Before considering issuing a new air permit, the Oregon Department of Environmental Quality has requested that Zenith Energy obtain additional land-use permission from the city of Portland.
Additionally, Zenith was fined $372,600 by the DEQ for using a leased dock close to its fuels terminal on the Willamette River in Northwest Portland without permission.
Three weeks after the state agency abruptly halted Zenith’s air quality permit application process after an unexpected inspection, the announcements were made on Friday.
According to the agency, Zenith must obtain the new city certificate by February 4.
The request might cause the argument about Zenith’s consent to recur.
Earlier this year, the DEQ learned that Zenith had placed pipes and a valve at another company’s pier and had been using the dock for three years without informing state officials. Regulators reexamined the city permission Zenith had included in its application for an air permit as a result of the discovery.
Zenith’s future activities in Portland may be hampered by the desire for an additional city approval known as an aland-use compatibility statement. It’s probable that council members may refuse to approve Zenith’s operations given the newly elected City Council’s progressive views and the intense public outcry over the company’s infractions and lack of openness.
Grady Reamer, the chief commercial officer of Zenith, stated that the firm has worked extensively with DEQ and the city about Zenith’s marine operations and is deeply dissatisfied with DEQ’s announcements.
The City has issued a greenway permit, amended the franchise agreement for new marine connections, and is finalizing construction permits for those connections, according to Reamer, and has not voiced any concerns about the marine operations being incompatible with the LUCS [land-use compatibility statement]. We are therefore baffled by the DEQ’s exploitation of a technicality to ask for an extra LUCS for currently authorized marine operations.
Three years prior, the city rejected Zenith’s land-use compatibility declaration. However, following a protracted legal struggle, it changed its mind and issued one in October 2022, permitting five additional years of storage and transit of crude oil after Zenith pledged to become a storage firm for renewable fuels by 2027. Since then, locals and environmental organizations have not stopped.
At the Critical Energy Infrastructure center on the river, Zenith Energy is one of 11 businesses running a terminal for fossil and renewable fuels. According to DEQ’s enforcement manager Becka Puskas, Zenith operates on several tax lots at the hub, in contrast to other businesses with air source permits.
Zenith leases portions of two docks, one owned by Chevron and the other by limited liability companies associated with McCall Oil, because it owns three properties that comprise its terminal, none of which are on the river.
According to Puskas, Zenith informed DEQ in 2018 that it would begin loading goods at the Chevron pier, and the DEQ gave its approval. However, the agency claimed that it wasn’t until January, when it began processing Zenith’s application for an air permit, that it learned of the company’s usage of the McCall dock. The agency discovered at that time that Zenith had entered into a lease with McCall Oil in 2018 and had built a section of pipe and valves in 2021 to connect to an existing pipe that passes beneath Front Street and leads to Zenith’s land.
In April 2021, the company began loading and unloading biodiesel and fuel aboard ships.
After learning of Zenith’s usage of the McCall dock this spring, the DEQ sent Zenith a warning letter for using the port without authorization and failing to get consent before construction. Following additional public inquiries at a meeting in October, the EPA inspected the pier and halted Zenith’s application for an air permit.
According to Puskas, the government subsequently examined the land-use certification that Zenith had sent with its application for an air permission after receiving more inquiries from the neighborhood.
She claimed that because the city approval omits the precise tax lot numbers for the McCall and Chevron properties, regulators decided it was insufficient. Only the three tax parcels owned by Zenith are named.
According to her, all of the premises where Zenith operates and conducts its operations in the hub would need to be covered by the new city approval.
“We need a LUCS (land-use compatibility statement) that covers those multiple properties as well because we’re allowing them to operate on multiple properties, and it just doesn’t match right now,” Puskas stated.
According to her, the land-use accreditation does cover the maritime fuel loading and unloading that was limited to the docks. DEQ inspectors added that although Zenith did not specify which emissions originated from each terminal, the firm did report the emissions from marine loading at the two docks in their annual reports.
Before learning of Zenith’s operations at the McCall dock and looking through load records and reported emissions in 2024, DEQ officials claimed they were unaware that the emissions were being included in the filings.
According to Puskas, Zenith appears to have purposefully evaded notifying state regulators about the McCall dock use, which is why the department is imposing the penalties.
Puskas stated that although they are aware of how to submit these applications to us, they failed to do so in this instance. They then proceeded to operate [on that dock] for three years.
The agency counted each instance of unauthorized loading to determine the fine, she added.
Before approving Zenith’s continuing operations in the city in October 2022, Portland officials earlier stated that the city was unaware of the McCall dock’s use when it originally started and only discovered it afterward.
Portland officials are aware of the state’s decision that Zenith will require another Land Use Compatibility Statement from the city, according to deputy city administrator Donnie Oliveira.
We are currently going over the specifics of the state’s conclusions and their ramifications. As more information becomes available, we will share it, Oliveira stated.
Environmental organizations expressed their expectation that city officials would change their minds about Zenith as a result of the fine and the request for new city approval.
Nick Caleb, an attorney with the Breach Collective, a Eugene-based climate-justice advocacy group that monitors and challenges Zenith’s operations, said the City of Portland is in a position to right the wrongs it made in 2022 when it granted Zenith a Land Use Compatibility Statement without providing any opportunity for public involvement or input. This is just as a new governance structure takes effect. Since arriving in Portland, Zenith has continuously broken the law, thus it’s time to close this operation.
However, according to Zenith’s Reamer, the company’s shift to renewable fuels is essential to assisting the state and the city in achieving their climate objectives, which include phase-outs of diesel derived from fossil fuels, and DEQ’s request for additional city clearance will cause those goals to be delayed.
According to Reamer, the marine terminal is a crucial component of our commitment to the City of Portland to replace the storage of crude oil with renewable fuel. The largest renewable fuel facility in Oregon, and probably the entire Pacific Northwest, is the Zenith Portland facility.
On December 16, DEQ will host a virtual community information gathering to provide an update on its actions and future plans.
Gosia Wozniacka discusses a variety of environmental topics, including climate change, environmental justice, and the switch to sustainable energy. You may contact her at 971-421-3154 or [email protected].
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