New city councilors realize they don’t have much power over the controversial company’s future—and they want to change that. by Taylor Griggs Few other industrial activities in Portland have drawn the level of public scrutiny that Zenith Energy’s crude oil storage and transport facility has. The company’s operations have catalyzed climate protests and public backlash. The city of Portland has also been denounced for its oversight of the company, which critics say has been overly permissive.  Environmental advocates, disappointed in how previous Portland City Council members handled Zenith, hoped the new Council would challenge or reverse past decisions allowing the company to operate in Northwest Portland’s Critical Energy Infrastructure (CEI) hub. Just three weeks into the new Portland City Council term, councilors confronted the Zenith issue head-on—but after back-to-back work and listening sessions on January 21, it’s still unclear what jurisdiction they have to challenge the company.  The city of Portland is currently tasked to make a decision whether to provide Zenith with new land use credentials, as required by the state. Company critics and some City Council members have seen this moment as a potential turning point to limit Zenith’s operations and try to curb its environmental impact.  Portland City Council members heard presentations and public testimony from city staff, Zenith officials, environmental experts, and dozens of concerned city residents at Wednesday’s meeting. The groups presented conflicting views of the city’s past relationship with the company, as well as the possible paths the City Council can take going forward.  Throughout the meetings, councilors’ frustrations mounted as they were met with pushback from city staff about their authority to influence the current decision to issue Zenith a new Land Use Compatibility Statement (LUCS). Many of the councilors have publicly expressed some degree of skepticism about Zenith’s activity—and some of whom are outright critics of the company and its operations in the city. At the end of the meetings, several councilors indicated they would look into their legal options for officially weighing in on the city’s approval of Zenith’s operations.  Though there has been heightened public attention on Zenith for several years now, the company has faced even more scrutiny over the last few months. In November, the Oregon Department of Environmental Quality (DEQ) paused processing a new air quality permit for Zenith, and subsequently required the company to get a new Land Use Compatibility Statement (LUCS) from the city of Portland. The DEQ’s requirements, which were issued along with a six-figure fine, came after the state agency found the company had made unapproved expansions to its Northwest Portland operations.  The DEQ asked Zenith to return with a new LUCS from the city of Portland by February 4, giving the city a brief window to make a decision—though this deadline may not be legally binding if the city is working in good faith to find a resolution. If the city were to deny the LUCS, Zenith would almost certainly appeal the decision with the state. From there, the city would be compelled to provide evidence that Zenith’s proposed land use is prohibited and could not be made compatible given certain conditions.  City staff believe, based on Portland’s zoning and comprehensive codes, they would be unlikely to prevail on those grounds. They emphasized upcoming opportunities for Portland City Council to influence the future of fossil fuel infrastructure in the city, such as a work session planned for March about the Critical Energy Infrastructure (CEI) hub in Northwest Portland, where Zenith and other oil companies are located. But they said the current decision to issue Zenith a new LUCS is not the place to have that larger conversation.  “We think the LUCS is something we have to contemplate administratively,” Donnie Oliveira, interim deputy city administrator for the Community and Economic Development service area, said at the January 21 work session. “Hopefully we can begin the [bigger] conversation with you all about how we address the CEI as a city and as a region.”  Portland staff familiar with the city’s permitting and environmental policies said the city’s processes for dealing with Zenith have been unusual. David Kuhnhausen, interim director of Portland Permitting and Development (PP&D), defined the LUCS as a “statement that evaluates whether a proposed use or activity is compatible with the existing land use regulations that apply to a specific property.” He said PP&D receives about 150 LUCS applications annually, for facilities and operations ranging from auto-dismantling businesses to childcare centers.  Kuhnhausen said Oregon law doesn’t have procedural requirements, like a public comment period, for government jurisdictions processing a LUCS. Typically, the requests are handled by PP&D administrative staff, and don’t rise to a supervisory level. Kuhnhausen also said the city doesn’t apply standards from its 2035 Comprehensive Plan when processing a LUCS application, and solely uses the zoning code to justify its decision. But the level of public interest in Zenith’s LUCS decision has made the case a major outlier.  According to Kuhnhausen, the city listened to community concern in 2021 when it denied Zenith’s LUCS request, finding the company’s activities at the site “did not meet the goals and policies included in the Comprehensive Plan.” But Zenith appealed that decision with the state, and the city ultimately granted the company a LUCS in 2022 after it agreed to transition to renewable fuels. Oliveira said the requirements of the 2022 LUCS create an opportunity for the city to “compel an operator in our city to be better.” Zenith critics are skeptical the company will follow through on its promise to transition to renewables, however, and say environmental risks remain even if it does. They also don’t feel the city relied on their input throughout the earlier LUCS process, calling the 2022 decision a “backroom deal.”  A "pre-ordained" decision?  Portland City Council hears public testimony about Zenith at the January 21 meeting. (Courtney Vaughn) Following the presentation from city staff, many councilors asked for clarification about their role in this process.  Councilor Eric Zimmerman surmised from the staff presentation that the city has limited tools to make changes to Zenith’s LUCS.  “I’m feeling like a decision has been pre-ordained, and I don’t love that,” Zimmerman said. “The levers available to this Council as it relates to an action happening in our community is something I think we should at least be able to discuss.”  Councilor Loretta Smith raised a similar point, saying she has received emails from people in the community “who think [councilors] have the ability to stop this.”  “If we don’t, we need to make it very clear,” Smith said. “Clarity is important so we can be deliberate and so I can be truthful to the people who send me emails about this, and say I don’t have a vote on this. I can’t determine the outcome of this.”  According to City Attorney Robert Taylor, the decision is currently an administrative one. But, Taylor said, the City Council has options for “treating it as a quasi-judicial decision” they would have decisionmaking authority on. Taylor said he would discuss potential options with councilors in a confidential executive session. Councilor Olivia Clark said she felt tension in the city’s “conflicting policies” around topics including renewable energy, disaster resilience, and economic needs.  “I don't think this is the last time we're going to confront that,” Clark said. “We do need that bigger picture conversation with you [about] what's coming at us from all different angles, aside from the very specifics about this issue.”  The rest of the work session contained testimony from Zenith company leaders, who defended the safety of their Portland terminal and talked about their transition to renewable fuels. The City Council also heard from a panel of people who work in the environmental and tribal fields, who spoke critically about Zenith’s operations and urged Portland to demonstrate climate leadership and hold the company accountable.  During the listening session, more than 40 people shared their concerns about Zenith and their disappointment about the lack of public input and transparency throughout the city’s dealings with the company. The public comments appeared to strengthen some councilors’ existing convictions about the city’s relationship with Zenith, and amplify their earlier frustrations with the bureaucratic hoops preventing meaningful City Council input on the LUCS.  Councilor Mitch Green, whose district includes the CEI hub, said he’s working on a resolution to investigate the city’s past involvement with Zenith, which the City Council can expect to see shortly. Councilor Sameer Kanal made a pledge to work with the city attorney to create a responsive public process to “allow for co-creation of a decision with our community” about Zenith’s new LUCS.  “You deserve a public process on this,” Kanal said. “That doesn’t mean anything necessarily about what the outcome will be, but to have an actual open public process is a requirement of good governance.”