Oregon’s Land Use Board of Appeals (LUBA) will uphold the city of Portland’s decision to deny Zenith Energy an operational permit as long as the city can provide additional evidence on why the operations of the oil transportation facility conflict with Portland’s environmental goals.

The board’s Thursday ruling did not give the city a deadline for when it must submit this additional evidence and reasoning. Zenith’s Northwest Portland facility will continue to operate while the legal battle unfolds.

“This decision sends a clear message that cities and counties are not powerless in the face of expanding fossil fuel projects,” said Erin Saylor, a lawyer with environmental group Columbia Riverkeeper that assisted the city in its appeal. We applaud the City of Portland for taking a stand against Zenith’s dangerous and dirty operation, and celebrate LUBA’s affirmation of the City’s legal right to take that stand.”

Zenith’s facility stores oil that arrives by train and ships it out from a dock in Northwest Portland’s industrial zone on the Willamette River. The facility has been under scrutiny from city officials and environmental activists for years. Portland City Council banned the expansion of fossil fuel infrastructure in Portland in 2016, but Zenith has still been able to increase the amount of oil it ships out of its Portland facility for years because the facility owners applied for construction permits prior to the ban. Zenith has quietly increased its crude oil imports since 2017 while telling city officials it was phasing out oil transportation in favor of diesel distribution.

The city was finally given an opportunity to interfere with the facility in 2012, when the oil transport facility was required to renew its air permit with the Oregon Department of Environmental Quality (DEQ). Zenith’s predecessor applied to renew its air permit—a permit that allows Zenith to legally operate—before the 2016 ban but, because of a severe backlog, the DEQ didn’t start processing the request until early 2021. As part of the renewal process, the DEQ required Zenith to first get a city-approved Land Use Compatibility Statement (LUCS)—a form determining whether a facility’s operations are consistent with local government’s land use regulations—before the DEQ would renew the facility’s air permit.

In August, the city determined that Zenith’s operations were in conflict with Portland’s 2035 Comprehensive Plan, which sets a goal of reducing city carbon emissions by 80 percent by 2050. Citing the conflict with its 2035 plan and climate goals, Portland denied the LUCS, triggering the DEQ to deny the air permit renewal. While environmentalists were celebrating the city’s decision, Zenith promptly appealed the denial to LUBA, claiming that the city was holding Zenith to the city’s current standards, not the more relaxed standards that the facility applied under years ago.

LUBA affirmed the city’s legal right to deny Zenith the LUCS in its Thursday ruling, with a request for the city to provide more specific information on how Zenith’s operations conflict with the city’s 2035 Comprehensive Plan. In the city’s argument against Zenith’s appeal, it pointed to parts of the 2035 plan that listed Portland’s climate goals but didn’t specifically explain how Zenith’s transportation of oil was in opposition to those goals. Thursday’s LUBA decision gives the city a second chance to better explain its reasoning.

“In order for the city to determine that [Zenith’s] use or activity is not compatible with the 2035 Plan, it must conclude that the use or activity is “not allowed under” the 2035 Plan,” the decision reads. The board explains that the city can point to both prohibitory and aspiration language in the 2035 Comprehensive Plan as evidence that Zenith’s oil operations are in conflict with the plan.

Zenith's West coast vice president Andrea Simpson said the company is "pleased that the Land Use Board of Appeals concluded that the City of Portland failed to satisfy Oregon law," referring to the board requiring Portland to further prove its argument.

Zenith has stated that it intends to transition to transporting biofuels at its Portland facility. Simpson argues that because biofuels emit less carbon emissions than fossil fuels, Zenith's planned operations are in line with the city's climate goals.

Correction: An earlier version of this story referred to LUBA as a "court." LUBA is a board that hears appeals of land-use decisions, not a court. The Mercury regrets the error.