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ASNH says Portland Pipe Line made a "lopsided" agreement with town

March 26, 2014
LANCASTER — A lawyer who is a consultant to one of the state's leading not-for-profit conservation organizations believes that the Town of Lancaster may recently have signed a "lopsided" contract when its town manager signed a memorandum of agreement with the Portland Pipe Line Corporation (PPLC).

The Memorandum of Agreement signed on March 17 by town manager Ed Samson between the Town of Lancaster and the PPLC includes a number of ill-advised conditions to the Town's use of an oil spill response trailer rented by PPLC, according to Sheridan Brown, an attorney working as a legislative coordinator and consultant for the Audubon Society of New Hampshire (ASNH). Sheridan obtained a copy of the document under the state's right to know law.

In addition, Brown pointed out in a series of e-mail exchanges, some of the details of the agreement directly contradict statements made on Feb. 11 by a PPL spokesman in the Legislative Office Building (LOB) lobby to provide background on SB 325, a bill designed to increase the state's preparedness to handle pipeline oil spills.

Senator Jeff Woodburn, a Democrat of Dalton who serves on the Senate Energy and Natural Resources Committee, is the bill's prime sponsor.

Crude oil is currently pumped from Portland, Me., to Montreal, Quebec, through a 24-inch pipeline that runs through Shelburne, Gorham, Randolph, Jefferson, and Lancaster. PPLC — a subsidiary of Exxon-Imperial Oil, Shell Oil, and Suncor — owns this pipeline as well as a more than 60-year-old now-idle 18-inch pipeline alongside it. The company's first pipeline, installed in 1941 to help Canada fight Nazi Germany, is still in the ground but out of service. Pump stations are located in both Lancaster and Shelburne.

PPLC Operations Manager Tom Hardison told legislators at the Feb. 11 informational get-together that his company had arranged to have a spill response trailer "given to" the Town of Lancaster.

In fact, Sheridan pointed out, PPLC has allowed the Town the "use of" a trailer — and then only while requiring the Town to indemnify PPLC against any claims arising from its use. PPLC also disclaims any warranties or representations concerning the equipment's condition, suitability, or fitness for a particular purpose, which, Sheridan says, includes cleaning up oil.

The Town is responsible under the agreement to reimburse PPLC for "any re-stocking, decontamination, inspection or repair services on the Trailer or any Equipment item associated with the Town's use." Sheridan points out that this contradicts Hardison's statement to legislators that "if the responsible party is not able to replenish the consumables used from the trailer, then PPLC has pledged to Lancaster and surrounding towns that we'll go ahead and replenish that…."

Finally, although Hardison represented the agreement as a done deal when he spoke on Feb. 11, the trailer had not yet been delivered to the Town and the Memorandum of Agreement was not signed for another month.

Samson said in a Friday morning interview that he did not consult with the town's attorney before signing the agreement, which the selectmen had a chance to review.

The board of selectmen had voted at its Nov. 4, 2013, to accept the trailer for use by the town's Fire Department and authorized the town manager to execute all necessary paperwork to move the acquisition forward.

Brown pointed out, however: "The very lopsided agreement presented to the Town of Lancaster by PPLC is just further evidence that the pipeline is hardly the 'good neighbor' it calls itself. The fact that PPLC will provide a small amount of equipment to Lancaster only under such onerous terms shows precisely why the state Department of Environmental Services (NHDES) needs the authority to require stronger spill preparedness and response measures. This is what SB325 proposes."

The bill originally included a fee of some $200,000 a year that would be levied on pipelines to defray any cost to the state but that feature was stripped from the bill and it now no longer has any fiscal impact.

The Senate Energy and Natural Resources Committee recommended SB 325 for passage by a vote of 3 to 2 on March 19, and it will now go to the full Senate on tomorrow, Thursday, March 27.

The pipelines' right-of-way (ROW) across New Hampshire roughly parallels Route 2 and includes more than 70 stream and wetland crossings, including the Connecticut and Androscoggin Rivers. A spill anywhere along this route would have a severely negative impact on the North Country's communities, environment, and economy.

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