By Michael Gutwig, Editor & Manager

Portland Mayor Charlie Hales blindsided union construction workers May 7 when he abruptly pulled his support for a propane gas export facility at the Port of Portland’s Terminal 6.

Pembina Pipeline Corp. of Calgary, Alberta, signed a letter of understanding with the Columbia Pacific Building and Construction Trades Council to build the $500 million facility with a union workforce estimated between 600 and 800 over two years.

Once completed, the terminal would create 35 to 40 permanent jobs. That employment was valued at approximately $7.2 million in wages and benefits annually. Additionally, an estimated $3.3 million in annual tax revenues would go to the City of Portland, $2.4 million to Multnomah County, and $3.1 million to Portland Public Schools.

Hales welcomed the announcement last September of a half-billion-dollar investment—the largest single private capital investment in the city’s history, with no taxpayer subsidies. The project also had strong support from the Port of Portland, business groups, and organized labor.

The propane terminal drew loud opposition from the environmental community.

Because of the early strong support, the company spent nearly $15 million to comply with various city regulations and requirements of the zoning change process. Pembina needed a zoning change to allow for an above ground pipe between its storage tanks and the shipping berth. [Zoning codes allow for such pipelines at other Port facilities on the Willamette River.]

After several contentious public hearings, the Portland Planning and Sustainability Commission, on a 6-4 vote, approved the zone change application, with a condition that Pembina pay a carbon fee of $6 million. The recommendation now has to be adopted by the Portland City Council. With the first reading scheduled for June 10, proponents thought they had majority support.

“We were totally blindsided,” John Mohlis, executive secretary of the Oregon State Building and Construction Trades Council, said of Hales’ abrupt change.

“What kind of message does this send to other businesses that might be considering Portland?” asked Mohlis, who is also a member of the Portland Development Commission. “Nothing on this project changed. Pembina had millions (of dollars) invested, only to have the rug pulled out from under them.”

In a press statement, Hales said he had “spoken to countless Portlanders. I’ve studied the testimony at the Planning and Sustainability Commission. I’ve discussed this with colleagues inside City Hall and in the business community. I do not believe Pembina has made the case as far as Portland’s environmental standards are concerned. And for that reason, I am asking Pembina to withdraw.”

Pembina, in a followup press release, said it would move forward with its application.

The mayor is one of five votes on the City Council, so proponents of the project are still hopeful they can get a majority. Commissioners Dan Saltzman and Nick Fish are regarded as supporters. Amanda Fritz is opposed. Steve Novick is undecided.

Construction unions are planning a rally and propane gas barbecue prior to the council meeting on June 10. Details had not been finalized at press time.

PROJECT BACKGROUND: Pembina’s overall plan is to build a rail yard with propane unloading equipment; eight transloading holding tanks to receive propane; refrigeration equipment; two large, refrigerated propane storage tanks capable of holding up to 800,000 barrels (approximately 33.6 million gallons); facility piping connecting the equipment; a control center, warehouse and maintenance facilities. It wants to break ground by mid-2016 and have the terminal up and running by early 2018.