Oil refiner agreed to resume normal operations if TransCanada resumes Oregon pipeline work

SPOKANE, Wash. — The Florida-based petroleum company has agreed to resume normal operations at the terminal as soon as it resumes full shipments to the Portland, Ore., region in the next 30 days, an attorney for Parkland Refining told a federal judge in Spokane on Tuesday.

Parkland, which operates two 18-million-barrel-per-day refineries in the Oregon and Washington midwest, was asked to temporarily pause operations at its Inland Refinery due to TransCanada’s shutdown of its proposed $8 billion pipeline project to transport crude oil from Alberta, Canada, to a U.S. oil terminal in Burnaby, British Columbia. TransCanada is waiting on U.S. and Canadian government approvals for the project.

Eric Moulton, a Seattle attorney representing Parkland, asked U.S. District Judge Marsha Pechman to allow the company to run its runs to Spokane and Tacoma, Wash., until officials in Alberta are satisfied that a new TransCanada pipeline can run through the project’s route without interfering with operations at the Inland Refinery.

The companies came to the deal so they could “avoid uncertainty, I don’t think, the prudent course of action,” Moulton said.

The petroleum company is owned by Florida-based Parkland Chemical, and while headquartered in Tampa, Parkland has extensive operations across the country, including the import and export of refined products from its refineries.

Pechman agreed to allow Parkland to continue operations for 30 days while still operating the refinery.

Moulton argued that the refiner’s effect on nearby communities is very small, and the pipeline that will run through the planned route for the Trans Mountain pipeline construction, and not the Inland Refinery, is more important in terms of the project’s economic and health impacts.

University of Washington Law School professor Margaret Darragh, an expert on trade and environmental law, testified that she has seen a number of cases involving the United States government forcing an entity to temporarily suspend its operations due to a dispute. In those cases, there is a blanket federal suspension of activity, while cases where the U.S. government directly proposes a stop to an operation typically involve specific state actions.

Darragh said a nation-wide suspension that keeps the entire refinery shut down for 30 days would have wider effects than in state-level actions.

In many cases, those cases have focused on business partnerships like Canadian lumber producers that have relationships with a pipeline that allows for their products to flow from Canada to the United States without impacting timber jobs. In other cases, governments have invoked the concept of “negative externalities” – or the cost to the general population of a company’s activity in which government regulations are waived in return for a benefit to some private, non-public sector or state group.

“Companies don’t generally donate trade benefits in exchange for government liability,” Darragh said.

Still, Darragh said federal court cases do appear to involve the scope of a company’s activities.

Daniel Zingale, an attorney with the U.S. Department of Justice’s Environmental and Natural Resources Division, which is helping defend TransCanada in Trans Mountain, noted that Parkland Refining typically ships heavy Canadian crude oil to Portland, while TransCanada was planning to ship light oil to the United States.

The companies aren’t the only ones that have been asked to pull back from some of their operations as Trans Mountain has been suspended. The Seattle oil terminal previously requested an emergency discharge permit for sulfur dioxide emissions it began generating after Trans Mountain stopped delivering heavy Canadian crude oil to the terminal.

In the case of Inland Refining, “We’d like to send a message to those in Canada that are still waiting” on the pipeline, Parkland attorney Darragh said.

The trial had been set to begin on Tuesday. The judge delayed it for three weeks to give TransCanada time to revise the route for the pipeline, which is several miles short of the oil terminal’s dock and its land.

This article was written by Mary T. Schmich, a reporter for The Washington Post.

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