SOUTH PORTLAND, Maine — The American Petroleum Institute last week sent a letter to the South Portland City Council to warn that a proposed moratorium on the importation of oil sands would spur legal challenges if enacted.

The five-page letter argues that the moratorium would violate state law, federal law and the U.S. Constitution.

South Portland Mayor and City Councilor Jerry Jalbert confirmed to the Bangor Daily News that council members received the letter last week. Jalbert said the letter was similar to one the City Council received from the API prior to the first reading of the moratorium.

The South Portland City Council is currently considering a proposed 180-day moratorium that would ban “development proposals involving the loading of unrefined oil sands onto marine tank vessels docking in South Portland.”

The moratorium, drafted by city attorney Sally Daggett, was reviewed by the City Council on Nov. 6, the day after voters narrowly defeated a waterfront protection ordinance that proposed similar restraints on development that could be perceived as related to the delivery of oil sand crude, also know as tar sands.

In the letter, API, a national organization that represents businesses in the oil and gas industries, called the moratorium “ill-advised, unnecessary and unsupported.”

The letter also claimed the proposed 180-day moratorium would discriminate against API members and, if enacted, would “face strong legal challenges and would be found invalid under state and federal law.” The API claims the moratorium would violate the Commerce Clause of the U.S. Constitution, which prohibits states and municipalities from discriminating against or unduly burdening interstate commerce.

“The Moratorium discriminates against interstate commerce by banning — perhaps indefinitely — the handling and transport of oils [sic] sands products that come exclusively from out-of-state sources, while allowing the transport and handling of other petroleum products,” the letter says.

Sabrina Fang, a spokeswoman for API, confirmed that the organization sent the letter. Asked to elaborate on whether the API itself was prepared to sue the city if the moratorium was approved, Fang wouldn’t comment.

“If you’re asking me for a definite answer, that would be speculating. I can’t do that,” she said. “I would say the letter is pretty clear.”

The fight over tar sands in South Portland revolves around Portland Pipe Line Corp., which owns a 236-mile pipeline that runs from Montreal to South Portland. Currently, the company uses the pipeline to carry crude oil unloaded from ships on South Portland’s waterfront to refineries in the Montreal area. But the company has expressed interest in possibly reversing the flow of the pipeline to carry oil sands, referred to as tar sands though it does not contain tar, from Canada to South Portland.

The waterfront protection ordinance would have prevented any developments on the city’s waterfront to allow the loading of oil sands onto ships in South Portland harbor, but it was defeated at the polls Nov. 5. Many people and the oil-related businesses in the city expressed concern that the ordinance was too broad and would yield unintended consequences for waterfront businesses.

The moratorium is designed to give the City Council time to draft a new ordinance that would reflect concerns that opponents of tar sands have about its environmental impact and potential health implications for South Portland residents.

Jalbert acknowledged that voters defeated the WPO at the polls but doesn’t believe the proposed moratorium circumvents the will of the people. He said the overwhelming response he’s received from voters since Nov. 5 has been like, “OK, we listened to what was said, the WPO was too broad, and now what are you as the South Portland City Council going to do to regulate what is perceived as a hazardous oil product in comparison to other oil products?”

The planning board on Dec. 3 found the moratorium consistent with the city’s comprehensive plan and sent it back to the City Council for final action.

The council is scheduled to hold a workshop on the proposed 180-day moratorium Wednesday night, ahead of the second reading and final vote scheduled for Dec. 16. To approve the moratorium at that meeting, at least five council members will need to vote for it.

If approved, it would be retroactive to Nov. 6, the day after voters rejected the waterfront protection ordinance.

At the first reading, the council voted 6-1 in favor of moving forward with the proposal.

“I haven’t seen anything that would change that level of support,” Jalbert said. “But we don’t have a crystal ball.”

Jalbert said API’s letter does cause him to think about the implications of his actions and that of the council, “but for an experienced council like South Portland has, it’s not intimidating.”

Whit Richardson

Whit Richardson is Business Editor at the Bangor Daily News. He blogs about Maine business, entrepreneurs and the economy.