Multnomah County calls on state regulators to block Zenith Energy’s crude oil storage in Portland

Zenith Energy crude oil trains

Crude oil tank cars line up at Zenith Energy's terminal in Northwest Portland. Multnomah County commissioners have asked the Oregon Department of Environmental Quality to deny an air quality permit that would allow Texas-based Zenith Energy to continue storing crude oil at the terminal. Mark Graves

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Multnomah County commissioners on Thursday asked the Oregon Department of Environmental Quality to deny a key air quality permit that would allow Zenith Energy to continue storing crude oil at its Portland terminal.

The move goes the opposite direction of the city of Portland, which last October gave Zenith a controversial stamp of approval for five more years of crude oil storage after the Texas-based company promised it would then transition to all renewable fuels.

“Our assessment is that Zenith Energy continues to be a fossil fuel company that presents a danger to the community,” said John Wasiutynski, director of the county’s Office of Sustainability.

Over the past year, activists have pressed Portland officials to revoke their permission for Zenith to operate. But city leaders have repeatedly said Portland doesn’t have the authority to rescind the land use compatibility statement, an unexpected agreement the city reached with the company after previously denying its land-use credential and defending that denial in court.

Portland leaders say Zenith’s eventual move to renewables meets Portland’s climate and environmental goals, including its transition to cleaner biodiesel and renewable diesel.

Zenith is one of 11 fossil fuel terminals along the Willamette River in Northwest Portland – a 6-mile stretch of the river known as the Critical Energy Infrastructure. The company offloads and stores fuels at its site before transferring them to ships bound for refineries, local markets around the region and other destinations along the West Coast.

Commissioner Carmen Rubio did not immediately comment on the county’s letter. But she told activists earlier this year at a City Council meeting: “This is an alignment with the direction that we want to go. And, quite frankly, we support any entity that wants to step up to demonstrate to us clear and permanent shifts away from fossil fuels and towards cleaner fuels.”

The county doesn’t share that view. In the letter it sent to Department of Environmental Quality Director Leah Feldon, county commissioners said Zenith’s oil-by-rail terminal poses an “immediate risk” to Portlanders’ health, including from climate-warming emissions that stem from the crude oil and diesel the company stores.

The letter pointed out that Zenith has increased the amount of crude oil and diesel that it moves through the Portland terminal over the past two years.

The increase in fuel volume, in turn, has heightened the risks of explosions, fires and spills associated with the liquid fuels’ rail transport and the potential for a massive spill in case of a large earthquake, according to the letter. Those risks will continue to be present even if Zenith were to fully transition to renewable fuels by 2027 because those alternative fuels are also flammable, the county said.

“Zenith’s reported commitment to transition to renewable fuels does not align with their expanded crude throughout at the facility,” the letter said.

Local activists, neighbors and environmental organizations have long raised concerns about the company, including its expansion of crude oil shipments. They were thrilled when the city rejected Zenith’s land-use agreement and later fought the company’s appeal.

And they were taken by surprise by Portland’s sudden reversal. In August and November, three dozen environmental, labor and community organizations sent letters to the DEQ asking the state agency to use its legal authority to evaluate alleged Irregularities associated with Portland’s approval of Zenith’s land-use credential, a key piece of the air permitting process.

Those include, the letters contend, the city’s failure to follow its own rules in the Zenith land-use agreement, tampering with public records, conducting undisclosed negotiations with Zenith while actively litigating against the company and attempting to withhold information from the public.

“The city categorizes both its denial and granting of the Land Use Compatibility Statement as an administrative process. But it’s really clear that they had a very unique and unprecedented process for Zenith,” said Nick Caleb, an attorney with the Breach Collective, a Eugene-based climate justice advocacy organization. “And this came after a court told them that they had to do a quasi-judicial proceeding, which requires informing the public, conducting a public comment process and disclosing ex-parte communications with Zenith and its agents. The city did none of these things.”

Department of Environmental Quality spokesperson Lauren Wirtis said her agency does not play a role in evaluating such claims linked to the land-use compatibility statement and that concerns should go to Oregon’s Land Use Board of Appeals. She said DEQ will ensure that the public process surrounding Zenith’s air permit – including a public comment period and public hearing that will likely take place in early 2024 – are open and transparent.

Wirtis also confirmed the agency received the county’s letter. She said state fuel tank seismic stability program rules, approved this fall, require fossil fuel storage companies in Multnomah County’s energy hub to evaluate the vulnerability of their tank systems to earthquakes and develop plans to reduce risk to public health and safety – though the companies have 10 years to complete approved upgrades.

Zenith is currently operating under a Title V air permit, which is reserved for major sources of air pollution. The company has requested the state approve its application for a less stringent permit, known as an air contaminant discharge permit, used to regulate minor sources of air contaminant emissions.

That’s because Zenith plans to slowly convert all of its crude oil storage to renewable fuels by October 2027. Renewable fuels include biodiesel, renewable diesel and sustainable aviation fuel. In June, Zenith announced that it received the first West Coast shipment of sustainable aviation fuel from Montana Renewables.

As part of its agreement with the city, Zenith promised that its toxic emissions will be reduced to less than 40 tons per year if it’s granted the new air permit. According to the company, that represents a nearly 80% reduction from the existing 179 tons per year allowed under Zenith’s existing operating permit from DEQ.

But in February, Zenith’s Chief Commercial Officer Grady Reamer told The Oregonian/OregonLive that the company emits about 50 tons per year, far below its current cap. Activists say that means the actual emission reduction under the new, less stringent permit could be fairly small – about 20% instead of 80%.

In any case, Reamer said Thursday that Zenith’s conversion to renewable fuel is “well underway.”

“We have already removed one of our primary tanks from crude oil service, and we expect our terminal to be 50% renewable by April of next year,” he said. “Portland is a national leader in clean energy, and we’re proud to be a partner in delivering on this shared vision.”

– Gosia Wozniacka;; @gosiawozniacka

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