Zenith Energy—Another Bait and Switch?
Erin Saylor is a Staff Attorney with Columbia Riverkeeper. A 2008 graduate of Lewis & Clark Law School, Erin started her career as an enforcement attorney at the U.S. Environmental Protection Agency in Washington, D.C.. She joined Columbia Riverkeeper in 2019, where she focuses on protecting the Columbia from fracked gas, oil-by-rail, and other fossil fuel infrastructure.
Q: What is the Zenith Energy Portland Terminal?
A: Zenith Energy’s Portland Terminal is a fossil fuel transloading facility—meaning the company accepts fuel products from one mode of transportation and passes them along to another. Usually, Zenith is transferring crude oil from trains to ships (through Chevron’s dock across NW Front Ave.), but it also has the ability to accept products via trucks. Most, if not all, of the product Zenith handles is destined for other places in the U.S.—it’s not used here in Oregon.
Zenith’s facility, located at 5501 NW Front Ave., has operated as a petroleum products storage terminal since 1947, originally as Willbridge Asphalt Refinery. The 39-acre site has 84 tanks with a total storage capacity of 1,518,200 barrels. The asphalt refinery ceased operations in November 2006 and was officially closed in December 2008. Around 2013, Zenith’s predecessor, Arc Logistics, started using the facility to refine crude oil. Zenith took over in December 2017 and within one month was importing tar sands and crude oil to the Portland Terminal on mile-long trains from Canada and North Dakota.
Q: Why are environmentalists so concerned about Zenith?
A: No one really knew, not even the state regulatory agencies, that Zenith had started handling tar sands crude oil until these mile-long oil trains started moving through the Columbia River Gorge and Portland. These trains are incredibly dangerous. The oil inside the railcars is highly pressurized; derailments are not uncommon and when they happen there is a very high risk that one or more of the railcars could explode. In 2016 an oil train derailed and caught fire in Mosier, Oregon—prompting the evacuation of a nearby neighborhood. Imagine if that had happened within a more densely populated area like Portland? According to Multnomah County, BIPOC communities bear the brunt of the risk of a derailment, as those communities are most likely to be situated closest to the rail lines.
Beyond the immediate safety risks, there’s climate change. We need to rapidly move away from fossil fuel use to slow the impacts of the climate crisis. As long as the oil companies keep pumping oil out of the ground—largely supported by government subsidies—we will continue to rely on fossil fuels to power our cars and homes. We need to reduce our dependence on fossil fuels now.
Q: Can you explain the history of Zenith’s expansion efforts?
A: When Zenith first took over control of the Portland Terminal, it had the infrastructure in place to unload about 12 tank cars per day. However, it inherited a number of building permits that Arc Logistics had procured from the city to construct three new rail car platforms and unloading racks. By the time Zenith completed that construction in late 2018, it had the ability to unload up to 44 rail cars per day.
In 2019, Zenith asked the city for permission to install three new pipes under NW Front Avenue, between the Portland Terminal and Chevron’s dock. Zenith claimed that these new pipes would not be used to handle fossil fuels; instead they would hold only bio/renewable fuels and a liquid intermediate called Methylene Diphenyl Diisocyanate (MDI)—a nasty chemical that reacts with water. After massive community opposition, the city denied Zenith’s request, largely because the city believed it couldn’t trust the company to use the new pipes only for bio/renewable fuels.
Not easily deterred, Zenith decided if it couldn’t build under NW Front Ave it would build over it. In late 2019, Zenith again applied to the city to construct three new pipes. However, this time it asked for permission to build the new pipes over the road to the dock owned by McCall Oil. After the city reminded Zenith of its determination regarding Zenith’s plans to build under Front Ave and requested additional information about Zenith’s plans, Zenith withdrew its application.
Then in February 2020, Zenith applied to the city for permits to build two new railcar unloading platforms that would purportedly be used solely for renewable fuels. Instead of building new pipes under NW Front Ave to access the docks, Zenith would use some of its existing pipes. This is the plan Zenith is still pursuing today.
Q: So it’s been over a year since Zenith applied for those building permits, has the City of Portland issued those permits?
A: As of April 15th, the city had approved most of Zenith’s pending building permits. However, in addition to the building permits, Zenith needs a construction stormwater permit from the Oregon Dept. of Environmental Quality (DEQ). Legally, Zenith cannot break ground on the construction project until it has this permit from DEQ. However, DEQ told Zenith that before the agency could issue the permit Zenith needed to submit a new Land Use Compatibility Statement (LUCS) from the City of Portland. So once again Zenith had to apply for the city for permission to build this new infrastructure.
Q: What is a Land Use Compatibility Statement (LUCS)?
A: In general, before DEQ can issue a permit that may affect land use, it has a responsibility to ensure that its decision won’t conflict with local land use laws. DEQ does this by asking permit applicants to submit a LUCS from the city or county it’s located in. The LUCS is an opportunity for the city or county to review the project and certify whether the project fits into a city or county’s land use policies and regulations.
In Zenith’s case, the issue is that the City of Portland has a number of policies against the expansion of fossil fuel infrastructure. This is why Zenith has hit so many walls with the city—the city cannot ensure the new infrastructure complies with its land use policies if it doesn’t trust Zenith not to use the new infrastructure for fossil fuels.
Q: Why doesn’t the City of Portland trust Zenith?
A: In March 2019, in a meeting with representatives from Mayor Wheeler’s office, Zenith allegedly told city officials that it was no longer handling tar sands crude—a statement that turned out to be completely untrue. Additionally, when Zenith submitted a Notice of Construction to DEQ to construct its new rail racks in 2018, the company represented to DEQ that the new infrastructure would result in “[n]o new throughput.” Earlier this year, in a letter to Zenith’s attorney, DEQ pointed out that, in fact, Zenith’s throughput in 2019 (167,215,847 gallons) was over eleven times higher than it had been before the racks were completed in 2018 (14,770,252 gallons).
Zenith also isn’t the first fossil fuel terminal to be less than forthcoming with regulatory agencies about their operations. In 2012, DEQ quietly approved an air permit modification for Global Partners’s Columbia Pacific Bio-Refinery in Clatskanie that would allow the company to handle an “incidental” 50 million gallons of crude oil per year. By 2014, Global Partners was facing a DEQ enforcement action for transporting almost six times that amount in a single year. Global also provides an example of a facility handling large quantities of crude oil under the guise of a “bio-refinery.”
Once the requisite permits are issued, it is very difficult for the city and the regulatory agencies to keep track of exactly what is happening at these facilities. Since Zenith has a history of being less than honest in its interactions with the city and DEQ, it’s hard to trust what Zenith is telling them now regarding the purpose of the new infrastructure.
Q: Will the public have an opportunity to weigh in on the City’s LUCS determination?
A: Unfortunately, no. When Zenith first submitted its application to the city for a LUCS for its construction stormwater permit, the City of Portland’s Bureau of Development Services (BDS) indicated that there would be a public process. However, Zenith’s attorneys pushed back hard and claimed that since the city’s normal LUCS review process doesn’t include a public notice component, it would be unfair to require one for Zenith’s application. The city relented and BDS ended up issuing the LUCS for Zenith’s construction stormwater permit on April 16th.
Q: So that’s it then? Zenith now has the greenlight to build its new infrastructure? How can the city be sure it won’t be used for fossil fuels?
A: Not exactly. The city still hasn’t issued the final building permits to Zenith, but we expect that those will be issued soon. To ensure that the new infrastructure will, in fact, be used solely for renewable fuels, the city included a condition in the construction stormwater LUCS that requires Zenith to hire an independent, third-party contractor to sample and test the materials delivered through the new rail racks on a quarterly basis. That independent contractor will send its findings directly to BDS for review each quarter. It’s not a perfect solution, but it’s better than nothing.
Additionally, before Zenith can operate the new rail racks, it needs approval from DEQ through a revised Title V air pollution permit.
Q: The Title V air permit covers a massive amount of pollution entering our airshed—why has Zenith been allowed to operate under a Title V air permit that expired so long ago?
A: Zenith is currently operating under a Title V air permit that was issued to the Willbridge Asphalt Refinery in 2007. Typically, air permits are only valid for five years—meaning Zenith has been operating under an air permit that expired almost a decade ago. The permit has been “administratively extended” because the prior owner of the facility submitted a timely renewal application back in 2012; DEQ just hasn’t gotten around to fully processing the renewal. DEQ modified the permit multiple times over the years to account for new owners and various changes in operations; the result being a highly piecemeal permit that doesn’t reflect Zenith’s current operations.
At the same time DEQ told Zenith it needed a new LUCS for a construction stormwater permit, the agency also informed Zenith it would need a new LUCS for the air permit renewal. Zenith could have applied to the city for one LUCS to cover both permits, but Zenith chose to apply for each separately. By applying for the construction stormwater LUCS separately, Zenith was able to narrow the city’s review for that LUCS to just the proposed renewables infrastructure—a use which is treated favorably in the city’s land use plans and policies. For the air permit LUCS, however, the city will be required to look at the expanding operations of Zenith’s entire facility, including the tar sands and crude transloading operation—a use that undermines a number of city policies and ordinances.
Q: If the City of Portland grants the air permit LUCS, will the public’s only opportunity to weigh in on Zenith’s expansion be during DEQ’s Title V permit process?
A: That’s correct. To our knowledge, Zenith has not yet applied to the city for the air pollution permit LUCS. When it does, if the city ends up processing the air permit LUCS the same way it processed the construction stormwater permit LUCS, the public will not have an opportunity to engage in that process. However, by law, DEQ must provide public notice of Zenith’s draft air pollution permit including a public comment period and likely a hearing as well.
Q: What is the timeline for the air permit process?
A: DEQ requested that Zenith provide the LUCS for the air permit by May 30, 2021. Assuming that timeline is met, I think we can expect to see a public notice on the draft air permit in early summer.
Q: Will there be an opportunity for the public to give input?
A: Yes! Once the public notice is issued for the air permit, we’ll let folks know what the timeline is for comments and when the public hearing will be held.
Q: How can folks get involved in the fight against Zenith?
A: In addition to engaging in the air permitting process through DEQ, folks should feel empowered to bring their concerns to City Council. Just because there isn’t a particular action pending before the city right now doesn’t mean that Council doesn’t need to hear your concerns. The more people who speak out against Zenith, the more pressure the city will feel to make changes to its policies to make it harder for these facilities to expand behind a curtain of secrecy or to move in in the first place.
Community members have made it clear time and time again that there is no room in a healthy future for dangerous, dirty fossil fuels. We are facing a climate emergency and cities have the right to protect the health and safety of the public and prioritize building resilience over corporate profits.
UPDATE: Q&A Part 2: Exciting Developments in the Campaign to Stop Zenith!
Q: What are the recent developments with the Land Use Compatibility Statement (LUCS)?
A: On Aug. 27, 2021, the City of Portland denied Zenith’s application for a Land Use Compatibility Statement (LUCS), declaring that Zenith’s oil-by-rail storage and transfer facility in the Critical Energy Infrastructure (CEI) hub in NW Portland is inconsistent with the City’s land use goals and policies.
By denying the LUCS, the City concluded that Zenith’s oil-by-rail operations are inconsistent with the land use goals and policies set forth in its 2035 Comprehensive Plan, which requires city officials to consider—among other things—the off-site impacts of Zenith’s oil trains (including the impacts to low-income and BIPOC communities), seismic safety, and risk reduction. The City’s decision came just weeks after the release of a new draft study highlighting the significant risks associated with storing large quantities of fossil fuels in Portland’s CEI hub. The study noted that tanks in the CEI hub that were constructed before 1990 are likely to spill 50-100% of their contents during a major seismic event—all of Zenith’s tanks fall into this category.
Q: How did this happen?
A: Years of dedication from the community ultimately led to this victory. The science is clear and the opposition to this project is overwhelming. Here’s a snapshot of what it took:
- 46 neighborhood organizations signed and submitted a letter demanding the LUCS be denied;
- 20 Oregon state legislators sent a letter to Commissioner Dan Ryan asking for a denial of the LUCS;
- The Multnomah County Board of Commissioners issued a statement opposing Zenith’s LUCS application;
- 17 environmental and community advocacy organizations sent a letter in opposition to granting the LUCS; and
- Thousands of residents called or emailed city officials.
Q: Is the LUCS denial a final decision?
A: Zenith appealed the City’s denial of the LUCS to the Land Use Board of Appeals (LUBA). Columbia Riverkeeper and Willamette Riverkeeper have moved to intervene to support the city’s decision.
Q: How does the LUCS decision affect the Department of Environmental Quality’s decision about the Title V air pollution permit?
A: To operate its existing crude oil-by-rail terminal, Zenith needs to renew its Title V air pollution permit from DEQ. One component of that renewal permit application is a Land Use Compatibility Statement (LUCS) from the City of Portland.
In January 2021, DEQ notified Zenith that the company’s recent expansion project and the associated increase in throughput at the facility triggered the need for Zenith to obtain a new LUCS from the City. Without an approved LUCS, Zenith’s air permit application is incomplete and cannot be further processed by DEQ. Without an air permit, Zenith cannot operate. Zenith has until October 31st to request a hearing on DEQ’s proposed denial of its application. If Zenith fails to request a hearing by that date, DEQ’s decision becomes final and Zenith will no longer be able to legally operate its facility.
Q: What happens if Zenith requests a hearing on DEQ’s proposed denial of its Title V air pollution permit?
A: If Zenith requests a hearing, it will trigger a formal administrative judicial process referred to as a “contested case hearing.” The contested case hearing process includes numerous preliminary steps before an actual hearing will occur, and there is no set timeframe by which DEQ must complete the proceedings. Zenith will be permitted to continue to operate its oil-by-rail facility under its existing air permit until DEQ issues a final determination at the end of the contested case hearing process.
Q: So, neither the City’s decision on Zenith’s LUCS application nor DEQ’s proposed denial of Zenith’s air permit is final until the appeal processes have been completed?. Is Zenith still allowed to run oil trains in the meantime?
A: Yes. Zenith will be able to continue to operate under its current air permit until DEQ makes a final determination regarding their renewal permit application.
Q: If Zenith loses the appeal to LUBA, does that mean the Title V permit will automatically be denied by DEQ?
A: Zenith will still have an opportunity to go through the contested case hearing process at DEQ, but it will be an uphill battle for the company. The law is clear that DEQ cannot issue a permit where the facility is not operating in compliance with the local comprehensive plan and land use regulations.
Q: How long does the LUBA appeals process take?
A: It varies from case to case, but the average LUBA appeal takes about four to eight months from start to finish.
Q: What is the timeline for DEQ’s contested case hearing process?
A: There is no set timeline for the contested case hearing process. DEQ has created a page on its website where the agency plans to provide updates on Zenith’s permit status.
Q: Will there be an opportunity for the public to give input?
A: Not formally. Both the LUBA and DEQ processes are formal legal processes that do not include opportunities for public comment.
Q: How can folks get involved in the fight against Zenith?
A: Right now is a great opportunity to show support to the City and thank them for making the right decision by denying the LUCS. We spoke up and they listened. There is a thank you petition folks can sign, and calls and letters to City Commissioners are great too!
Still looking to do more to stop dangerous pollution? Check out the latest on what is happening with the Carty Gas Generating Station and PGE’s request to DEQ to allow a massive increase in harmful emissions in the Columbia River Gorge National Scenic Area. Take Action today!
Stunning new fossil fuel proposals threaten the Columbia. The good news? We are fighting and winning!