Zenith Energy seeks permit for $24M expansion in Portland

Already denied here once, crude oil bulk storage company unveils big plans for facility near Willamette River.

PORTLAND — A local crude oil facility is back at bat — seeking approval from Portland City Hall to ramp up operations at its industrial terminal near the banks of the Willamette River.

In the months since an environmental protest petered out and Portland rejected its last bid to expand, Zenith Energy has quietly submitted several new applications that would add pipes, pumps and new railcar unloading platforms at its tank farm on Northwest Front Avenue.

It's no minor-league development.

The proposed rail infrastructure and pumps — valued by the company at $24 million — follow a tripling of capacity to offload crude oil from trains at the site in 2019. The sea change truly began in late 2017, when Zenith purchased the near-dormant site of an asphalt business and transformed it into the state's largest crude oil shipping terminal.

Zenith promises that the infrastructure, if built, will be reserved solely for renewable diesel or non-fuel products.

"We're using a wonderful engineering talent for the design, and we'll meet all the code requirements," Zenith project manager Dirk Kramer said in a brief phone call. "Local contractors, local everything."

A Feb. 13 building permit application outlines plans for two racking structures — essentially a permanent scaffold, each sized for "10 railcar unloading spots" — as well as a marine fuel manifold and a spill containment basin.

Despite the public health crisis caused by COVID-19, the project is still in motion. Zenith checked the box on a 165-page geotechnical report, The Tribune learned at press time.

"The site is located in an area mapped as having a high to very high liquefaction hazard," the Bureau of Development Services' Abbot Flatt had previously written to Zenith on Feb. 26, saying the report must include "recommendations for mitigating the hazard."

"Liquefaction" means, in the event of a major earthquake, the land beneath the site would become extremely unstable.

Legal battle ahead?

The plans could prime the field for a confrontation with Portland Mayor Ted Wheeler, who has vocally opposed the oil trains thundering through the Columbia River Gorge on their way to his city. Wheeler says Zenith's applications are laying the foundation for a lawsuit.

"They're coming at us again, for other permits, because they're trying to create a legal record," he said during a mayoral debate last month. "That allows them to then go to court and say, 'Well, this other one here that they denied was really out of step.'"

The mayor was alluding to the pipeline application Zenith presented to the city's utility monitoring agency, called the Office for Community Technology, last year. The office, overseen by Wheeler, issued a well-publicized rejection of the bid last October, saying it lacked "absolute confidence" or enough employees to confirm what substance actually flowed down the tubes.

A month later, on Nov. 18, Zenith asked the development bureau to OK building basically the same thing: two 12-inch pipelines for carrying renewal diesel to the McCall Oil dock across the street, another 8-inch pipe for a chemical used in plastics and two cleaning lines.

While Portland has, since 2016, banned the expansion of petroleum storage terminals, the city code exempts products with less than a 5% fossil fuel content. Zenith says it wants to transport renewable diesel based on soybeans, animal fats and vegetable oils that stay under the limit.

"This project is a key component of Zenith's efforts to diversify its operations to handle more renewable fuels," Zenith attorney Allison J. Reynolds wrote the city last year.

Zenith defines itself as a "midstream" operator that stores fuel but doesn't extract the raw materials or refine them. Its only competition in Oregon is the Global Partners terminal in Columbia County. Zenith reports having 23 pipelines at its Portland terminal, some dating back to the 1940s, but all but seven are out of service, according to an internal spreadsheet.

The active lines mostly run to a nearby Chevron dock, including two buried 16-inch diameter pipes carrying crude oil and others sending asphalt, aviation gasoline and jet fuel.

Skeptical reception

Activists put a spotlight on Zenith last April, planting a garden overnight that blockaded the rail spur that leads to the 39-acre site, sparking some two dozen arrests over a week.

Ken Ward, a local environmental activist well-known for his valve-turning exploits on transnational pipelines, was arrested twice and ended up serving eight hours of community service at Habitat for Humanity. While Ward encourages Zenith to get out of the crude oil business, he's more than dubious of their claims and says the company isn't trustworthy.

"We currently have a long record of this company being duplicitous, certainly lying by omission," he said in a phone interview. "Even if they were a good fossil fuel company, they should still be immediately shut down."

Zenith management didn't respond to multiple requests for comment. Kramer declined to answer follow-up questions.

Emergency limits services

Another snag, of course, is the global pandemic caused by the novel coronavirus, which has shuttered many government offices and transformed the Bureau of Development Services' team into remote workers.

BDS has been especially affected, Willamette Week noted, because many employees don't have enough bandwidth or the right security protocols to access overtaxed city servers from home computers.

As triage, the bureau is prioritizing certain tiers of work, including approval of essential infrastructure, projects at homeless shelters and hospitals, and permits already submitted.

Bureau spokesman Ken Ray says "our staff is still connecting with Zenith. But I don't think it's our highest priority right now."

Yet Zenith will step up to the plate eventually, bringing with it significant resources. The company is owned by Warburg Pincus, The Oregonian reported, a private equity firm with some $60 billion under management.

Wheeler's communications director, Eileen Park, says the mayor is undaunted.

"We remain fully committed in our opposition to the expansion of fossil fuel infrastructure in Portland," she said, "and will continue to do what we legally can as a city to stop it."