The resolution emerged after several council members voiced concerns about the city’s recent decision to sign off on Zenith’s Land Use Compatibility Statement.
PORTLAND, Ore. — Portland’s city council passed a lengthy resolution Wednesday calling on Mayor Keith Wilson to investigate Zenith Energy. The 11-1 vote comes a few weeks after the city signed off on a Land Use Compatibility Statement (LUCS) for the company’s fuel export terminal, an action which drew criticism from environmentalists and several council members.
“Zenith Energy appears to have violated its franchise agreement by failing to remain in compliance with the laws, applicable state and local laws, for example, failing to disclose its unpermitted activities with the city and DEQ, as well as violating local lobbying rules,” Councilor Mitch Green said when introducing the resolution. “So, to restore the public trust, we must investigate this franchise agreement. The mayor alone has the authority and the duty to do this, and provide council with the options for remedy if that agreement is found to be in violation.”
The resolution doesn’t directly repeal the LUCS decision or Zenith’s franchise agreement with the city, neither of which the council has the power to do. Nonetheless, environmental groups including Sunrise Movement PDX, 350 PDX, Climate Jobs PDX and the Sierra Club were quick to cheer the resolution’s passage.
“Last night’s vote was a win for Portlanders, for our River, for our climate, and for a functioning, transparent, and accountable City government,” Dineen Crowe of 350PDX said in a statement Thursday.
Permit battle in Portland
The terminal in Northwest Portland stores large quantities of crude oil awaiting shipment, and has long been a target of environmental groups who argue that bringing in oil by rail puts the city at risk. The facility is also part of the Critical Energy Infrastructure Hub, which has attracted concern due to its seismically vulnerable location along the Willamette River.
Zenith plans to expand the terminal, but first it has to renew its state air quality permit, which requires a LUCS from Portland. The city initially denied Zenith’s LUCS application in 2021, but reversed course in 2022 after the company pledged to transition the terminal to renewable fuels.
That deal drew a fiery of criticism from project opponents, including accusations of backroom dealing between Zenith and city staff. The text of this week’s resolution references reporting from Street Roots showing that the LUCS process was, according to the resolution, “highly abnormal, unprecedented, and prejudicial to the public.”
The critics got another bite at the apple late last year when state regulators nullified the LUCS after finding that Zenith had already expanded its operations to an adjacent dock in 2021 without telling the city. The company quickly applied for a new LUCS, and Portland’s newly-expanded city council eagerly jumped into the process with a pair of listening sessions in January.
The meetings highlighted significant ongoing public opposition to Zenith, but also illustrated the limits of the new council’s power to intervene. LUCS applications are handled by the permitting department and, as the city explained when it granted the new LUCS in February, staff can only assess whether the proposal complies with existing city land use regulations.
Portland’s old government system gave the council more power; when Zenith first applied in 2021, then-Commissioner Dan Ryan was able to directly step in and order the permitting department to deny the LUCS. Under the new system, only the mayor can make that kind of intervention.
But the new council made it clear this week that it doesn’t intend to let the issue rest. Earlier this month, Green and fellow councilors Angelita Morillo, Jamie Dunphy and Tiffany Koyama Lane introduced a resolution directing Wilson to investigate any potential violations of Zenith’s franchise agreement with Portland “and, if warranted, cancel the agreement.”
It also directs Wilson to pause all current administrative actions related to Zenith while the investigation is in progress, calls on permitting staff to reevaluate Zenith’s land use compliance, directs the city to disclose all prior communication between city staff and Zenith and asks the city auditor to investigate how the city handled the LUCS applications.
“This one is another example of a government being told what people want, and there being some bureaucratic reason why it can’t be done. And Portlanders have made it clear they care about this issue; the very least we can do is ensure there’s daylight on the process,” said Councilor Sameer Kanal.
Role of the council
The resolution passed after two hours of debate, some of which made it clear that the council is still figuring out exactly how much power it has under the new system.
In response to questions from councilors Loretta Smith and Eric Zimmerman, City Attorney Robert Taylor said the council can’t issue direct orders to the mayor or city staff, so even if a resolution “directs” Wilson to do something, it would really be a request. Smith then turned to Wilson and asked if he would follow through on the resolution if it passed.
“To answer your question directly, I would honor your voice and set up an investigation,” Wilson replied.
Several councilors also said they viewed the resolution as precedent-setting in terms of how the new council will function; there was some disagreement, for example, about whether to include news stories and letters from community experts as attachments to the resolution. Councilor Candace Avalos said she wanted to make sure she had the option to include those kinds of pieces in future resolutions.
Councilor Steve Novick was the only one to vote against the resolution, although Councilor Olivia Clark said she her vote was reluctant. Novick said he would’ve been willing to vote for a resolution that solely directed the mayor to investigate Zenith, but felt that the full text of the resolution went too far by implicitly calling certain city staff, as Novick put it, “knaves and liars.”
“Having looked at some of the allegations against them, I think in most cases it’s shaggy dog stories rather than malfeasance,” he said.
Several other councilors also expressed reservations about the wording even though they ultimately voted to support the resolution. Zimmerman at one point described the document and some of the attachments as reading “like a witch hunt against some city employees.”
Morillo and Kanal disputed that characterization, arguing that the main employee in question — Deputy City Administrator Donnie Oliveria — is in a very high-level role that naturally come with high public scrutiny.
The resolution passed with two amendments; one that removed an attachment that singled out Oliveria particularly aggressively, and another that changed the wording of the resolution to no longer require Wilson to hire an outside person to conduct the investigation.
Zimmerman proposed two amendments that would’ve taken out more of the attachments and harsh language about city staff, but both were defeated on 4-8 votes.