With clean energy, climate change and sustainability policy measures gaining momentum, and with a diminished demand for crude oil from Canada, South Portland leaders are concerned about the potential costs of cleaning up after the city’s oil industry.

The City Council is thus poised to push the Maine Department of Environmental Protection to continue making a post-closure cost assessment a requirement of any new operating licenses issued to oil terminal facilities within city boundaries.

City Manager Jim Gailey said the state has already imposed such a condition on three of the city’s six oil companies, and he’s asking for council permission to insist the same measures be applied to the other three operators, as well.

The council was scheduled to meet on Wednesday, after the Current’s deadline. In a memo to councilors, Gailey said imposing a post-closure analysis on oil companies is critical to bridging the gap between the actual costs and the $2 million minimum the companies are now required to have on hand for each oil storage tank containing 63,000 gallons or more.

Prior to the meeting, newly elected Mayor Tom Blake told the Current this funding gap “needs to be addressed,” and said it’s an issue that’s been on the mind of city leaders for the past couple years, particularly following passage of a ban on importing so-called tar sands oil in August 2014.

“We have seen many times in American history where companies fold, where they pack up and go leaving the (host community) with a tremendous environmental and financial burden,” Blake said this week.

“We need to be assured that South Portland will not be left with acres of contaminated land. We also know that $2 million” per tank will not be enough to cover the costs, he said.

The six companies operating oil terminal facilities in South Portland include Portland Pipe Line, which is suing the city in federal court, arguing that the ban on tar sands is unconstitutional, as well as a violation of several federal and state statues.

In early May, the city filed a motion to dismiss the lawsuit and requested that the federal court in Portland schedule an oral argument on its contention that the local tar sands ban is legal and well within the city’s rights to impose.

That oral argument has yet to be scheduled, and according to the lawsuit’s docket report, there has been no activity in the case since mid-May.

The other companies operating oil terminals in South Portland are Sprague Energy, Buckeye Development & Logistics, Gulf Oil, Global Companies and Citgo.

The memo Gailey provided to the City Council prior to Wednesday’s meeting states that the Department of Environmental Protection has already asked Portland Pipe Line, Sprague and Citgo to conduct a post-closure cost assessment as part of their license renewals.

According to Gailey, Sprague has until the end of the month to provide the department with its report and Portland Pipe Line has until Jan. 30, 2017, to submit its post-closure assessment.

In his memo to the council, Gailey said that requiring the oil companies operating in the city to determine the actual costs of closure and cleanup was one of the recommendations of the Draft Ordinance Committee, which also created the tar sands ban language.

The post-closure assessment requirement does not seem to be tied to any particular oil company, but in its recommendation to the City Council last year, the Draft Ordinance Committee said, “It is not a question of if, but when closure will occur. These facilities will not be here forever.”

Blake agreed, and said he expects that all the oil companies in South Portland will respond to “this reasonable request.”

However if the oil terminal operators balk at this requirement, Blake and others on the City Council said they would ask South Portland’s state legislators to submit a bill making such a condition state law.

Gailey said the “desired process to handle (these post-closure assessments) would be for a state statute requiring a higher threshold for financial assurance.” But, “the current (political) environment in Augusta may not lend itself to being the right time for this type of action.”

Therefore, the city must rely on the Department of Environmental Protection continuing to be “amenable and willing to accept (the city’s) petitions during the license comment period,” Gailey said.

In recommending that South Portland take action on the gap between the amount of funding required by law and the actual costs for decommissioning, demolition and cleanup, the Draft Ordinance Committee referenced the tragedy in Lac-Megantic, Quebec, when a train carrying a load of crude oil exploded in July 2013, taking lives and destroying property.

“The accident forced the railroad into bankruptcy and virtually all damages and cleanup costs fells on the shoulders of provincial and Canadian taxpayers,” the Draft Ordinance Committee said.

That’s why South Portland “must ask whether (it) should trust private owners or corporate shareholders to step up in the event of an accident and pay 100 percent of the damages,” the committee added.

This week, councilors Linda Cohen, Brad Fox and Eben Rose all told the Current they are also in favor of asking the Department of Environmental Protection to make a post-closure cost assessment part of any re-licensing process.

“With miles of pipeline and tanks covering a lot of square footage, it’s prudent to protect the taxpayers from any (oil) business that might close and leave,” Cohen said.

But she also said that requiring any large landowner whose product could leave behind contamination to have a closeout plan would also be of benefit.

Rose, who took the oath of office on Monday and had taken a leading role in the effort to ban tar-sand oil in the city, said forcing oil companies to make a post-closure cost assessment is “important because we must acknowledge that the global transition away from fossil fuel dependency is happening now.”

That means, he said, that “the fossil fuel storage and transportation infrastructure so dominant in South Portland is increasingly likely to be abandoned. (So), we need to ensure that we, the public taxpayers, are not left covering the cost of cleanup for these private (and profitable) enterprises.”

And, Fox said, “Our residents shouldn’t be held responsible for cleanup costs if the oil companies suddenly go out of business, or declare bankruptcy.”

In addition to addressing the concerns around post-closure costs for oil terminal facilities, on Wednesday the City Council was also scheduled to take up a moratorium and proposed changes to the fire code that would directly impact a plan by NGL Supply Co. to build a liquid propane distribution facility at the Rigby Rail Yard.

Both Fox and Rose are strongly opposed to the project and both have been working with community members to convince the other councilors to support the moratorium and the fire code changes.

Leading up to Wednesday’s meeting, though, it appeared as if the moratorium would fall short of the five-vote supermajority required.

The council was set to discuss the fire code changes at a workshop following the regular meeting.

In a statement sent to the Current this week, NGL wrote:

“Because these (fire code) amendments appear so narrowly drawn as to target our project exclusively, we will actively monitor council deliberations and, should the council enact these amendments as written, reserve the right to pursue all means of redress, including legal action.”

NGL, along with The Forecaster, the Current’s sister publication, have also both submitted Freedom of Information requests to the city to view all of Fox’s emails regarding the NGL project.

The concern is that Fox has used his private email account to discuss the liquid propane facility. This week Fox had no response to the Freedom of Information actions, but did say the fire code amendments he’s championing would “apply to all new projects, including ones that may be brought forward by other companies like Pan Am, which owns Rigby Yard.”

And, he said the fire code amendments are only “meant to strengthen our current ordinances to protect our city from the very real danger of explosions and massive fires that would destroy our infrastructure.”

Several oil companies own tanks in South Portland including these Sprague Energy tanks. The city government is worried that oil companies with operations in the city could abandon their tanks, leaving the cleanup to the municipality or state.The city’s oil tanks are enmeshed in the community fabric of South Portland. Here, South Portland High School graduates walk in the shadow of a few of the dozens of oil holding tanks inside the city limits.