Tank cars on train tracks. A placard warns about the risks of toxic inhalation.

An OPB file photo of tank cars on the train tracks outside of the Zenith Energy oil terminal in Portland. The city dealt a blow to Zenith's expansion plans on Friday.

Tony Schick / OPB

The city of Portland dealt a big blow Friday to an oil-by-rail operation when it denied an essential certification for Zenith Energy’s controversial Northwest Portland oil terminal.

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The Portland Bureau of Development Services denied a land use compatibility statement, or LUCS, which Zenith needed to renew its air quality permit with the Oregon Department of Environmental Quality. The Texas-based company’s Portland oil terminal receives crude oil and renewable fuels from trains, stores it in tanks and sends it through pipes to outgoing ships. The company has said it plans to expand its transloading and shipping of renewable fuels. But it was the shipping of fossil fuels that factored in Friday’s decision.

“The journey to this decision was essential — building the appropriate foundation of understanding, consensus, and the need to consult with tribal governments in the region,” Bureau of Development Services Commissioner Dan Ryan said in an emailed statement. “We know that the activities carried out at this site, and the fossil fuel products being transported, have the potential to directly impact tribal territories, cultural resources, and tribal treaty rights.”

A photo taken at the Zenith Energy oil terminal in Northwest Portland in May 2020.

A photo taken at the Zenith Energy oil terminal in Northwest Portland in May 2020.

Courtesy of Columbia Riverkeeper

Ryan, who oversees the bureau, said the decision reconfirms the city’s commitment to address climate change and reduce the city’s dependence on fossil fuels.

Zenith said it plans to appeal the city’s decision.

“We are confident that our operations are compliant with current zoning codes and the City’s comprehensive plan,” W. Grady Reamer, a vice president with the Texas-based company, said in a statement.

The compatibility statement amounts to a local-government certification that the Oregon Department of Environmental Quality requires to determine whether a company’s plans are consistent with city or county comprehensive plans and land use regulations. Zenith needed the LUCS in order to renew an air quality permit with DEQ.

In a statement, the company said it was disappointed in the city’s decision, given that its plan to transition to renewable energy is aligned with the city’s 2035 comprehensive plan.

“Contrary to recent reporting, Zenith is seeking to continue modernizing our Terminal, not to increase its capacity. We want to further increase renewable fuels at the expense of fossil fuels,” said Reamer, who oversees the company’s U.S. operations.

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Zenith had announced on Thursday a nearly three-fold increase in the amount of renewable diesel handled and stored at the facility. It also projected that renewable fuels will constitute nearly half of the facility’s capacity by 2026.

The city’s decision to not issue the certificate Zenith sought leaves it unclear whether the company will be able to get all the permits it needs to continue operating its oil by rail facility in the future. Zenith has been seeking to renew the operating permits it inherited from the previous owner, which used the facility for asphalt. Zenith acquired the facility in 2017. Since then, it was operating under an expired air quality permit.

But a decision made a year earlier by Portland’s city council to ban the expansion of new fossil fuel infrastructure — a position reconfirmed by the council in 2019 — complicated things for Zenith. Zenith has argued since air quality permit renewal application was submitted before the ban, it is not subject to city’s ban on expanding fossil-fuel infrastructure.

DEQ Communications Manager Harry Esteve said the agency will review the city’s decision before determining what effect it may have on DEQ’s decision on the renewal of the air quality permit and a separate, pending application for a stormwater permit for construction at the site.

The city bureau’s decision gave environmentalists, community advocates and dozens of elected officials reason to celebrate. All five Multnomah County commissioners and more than 20 Oregon state legislators had publicly called on the Bureau of Development Services and the commissioner overseeing it, Dan Ryan, to deny Zenith the certification it needed to expand. In a letter to Ryan and the bureau, the legislators contended that a crude oil train derailment or tank spill would be catastrophic for the communities they represent. Approval of the certification would also be inconsistent with the city’s land-use goals and climate commitments, they said.

Texas-owned Zenith operates its Portland facility in a part of the Northwest industrial area known as the Critical Energy Infrastructure hub — dubbed the city’s tank farms. The six-mile stretch along the Willamette River contains 90% of Oregon’s fuel supplies. And it’s on a bank of the Willamette where the risk of liquefaction, fuel spills and disasters are well-documented, should a large earthquake occur.

Related: Quake could threaten 90% of Oregon's fuel supply

One of the legislative letter’s authors, Rep. Khanh Pham, D-Portland, praised Friday’s decision.

“Credit goes to the hard work of advocates and community members who would not give up on Portland’s commitment to climate justice,” she said. “The ruling on Zenith Energy is not only a right step for Portland’s climate commitments. It also represents an example of bold action that other cities and counties must take as the climate crisis accelerates.”

Columbia Riverkeeper legal and program director Lauren Goldberg said the city of Portland took a historic stand against an already existing fossil fuel infrastructure. She said the fossil fuel industry is accustomed to receiving rubber-stamp approval for existing fossil fuel terminals and facilities. But she said in the age of climate crises, that is over.

“The rules have changed. It’s not 1990 anymore, it’s not 2000. It’s 2021 and this is not happening anymore,” she said.

Goldberg said her group will look to DEQ to see what the agency will do about the pending air quality permit renewal and monitor if Zenith plans to fight the denial.


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