For the first time, the city of Portland is formally pushing back against Zenith Energy, the owner of an oil train terminal in Northwest Portland that has drawn the recent ire of local environmental activists. Last week, the city denied Zenith's proposal to build three new underground pipes to expand the company's ability to transport fossil fuel through Portland.
Dan Serres, the conservation director for the environmental protection organization Columbia Riverkeeper, told the Mercury that OCT’s decision could “really mark a turning point” in how the city interacts with Zenith.
“It’s really the first time the city has said ‘no’ to Zenith,” Serres said. He added that the permit denial shows Zenith is “not going to be able to simply expand and expand.”
The permit denial comes from the Office of Community Technology (OCT), the office responsible for overseeing the city’s franchise agreements, which state the land use and right-of-way terms between the city and different utility organizations. The denial was first reported by Willamette Week.
This may be the city’s first official action taken to oppose Zenith, but that doesn’t mean city leaders have been rolling out the red carpet for the Houston-based energy company before now. Since it was revealed in February that Zenith was moving to expand its crude oil train terminal on NW Front, Mayor Ted Wheeler and other city commissioners have expressed their personal opposition to Zenith’s presence in Portland, but said they are unsure what can be legally done about it. Portland City Council passed a ban on new infrastructure to transport fossil fuels (like crude oil) in 2016—but because Zenith had obtained a permit for expansion before that ban was passed, its plans were grandfathered in under the old standards.
The need to eradicate Zenith has become a recent rallying cry for different environmental groups in Portland, including the youth behind September's climate strike.
The city has reportedly been exploring its options for resisting Zenith, and the company’s request to build three new underground pipes—a request that was not a part of Zenith’s original expansion plans—appears to have given the city legitimate legal grounds to push back.
“Without having a better sense of how Zenith operates its whole facility, it seems extremely likely that what they’re doing is just adding more pipe capacity as a whole."
In an October 18 letter notifying Zenith of its permit denial, OCT Interim Director Elisabeth Perez laid out several reasons for the city’s decision. One of them was that Zenith’s request went outside of the scope of the original franchise agreement, allowing Portland’s 2016 fossil fuel infrastructure ban to kick in.
In its permit request, Zenith told OCT that the pipes would be used to transport a potentially harmful chemical known as MDI and biodiesel. That would mean the pipes technically wouldn’t be used to transport fossil fuel, but Serres said the move would likely free up Zenith’s existing infrastructure to take on more fossil fuel. And considering Zenith has been misleading in past communications with the city, he said, Portland shouldn’t take its word about what the pipes will be used for.
“Without having a better sense of how Zenith operates its whole facility, it seems extremely likely that what they’re doing is just adding more pipe capacity as a whole,” Serres said.
Perhaps recognizing that the city would be inherently skeptical of any new permit requests, Zenith offered to “allow City inspectors access to the facility at all reasonable times” in its permit request. Perez rejected that premise, writing that “OCT is not prepared or equipped to take on the monitoring and inspection responsibilities proposed by Zenith’s condition.”
Perez also pointed out that Zenith has not held up the terms of its existing agreement with the city.
“Zenith is more than five months overdue on its May 15, 2019, payment of franchise fees for the 2018 calendar year,” Perez wrote. “Zenith has also failed to file the written report calculating those fees required to be submitted with its payment. … If OCT cannot rely on Zenith to make its franchise fee payment on time, and file the required report on time, then OCT also cannot rely on Zenith’s promise in its proposed condition to file annual reports about the products transported in the pipes.”
In a Tuesday press release, Wheeler said he supported OCT’s permit denial.
“Portland’s commitment to be a climate leader nationally and globally requires a rapid transition away from fossil fuels to cleaner, renewable fuels and electrification of our transportation sector,” Wheeler said in the release.
"This is only possible because of the months and months of labor that local activists put in," tweeted Sunrise PDX, a local youth environmental group that helped organize the Portland climate strike, about the permit denial. "A huge thank you to everyone involved in this fight.
What comes next is unclear. Zenith could appeal OCT’s decision before City Council, or take legal action against the city. Serres said that because Portland is geographically situated to be the most convenient route for transporting crude oil through the Pacific Northwest, he doesn’t expect Zenith to stop trying to expand its facilities. And despite recent state legislative progress on the issue, Serres said Oregon still has weaker environmental protections around oil trains than neighboring Washington and California, giving Zenith another reason to continue holding on to its Portland facility.
While this permit denial marks an important milestone in the city’s relationship with Zenith, environmental groups hope it's just the beginning of a broader crackdown.
“We would love to see the city take a much more comprehensive approach trying to ratchet [Zenith] back,” Serres said. “[But] the city has been moving pretty carefully … it’s not easy to unravel what has been previously authorized.”