cent per barrel transit tax on crude oil and refined petroleum products. Expenditures from the fund have exceeded revenues in four of the past five years.

In addition, one of Maine's two primary oil-by-rail transporters, Pan Am Railways, stopped paying any fees into the fund in April, according to Maine DEP records.

The company has declined to comment on why it halted payments.

"We are investigating the matter thoroughly and if necessary will take appropriate enforcement action," said Logan on Wednesday.

Montreal Maine & Atlantic, owner of the line on which the Quebec derailment occurred, has continued to pay the tariff. But by December 2012, the fund's balance dropped to $1.9 million, less than a third of the $6 million cap set by law and a level that raised concerns from some members of the committee that helps oversee the fund.   Continued...