Updated: This story was updated with new information from Mayor Charlie Hales and reaction from other key players, including Pembina and Bill Wyatt



Portland Mayor Charlie Hales reversed course this week on Pembina's controversial proposal to build a propane export facility in North Portland, urging the Canadian company in a call Wednesday to withdraw its plan.

Hales said he withdrew his support after receiving thousands of calls and emails from residents that "almost without exception" opposed Pembina's $500 million project.

"At some point, those of us in power have to listen to those who put us there," Hales said in an interview.

Both inside and outside City Hall, Hales' statement was met with a sense that the mayor's sudden opposition likely doomed the project. But Port of Portland and Pembina officials doubled down on their terminal plans Thursday afternoon, setting the stage for a City Council vote tentatively set for June 10.

"They've spent $15 million to get to this point," Bill Wyatt, Port of Portland executive director, said of Pembina's design and engineering plans dating to September. The company, Wyatt said, is "simply unwilling to walk away from that."

The proposed terminal would be on a 50-acre site in St. Johns near the confluence of the Columbia and Willamette rivers. Pembina expects to bring propane to Portland by rail and then ship it overseas by tanker.

But neighborhood groups and environmental advocates have criticized the plan as an environmental risk for a project that would create a few dozen jobs.

Pembina issued a statement Thursday afternoon saying it would proceed with plans to build a terminal at the port's Terminal 6 property.

The company said it was "disappointed" in Hales' statement but remained committed to the project. "Pembina has appreciated the leadership, guidance and past support of the mayor throughout the development of the project to date," officials said.

Wyatt said Hales' abrupt change is still setting in, saying the mayor for months hadn't expressed "an ounce of concern."

"This is a very bitter pill to swallow," Wyatt said.

The company survived several contentious public hearings before the Planning & Sustainability Commission, Wyatt said, while being subjected to ridicule from the general public without the backing of city staff. "Then the one person whose support has been most compelling them changes his mind," Wyatt said of Hales.

Hales said he hadn't planned on announcing his change of heart right away, saying Pembina leaders asked for confidentiality as they digested his request to withdraw their project. But Hales said his hand was forced when Port of Portland officials apparently leaked word of his opposition to Willamette Week.

Wyatt said he emailed port commissioners Wednesday afternoon so they wouldn't be blindsided by the mayor's about-face.

Hales made the rounds to city commissioners' offices on Thursday morning after news of his opposition broke.

Hales, who oversees the Bureau of Planning & Sustainability, welcomed the project last fall, and officials believed with the mayor's support was a path to approving it this summer.

That's no longer a sure thing.

The first-term mayor said the Pembina project became "a real referendum on our commitment" to addressing climate change. Hales said from the beginning he was concerned about the safety of the export terminal and whether the project meets Portland's environmental standards.

"I think both the Port and Pembina have failed to make the case," Hales said.

Environmental groups such as the Columbia Riverkeeper and the Audubon Society of Portland released statements applauding Hales' decision. Audubon praised Hales for sending "a strong message that Portland intends to remain a leader nationally and internationally on addressing global climate change."

Sandra McDonough, CEO of the Portland Business Alliance, criticized Hales' change, calling Pembina's proposal the largest private investment in Portland history.

"We are extremely disappointed that the mayor has abruptly closed the door," she said.

Pembina said Hales is "one of the five votes" available on the council. "Pembina addressed all safety concerns related to the project," officials said in a statement, citing three public hearings on the proposal.

Hales is running for re-election in 2016, but he said he "never discussed" his re-election plans while discussing his decision with Wyatt or Pembina executives.

"It's pretty clear that I'm willing to make the right but unpopular decision," Hales said, citing his recent proposal to move the Right 2 Dream Too homeless camp to the Central Eastside and a 2014 effort to raise more money for street maintenance.

Hales recalled a recent interaction when an elderly woman approached him on 82nd Avenue and said, "Mayor, please don't let this happen to our city."

Wyatt confirmed that Hales never directly stated his re-election plans as rationale for reversing course in his Wednesday call. "But why else would you be concerned about that?" Wyatt said of public opposition.

"He didn't want to fall on his sword for this project," Wyatt said.

Pembina's propane export terminal is proposed on a vacant plot of land at the Port of Portland Terminal 6 facility, just across the Oregon slough from West Hayden Island. Bruce Ely / Staff (Bruce Ely)

In September, the city and Port of Portland announced the Pembina project in a joint statement. The agencies said the development would create up to 800 construction jobs and 40 permanent jobs.

Pembina's plans called for bringing in propane to the Port of Portland's terminal by train, then piping it underground to a dock. The company needed city approval for the pipeline.

Propane exports aren't regulated by the federal government, so the Pembina proposal faced fewer restrictions and permitting issues than controversial liquefied natural gas facilities.

Hales cited news this week of another oil train fire as further evidence of the "obvious problem of transporting" fossil fuels.

Wyatt said the mayor's statement doesn't include any specific examples of the environmental risks of the Pembina proposal, describing the corporation as a "great company with a terrific track record."

The planning commission narrowly approved the Pembina plan in April after a lengthy and contentious public hearing.

In a statement, Bob Sallinger, Audubon's conservation director, said he's glad the mayor listened. "We now need to adopt a comprehensive policy that says Portland will not build any fossil fuel export facilities in our city."

Hales said he would not speculate on future projects, saying Pembina and the Port "did not make the case for this project."

Wyatt said Thursday's news was discouraging for a number of reasons. When the port withdrew plans for a controversial development of West Hayden Island, Wyatt said, a chief concern was the agency needed to make use of current resources. Pembina's plan used "existing infrastructure, existing dock, existing rail facilities," he said.

"It's a terrible message for a company to be treated like this," Wyatt added.

The company and the Port previously said they'd hoped to have the terminal online by early 2018.



-- Andrew Theen

atheen@oregonian.com

503-294-4026

@cityhallwatch