Construction continues at the Zenith Terminals site in Northwest Portland in early February, 2019.

Construction continues at the Zenith Terminals site in Northwest Portland in early February, 2019.

Tony Schick/OPB

Zenith Energy is threatening legal action if the city of Portland doesn’t approve its request to install new pipes at its oil terminal in the northwest industrial area.

The company sent a letter Thursday to the City of Portland’s Office of Community Technology saying the city has no basis for denying its request and that the denial violates its franchise agreement. If the city doesn’t approve its request by Oct. 31, the letter said, Zenith is prepared to take legal action to protect its franchise rights.

Last week, the Office of Community Technology sent a letter denying Zenith the permit it would need to install three new pipes underneath NW Front Avenue.

The city referenced its resolution banning the expansion of fossil fuel infrastructure as a key reason for denying the company’s proposal.

Zenith’s attorney argued in the letter that because the new pipes are intended to be used for renewable fuel and a liquid intermediate known as MDI, its proposal does not violate the city’s resolution against fossil fuel infrastructure.

“As you are no doubt aware, biodiesel, renewable diesel and MDI are not fossil fuels,” Martin wrote. “These pipes will not be placed into fossil fuel service….Accordingly, the OCT’s denial is not based on any relevant facts or meritorious legal arguments.”

In a letter sent to Zenith last week, Elisabeth Perez, interim director of the city’s Office of Community Technology, wrote that the company had acknowledged the new pipes would be “physically capable of transporting fossil fuels” and that her office is “not prepared or equipped” to monitor and inspect the pipes to make sure they’re not carrying fossil fuels.

In its response letter, Zenith shot back that the city is explicitly responsible for monitoring its franchise facilities and if it doesn’t have the ability to do that, “it is incumbent on the city to remedy that deficiency.”

“A pipe is simply a pipe,” he wrote. “The mere fact that a pipe is ‘physically capable’ of being used to transport multiple substances provides no basis for OCT’s denial.”

Martin went on to argue that the city “has twisted” its fossil fuel resolution in denying a request to build renewable fuel infrastructure and that now it will have to deny all similar requests so that no one will be able to develop renewable fuel infrastructure that crosses city property.

“We are frankly surprised that OCT, which falls under Mayor (Ted) Wheeler’s oversight, lacks the ability to fully monitor franchise compliance and never inspects any franchise facilities,” Martin wrote. “Zenith is prepared to commence action against the city to protect the rights granted by the City Council through the franchise agreement.”

Zenith currently receives crude oil from trains and stores it in tanks at its terminal, and it is in the process of adding to its capacity to unload rail cars. It uses existing pipes to transport the oil to outgoing ships.

The city’s rejection of the company’s proposal to transport renewable fuel is a victory for opponents of the Zenith project, who are hoping the city will use its authority to shut down Zenith’s crude oil operations. They say the oil trains delivering crude oil to the Zenith facility pose too many safety and environmental risks in addition to their contributions to climate change.