Company drops plans to ship crude oil through Baltimore

State had demanded more information on proposal

Houston energy company Targa Resources has withdrawn controversial plans to ship crude oil through a port terminal in Baltimore.

The company said in a letter to state environmental officials that it is dropping a permit application to build crude oil storage and loading operations at a facility it operates in Fairfield.

The project had been in limbo for more than a year, after the Maryland Department of the Environment told Targa officials last June it would not approve the company’s plans unless it provided more information about them. The company never provided the information, a department spokesman said.

Environmental and neighborhood groups opposed the project because they feared it could lead to oil spills, like those that have occurred after train derailments in Illinois, West Virginia, Virginia and Oregon in recent years.

Amid the opposition, the energy industry also is facing the economic challenges of depressed oil prices. Crude oil prices have fallen by more than half since Targa first proposed its plans in 2014, trading at

less than $50 per barrel for the past year.

Targa officials did not respond to a request for comment. The company previously said the project would have created about 10 jobs at its facility, where it operates fuel oil and asphalt businesses.

Jon Kenney, an organizer with the Chesapeake Climate Action Network, called the company’s decision “a victory for Baltimore communities and for the climate.”

Since the early 2000s, drilling technology and the extraction process known as fracking have created a boom in U.S. oil production, particularly from the Bakken rock formation in North Dakota. Trains carry the oil to refineries mostly on the East Coast, with cross-country shipments jumping from 55,000 barrels per day in 2010 to more than 1 million barrels per day in 2014, according to the U.S. Energy Information Administration.

That year, Targa applied to the Maryland Department of the Environment for an air emissions permit and permission to add storage capacity for at least 12.6 million gallons of crude oil at its facility on Chesapeake Avenue in the city’s Fairfield neighborhood. It planned to bring in crude oil by train and send it out by barge to refineries.

But since then, a surge in the domestic oil supply and changing global economic conditions have slimmed potential profits for companies like Targa.

Rail movements of crude oil across the country have declined dramatically. In April, trains carried 147,000 barrels of crude oil per day from the region of the country that includes North Dakota to the East Coast, down from 440,000 barrels per day a year earlier, according to the administration.

In the meantime, environmental and community groups have pointed to disasters involving Bakken crude oil that they feared could occur in Baltimore.

At least seven trains carrying Bakken oil derailed last year, causing explosions and fires, prompting evacuations and leaking tens of thousands of gallons of oil. Last month, a train derailed near Mosier, Ore., causing a massive explosion. The U.S. energy and transportation departments are studying whether the Bakken oil is more volatile than other types of crude oil.

The most serious accident involving Bakken oil occurred in Lac-Megantic, Quebec, in July 2013. A derailment there caused a massive explosion that destroyed much of the town’s center and killed 47 people.

Environmental groups said even without Targa’s facility being constructed, they are concerned about crude oil moving through Baltimore. The Chesapeake Climate Action Network called for city officials to do more to protect the environment and public health from oil spills.

“We know there are still thousands of gallons of crude oil rolling through Baltimore every week, putting communities in danger,” Kenney said in a statement. “As a next step, the City Council must act on legislation requiring health and safety studies of oil trains.”

Axeon Specialty Products, a San Antonio-based asphalt refining company, brings crude to the Patapsco River terminal of NuStar Energy, near Targa’s operations. Other crude oil cargo passes through the state, but officials don’t know how much because it is not unloaded here.

City Councilman Edward Reisinger, who represents the Fairfield neighborhood, said he thinks companies should not be given “carte blanche” to bring oil shipments through Baltimore. In response to concerns from the community, the Democrat last year called for a City Council hearing on the issue, but he said Monday he has not heard from constituents about it recently.

“I have to talk to all the players and see what their concerns or issues are and see if there’s any solution,” Reisinger said.

A spokesman for Mayor Stephanie Rawlings-Blake declined to comment on Targa’s decision.