Portland City Council demands mayor investigate violations of Zenith Energy franchise agreement
The Portland City Council passed a resolution demanding Mayor Keith Wilson investigate potential violations of Zenith Energy’s franchise agreement. The 11-1 vote Wednesday comes on the heels of city staff approving a controversial land-use credential for Zenith – a key step for the company to continue offloading and storing crude oil and renewable fuel at the Northwest Portland fuels hub.The resolution also urges City Auditor Simone Rede to investigate the city administrative staff’s handling of Zenith’s land-use applications and demands top bureau leaders to place all prior communications between the city and Zenith into the public record, among other directives. Wilson told councilors he will follow their will to set up an investigation. Rede said her office is still evaluating the idea.“The Ombudsman, which is in the Office of the Auditor, will assess Council’s request against established criteria for investigation, and whether it raises issues that could be more appropriately addressed through a lobbying investigation, a complaint to the City’s fraud hotline, or another entity,” Rede said via email. The Oregon Department of Environmental Quality had asked Zenith to obtain the new land-use compatibility statement from the city after it uncovered Zenith had installed a valve and pipes at a dock owned by another company and had used the dock for three years without telling state regulators. The agency also fined Zenith $372,600 for the unauthorized dock use. The February approval of the land-use document paves the way for Zenith to apply for a new state air quality permit to extend its Portland operations. Environmental activists and some residents have opposed Zenith’s presence in Portland for years and have pressured the new City Council to look into the company’s violations and the city’s handling of Zenith, including lack of public transparency and public input. City staff have maintained Zenith’s approval, like myriad other land-use decisions, should be purely administrative. The Houston-based Zenith is one of 11 companies with fuel terminals at the Critical Energy Infrastructure Hub on the Willamette River. It’s the only company at the hub that has become a target of concerns over earthquakes, fuel spills and fires, likely because it’s the only state-regulated facility that still stores crude oil. Zenith also stores renewable diesel, biodiesel and sustainable aviation fuel and has pledged to fully transition to renewable fuels by 2027.The city originally denied Zenith’s land-use credential in 2021. But a year later, after a lengthy legal battle, the city reversed course and gave Zenith its approval, touting the company’s pledge to fully transition to renewable fuel by 2027. Zenith critics then pushed state regulators to scrutinize the company, which led the Department of Environmental Quality to crack down on the rogue dock use.Councilors passed the resolution after first striking a provision that would require the mayor to use independent outside counsel as part of his investigation. A second amendment also removed a lengthy letter from advocates attached to the resolution that listed and categorized multiple comments made by bureau officials at a January city work session on Zenith as misleading, false or “a conscious lie.” Councilor Steve Novick, who cast the only no vote, said he supports the mayor’s investigation but voted against the amended resolution because he felt it unfairly condemned city employees. “I can’t possibly vote for this resolution… without effectively saying that I think city employees are knaves and liars. And, having looked at some of the allegations against them, I think in most cases it’s shaggy dog stories, rather than malfeasance,” Novick said before voting.Several other council members, including council President Elana Pirtle-Guiney, said they were concerned the investigations would turn into “a witch hunt” but ultimately voted to support the resolution.Angelita Morillo, one of four councilors who submitted the resolution, said that wasn’t the intent, but added that it’s critical to ensure powerful administrative leaders are ethical and competent.“They are the gatekeepers of information. They can make sure elected officials receive or not receive pieces of information before we make a vote on certain policies,” Morillo said. “And so we need to have the utmost trust in them … and need to know they are accountable to the public and to us.”Pirtle-Guiney called the investigations an opportunity for oversight and accountability.“At the end, we can restore trust with all communities across the city and then we can get to work looking at the future of our land-use system and ensuring one that allows us to make sustainable choices,” she said. Councilor Olivia Clark, who voted for the resolution, said the council must start thinking about how Zenith fits in with Portland’s future climate goals. City staff have described Zenith’s transition to renewable fuels as an integral part in the city reaching its greenhouse gas emission-reduction mandates.“Zenith is supposed to be a part of the solution to the transition away from fossil fuels,” Clark said. “So this means we’re living with an uncomfortable trade-off. We must invest in strategies to lower our use of fossil fuels … and at the same time do everything we can to mitigate the threats posed by both oil trains and the CEI fuel tanks in our midst.” Neither Zenith officials nor advocates spoke at the meeting because the council didn’t allow public comments. “Zenith has worked closely and transparently with city and state regulators to ensure our operations are fully understood and properly permitted,” Grady Reamer, the company’s chief commercial officer, said in a statement to The Oregonian/OregonLive. Reamer added that Zenith’s terminal “plays a critical role in making renewable fuel available across the region” and said the company would continue to work with city and state officials to ensure compliance with all relevant safety and environmental standards.In the end, Councilor Eric Zimmerman acknowledged the resolution does nothing to stop Zenith. Though activists have challenged the city’s newly issued land-use approval in court, the DEQ said it had already evaluated it and determined it’s sufficient to resume the state air quality permitting process. State regulators said they plan to launch the public comment period in the near future. — Gosia Wozniacka covers environmental justice, climate change, the clean energy transition and other environmental issues. Reach her at gwozniacka@oregonian.com or 971-421-3154.Our journalism needs your support. Subscribe today to OregonLive.com.
The Portland City Council passed a resolution demanding Mayor Keith Wilson investigate potential violations of Zenith Energy’s franchise agreement.
The Portland City Council passed a resolution demanding Mayor Keith Wilson investigate potential violations of Zenith Energy’s franchise agreement.
The 11-1 vote Wednesday comes on the heels of city staff approving a controversial land-use credential for Zenith – a key step for the company to continue offloading and storing crude oil and renewable fuel at the Northwest Portland fuels hub.
The resolution also urges City Auditor Simone Rede to investigate the city administrative staff’s handling of Zenith’s land-use applications and demands top bureau leaders to place all prior communications between the city and Zenith into the public record, among other directives.
Wilson told councilors he will follow their will to set up an investigation. Rede said her office is still evaluating the idea.
“The Ombudsman, which is in the Office of the Auditor, will assess Council’s request against established criteria for investigation, and whether it raises issues that could be more appropriately addressed through a lobbying investigation, a complaint to the City’s fraud hotline, or another entity,” Rede said via email.
The Oregon Department of Environmental Quality had asked Zenith to obtain the new land-use compatibility statement from the city after it uncovered Zenith had installed a valve and pipes at a dock owned by another company and had used the dock for three years without telling state regulators. The agency also fined Zenith $372,600 for the unauthorized dock use.
The February approval of the land-use document paves the way for Zenith to apply for a new state air quality permit to extend its Portland operations.
Environmental activists and some residents have opposed Zenith’s presence in Portland for years and have pressured the new City Council to look into the company’s violations and the city’s handling of Zenith, including lack of public transparency and public input. City staff have maintained Zenith’s approval, like myriad other land-use decisions, should be purely administrative.
The Houston-based Zenith is one of 11 companies with fuel terminals at the Critical Energy Infrastructure Hub on the Willamette River. It’s the only company at the hub that has become a target of concerns over earthquakes, fuel spills and fires, likely because it’s the only state-regulated facility that still stores crude oil. Zenith also stores renewable diesel, biodiesel and sustainable aviation fuel and has pledged to fully transition to renewable fuels by 2027.
The city originally denied Zenith’s land-use credential in 2021. But a year later, after a lengthy legal battle, the city reversed course and gave Zenith its approval, touting the company’s pledge to fully transition to renewable fuel by 2027. Zenith critics then pushed state regulators to scrutinize the company, which led the Department of Environmental Quality to crack down on the rogue dock use.
Councilors passed the resolution after first striking a provision that would require the mayor to use independent outside counsel as part of his investigation. A second amendment also removed a lengthy letter from advocates attached to the resolution that listed and categorized multiple comments made by bureau officials at a January city work session on Zenith as misleading, false or “a conscious lie.”
Councilor Steve Novick, who cast the only no vote, said he supports the mayor’s investigation but voted against the amended resolution because he felt it unfairly condemned city employees.
“I can’t possibly vote for this resolution… without effectively saying that I think city employees are knaves and liars. And, having looked at some of the allegations against them, I think in most cases it’s shaggy dog stories, rather than malfeasance,” Novick said before voting.
Several other council members, including council President Elana Pirtle-Guiney, said they were concerned the investigations would turn into “a witch hunt” but ultimately voted to support the resolution.
Angelita Morillo, one of four councilors who submitted the resolution, said that wasn’t the intent, but added that it’s critical to ensure powerful administrative leaders are ethical and competent.
“They are the gatekeepers of information. They can make sure elected officials receive or not receive pieces of information before we make a vote on certain policies,” Morillo said. “And so we need to have the utmost trust in them … and need to know they are accountable to the public and to us.”
Pirtle-Guiney called the investigations an opportunity for oversight and accountability.
“At the end, we can restore trust with all communities across the city and then we can get to work looking at the future of our land-use system and ensuring one that allows us to make sustainable choices,” she said.
Councilor Olivia Clark, who voted for the resolution, said the council must start thinking about how Zenith fits in with Portland’s future climate goals. City staff have described Zenith’s transition to renewable fuels as an integral part in the city reaching its greenhouse gas emission-reduction mandates.
“Zenith is supposed to be a part of the solution to the transition away from fossil fuels,” Clark said. “So this means we’re living with an uncomfortable trade-off. We must invest in strategies to lower our use of fossil fuels … and at the same time do everything we can to mitigate the threats posed by both oil trains and the CEI fuel tanks in our midst.”
Neither Zenith officials nor advocates spoke at the meeting because the council didn’t allow public comments.
“Zenith has worked closely and transparently with city and state regulators to ensure our operations are fully understood and properly permitted,” Grady Reamer, the company’s chief commercial officer, said in a statement to The Oregonian/OregonLive.
Reamer added that Zenith’s terminal “plays a critical role in making renewable fuel available across the region” and said the company would continue to work with city and state officials to ensure compliance with all relevant safety and environmental standards.
In the end, Councilor Eric Zimmerman acknowledged the resolution does nothing to stop Zenith.
Though activists have challenged the city’s newly issued land-use approval in court, the DEQ said it had already evaluated it and determined it’s sufficient to resume the state air quality permitting process. State regulators said they plan to launch the public comment period in the near future.
— Gosia Wozniacka covers environmental justice, climate change, the clean energy transition and other environmental issues. Reach her at gwozniacka@oregonian.com or 971-421-3154.
Our journalism needs your support. Subscribe today to OregonLive.com.