The city of Portland issued Zenith Energy a new Land Use Compatibility Statement (LUCS) on Monday morning, enabling the company to continue its local oil storage and transport operations in compliance with the state. The decision was met with immediate backlash from advocates who are critical of Zenith and the city’s oversight of it, which they believe has been too permissive in the face of the environmental risk the company’s operations pose. 

The decision to issue Zenith a new LUCS comes days after two City Council members, Mitch Green and Angelita Morillo, filed a resolution to formally investigate the company and its franchise agreement with the city. Green and Morillo’s resolution, which they submitted to the council clerk on January 31, sought to delay the LUCS approval process until the investigations were complete. 

According to a city press release, staff at Portland Permitting & Development (PP&D) determined Zenith Energy’s fuels terminal is “allowed under city land use regulations.” In a statement, Interim City Administrator Michael Jordan said the city “has a duty to uphold its land use processes, with good faith and due process for all parties involved.” 

“We appreciate the city’s fair consideration of a technical fix to our existing land use approval,” Grady Reamer, Zenith’s Chief Commercial Officer, said in a statement. “It will keep us on track to completely transition from crude oil to renewable fuel by October 2027.” 

Late last year, Zenith received a mandate from the Oregon Department of Environmental Quality (DEQ) to seek a new LUCS from the city in order to comply with the state’s air quality permit application requirements. The DEQ determined Zenith had made unapproved expansions to its site in Portland’s Northwest Industrial Area, and also issued the company a $372,600 fine. 

To environmental advocates, the DEQ’s assessment provided the city an opportunity to hold the company to stricter standards, and came just in time for Portland’s new City Council to provide input. During their campaigns, many of the current City Council members were critical of Zenith and other oil companies operating in Portland’s Critical Energy Infrastructure (CEI) hub along the Willamette River. 

At a January 21 work and listening session on the subject, the Council appeared largely sympathetic to public concerns about the company. But city staff told councilors the LUCS decision was administrative and essentially out of their purview. Even so, councilors said they would assess their options for decisionmaking about Zenith, including seeking a formal process allowing members of the public to provide testimony about the land use decision. 

The city’s decision to sign off on the LUCS may limit councilors’ opportunities to act on Zenith. But Green told the Mercury he and Morillo would continue pursuing an investigation into the company and its potential violations of its franchise agreement with the city. The investigation they’re seeking would also look into city staff conduct related to Zenith, and require communications between the company and city employees to be easily accessible to the public. 

Green said he is “disappointed” the city made this decision despite knowing members of City Council were seeking the investigation. 

“I think it’s really important for us to continue to press this question in the form of a resolution,” Green said. “It’s important for the public to see us grapple with questions of accountability and transparency.” 

In a statement on social media, Morillo also emphasized the need for transparency, citing “discrepancies between the information [City Council] received from city staff, Zenith, and outside experts.” 

“These are huge contracts, there’s a lot of money to be made,” Morillo wrote. “We have to have strong oversight.” 

During the work session two weeks ago, city staff said Zenith was expected to return to the DEQ with a LUCS decision by February 4. But they admitted the city had options to delay its verdict. Green said he thinks the resolution he and Morillo submitted would’ve been a good enough reason to pause the process. 

Mayor Keith Wilson said in a statement that he is supportive of Green and Morillo’s resolution, and would “work with the city council to ensure that any investigation into this matter begins swiftly and is carried out with full public transparency.” He said he was “not in a position to impede the administrative determination” of a LUCS, which he called a “narrowly defined procedural step.” 

“The future of regional energy policy will not hinge on a single permitting determination, nor should it,” Wilson said. “We must come together to make hard and important decisions as a community.” 

Environmental advocates maintain the LUCS decision was a crucial chance for the city to change course in its oversight of Zenith. Instead, as Dineen Crowe from climate nonprofit 350PDX said in a press release, the community has “already been let down.” 

“Today’s decision is a complete disgrace,” Crowe said. “City staff should be ashamed of themselves for yet again colluding and siding with a Texas-based fossil fuel company over the needs and voices of local Portlanders.”

Environmental advocates plan to protest the LUCS decision at 8:30 am Wednesday, February 5 at Portland City Hall. City officials have also pointed to an upcoming City Council work session about the CEI hub as an opportunity for public involvement and discussion about the future of fossil fuels in Portland.