A massive, earthquake-induced oil spill in Portland’s Northwest industrial zone could cost upwards of $2 billion in damages and clean up costs, a county and city report found. Regional officials are using this new data to build a case for why the oil tank owners should be liable for the costs while state legislators are proposing a bill to mitigate the disaster.
The Critical Energy Infrastructure (CEI) Hub is a six mile tank farm located alongside the Willamette River in Northwest Portland. The Hub’s 630 tanks hold over 150 different materials, including gasoline, jet fuel, and diesel, and are owned by 10 different energy companies. The CEI Hub can store at least 350 million gallons of fuel at any time and supplies over 90 percent of Oregon’s liquid fuels and all of the jet fuel for the Portland International Airport.
A 2021 report from Multnomah County, Portland Bureau of Emergency Management, and economic consulting firm ECONorthwest found that, in the event of a major earthquake—like the overdue Cascadia Subduction Zone quake—the CEI Hub could release anywhere from 94 million gallons to almost 200 million gallons of fuel into the ground and Willamette River. The spill would be comparable to the 2010 Deepwater Horizon spill in the Gulf of Mexico, except instead of occurring in the middle of the ocean, this spill would be in Portland’s urban core.
An updated version of the CEI Hub report released Monday further details the impact the spill would have on human life, wildlife, and infrastructure. The report estimates that the combined cost of damages and clean up costs related to the spill could range from $359 million to $2.6 billion. A majority of that estimate is attributed to the clean up costs, which could range from $109 million to $1.4 billion, but also includes monetary damages to residential property, human health, habitats and species, and the impacts the spill would have on fuel supply and prices.
The $2.6 billion cost estimate does not include impacts to cultural values, recreation, or fisheries. Six federally recognized tribes rely on the Willamette and Columbia rivers for resources and cultural services. According to the report, because cultural services are made possible by place and continuity of use, there is no amount of money that could compensate for nearly 200 million gallons of oil devastating a place of such cultural significance.
“Because of the uncertainty, complexity, and inadequacy involved with identifying a monetary measure for cultural values, they are not monetized or quantified – but should be considered to have significant economic value and importance,” the report states.
It’s not immediately clear who would be responsible for footing the multi-billion dollar bill. The federal Oil Pollution Act, created after the 1989 Exxon Valdez oil spill, states that “responsible parties” are liable to pay for oil clean up and damages caused by the oil in the event of a spill. However, the act has an “Act of God” clause that removes liability from the oil companies if the spill is a result of an unexpected natural disaster. Spills that fall under the "Act of God" clause are paid for by a federal fund.
According to the report, the ultimate decision on who pays what will be a legal question settled in court. However, a court case following the expected oil spill would take years as regional governments, private citizens, and the oil companies fought over who was responsible, leaving the city, county, and its people to bear the initial costs as legal battles waged on.
“Workers who are killed, residents who must evacuate, and citizens nationwide that value the ecological resources of the Lower Columbia River all bear the initial costs of a failure to prevent or contain a spill at the CEI Hub,” the report reads. “The ability for those harmed to recover those damages will be laid at the hands of a legal process that will undoubtedly take many years to resolve and may compensate individuals inequitably.”
By quantifying the damage the CEI Hub would cause during a major earthquake, local officials are hoping to invalidate an “Act of God” argument and give legislators a better foundation to create laws that require oil companies to pay up immediately. There isn’t a precedent for the city, county, or state to follow when it comes to holding oil and gas companies responsible for a spill that has yet to happen.
“We do need to examine at every level of government what can be done, because the scope of this is so large that there is probably not a single policy solution—it has to be an array of connected policy solutions,” said Multnomah County Commissioner Susheela Jayapal after the first CEI Hub report was published last year.
As Multnomah County pursues a research-focused path, Oregon legislators are taking a preventative approach.
State Senator Micheal Dembrow, who represents part of East Portland, is championing a bill that would require fuel facilities in the CEI Hub to submit to an independent seismic assessment by June 2024. The assessment would evaluate the seismic resiliency of each facility’s tanks and make recommendations on how to improve the tank’s resiliency. Recommendations could include strapping a tank more securely to the ground, adding flexible connectors to the fuel pipes that move with the quake instead of break, and stabilizing the silt-like soil that the CEI Hub currently sits on. Under the bill, the facilities would be required to make any seismic upgrades recommended by the assessment.
An estimated 91 percent of the actively used tanks in the CEI Hub were built prior to 1993, before modern seismic technology existed. According to the report, the tanks built before 1993 will spill all of their contents during an earthquake while tanks built after 2004—when improved seismic technology became a design requirement—will only release 10 percent of their contents. In other words, seismically retrofitting all of the tanks in the CEI Hub would dramatically reduce the size of the oil spill.
“Every time I drive by the Hub or see it from a distance, I have a nightmare vision that the earthquake strikes—as we know it will—and we elected officials are left having to ask ourselves, ‘Why did we ignore the warnings?'" Dembrow said during a Monday press conference about the new report. "Fortunately, I believe that the time is right for people to step up.”
The CEI Hub bill will also require the Oregon Department of Energy to conduct a study of where some of the tanks in the Hub could relocate. Not only would an oil spill at the CEI Hub be a devastating environmental disaster, but 90 percent of the state would lose its fuel supply—fuel that would be needed to run hospital generators and first responder vehicles following a major earthquake.
“We need fuel after the earthquake, because we won't be able to rebuild if we don't have fuel,” Dembrow told the Mercury last week. “That's obviously another reason to make sure that the tanks are as solid as possible, but also that we have alternate sites around the state [to supply fuel from].”
The bill requires any proposed site for a new fuel hub to receive feedback from the local community and the state’s Environmental Justice Task Force, which aims to protect residents from environmental health hazards.
Dembrow’s bill is supported by co-chairs of the Oregon legislative budget committee, the chairs of the Senate and House emergency preparedness committees, and 19 additional legislators. Given the number of people supporting the bill, Dembrow says he’s optimistic it will pass.
“It’s really eating away at me knowing that this risk is out there and that most people don't really know,” Dembrow said. “On the one hand, I hate to make people aware of this risk because in some ways they're blissfully ignorant and they don’t have to obsess over it. But, having said that, it is something people need to know about and we need to prepare for.”