The Oregon Department of Environmental Quality (DEQ) is threatening to deny a required air quality permit to Zenith Energy—a permit that is essential to keep the oil transport facility operating in Northwest Portland. The denial, which the DEQ proposed Wednesday, could force the long-contested Zenith facility to shut down completely.
The DEQ’s proposed denial of the permit starts a 60 day countdown during which Zenith can request an administrative hearing with the DEQ, where Zenith officials could pose a rebuttal to the pending permit denial. If Zenith doesn’t request a hearing within that window of time, the DEQ’s permit denial becomes official, and any continued operation of the oil transport facility would be out of compliance with state law.
According to DEQ spokesperson Harry Esteve, DEQ has only reversed a permit decision once before. In that case, the administrative law judge overseeing the hearing ruled in favor of the company.
Zenith officials did not immediately respond to the Mercury’s questions on whether they will request a hearing with the DEQ.
The DEQ’s proposed denial of the air permit is just the latest in bureaucratic challenges to Zenith, which transports an estimated 20 million gallons of oil per month via its transport facility along the Willamette River. This news comes a week after the City of Portland denied Zenith’s Land Use Compatibility Statement (LUCS)—a document that determines whether a company’s operations are in compliance with a local government’s land use policies. Zenith filed a notice to appeal the city’s LUCS decision with the Oregon Land Use Board of Appeals on Monday—a strong indication that they will also fight the DEQ’s proposed denial.
The Zenith facility’s previous air quality permit expired in 2012. The facility applied to renew the air permit before it expired, but the DEQ had such a significant backlog of permits to review that the department was only able to address Zenith’s air permit renewal application at the beginning of 2021. The company has been operating under an administratively extended permit for the past nine years while DEQ addressed its backlog of cases.
In January, the DEQ required Zenith to secure a LUCS from the City of Portland before the department made a decision on the air permit. Zenith inherited its previous air quality permit from the company it purchased its Northwest Portland facility from, meaning Portland officials never got the chance to decide whether Zenith’s oil operations were inline with the city’s land use laws.
After intense pressure from environmental activists and county and state legislators, city officials found Zenith’s operations to be in conflict with Portland’s climate goals and denied the LUCS. In a press release announcing the state’s proposed denial of the air permit, the DEQ cited the city’s denial of the LUCS in its reasoning.
“DEQ’s action comes in response to the City of Portland’s determination that the operation is not compatible with the city’s comprehensive land use plan and regulations,” the press release stated. "Under state law, when a local government makes a negative compatibility determination, state agencies generally may not approve permits for the operation.”
For environmental activists, the DEQ’s proposition is another step in the right direction.
“As the City of Portland found in denying Zenith's Land Use Compatibility Statement request, this facility and its oil-by-rail activities pose an immediate and unacceptable risk to residents of Portland and throughout the region,” said Nick Caleb of Breach Collective. “As Zenith has already been fined for illegal construction activities and has made repeated false statements to regulators, any representations the company makes about its current or future operations should be greeted with the utmost scrutiny.”
Earlier this week, the DEQ issued Zenith a $23,598 fine for starting construction on its facility without securing the proper permits. After the city denied the LUCS, Zenith officials also claimed that Zenith would be essential to helping Portland meet its climate goals because the facility planned on increasing its transport of biodiesel.
“It's high time that the [DEQ] take action to close the book on [Zenith’s] dangerous facilities,” Erin Saylor of Columbia Riverkeeper said.
State and county leaders also support the DEQ’s proposed denial of Zenith’s air permit. All four Multnomah County commissioners, county chair Deborah Kafoury, and 20 state representatives sent a letter to the director of the DEQ yesterday, stressing the importance for climate action and urging the denial of the permit.
“The people of our city, county and state are relying on us to work boldly together and we are confident you will maintain our momentum toward this end by denying the permit expeditiously,” the letter stated. “Thank you for your concerted action on behalf of our communities, environment, and the sustainable future of Oregon.”
As DEQ officials await Zenith’s response to the proposed permit denial, the state is entering uncharted waters. If the DEQ officially denies the air permit, it appears Zenith would be the first oil transport facility to be shut down by the state. It’s unclear what the shutdown process would look like.