Land Use Board of Appeals Says City Needs Stronger Argument to Deny Permit for Zenith Energy

The ruling puts the burden back on the city to further justify its decision.

rain Rain on the Willamette River in 2020. (Motoya Nakamura / Multnomah County)

The Land Use Board of Appeals told the city of Portland on Thursday that it must make a stronger argument for denying a land use computability statement with Zenith Energy, creating yet another stalemate over whether the crude oil storage company will get the proper permissions to continue operating.

Last August, the city scuttled Zenith’s aspirations to continue operations and potentially expand its capacity by denying Zenith a land use compatibility statement for its Northwest Portland facility, located along the waterfront. At that time, Portland’s Bureau of Development Services said Zenith’s operations were not in line with the city’s 2035 Comprehensive Plan.

The compatibility statement, called a LUCS for short, is one of the requirements necessary for the Oregon Department of Environmental Quality to grant Zenith a renewed air quality permit—a requisite for Zenith to continue operations. The oil terminal takes in crude oil from trains, stores it in tanks, and then pushes the oil through pipes onto ships that travel both domestically and overseas.

In its decision today, LUBA said the city has the power to reject a LUCS for Zenith, but that it needs to provide more concrete findings to justify the decision: “We agree with petitioner that remand is required for the city to adopt sufficient findings to support the decision. On remand, the city should explain why the use is not ‘compatible’ with the cited provisions of the 2035 Plan.”

In the fall, state lawmakers and climate activists put pressure on City Hall to deny Zenith the LUCS. “The catastrophic risks of approving this application cannot be overstated,” 20 state lawmakers wrote to City Commissioner Dan Ryan at the time.

In its refusal to grant the LUCS for Zenith, BDS cited potential harmful impacts on marginalized communities as well as potential environmental damage.

Zenith then took the issue to the Land Use Board of Appeals, claiming its plan to transition to a “fully renewable energy facility” was “very much in line with the values and goals reflected in the city of Portland’s 2035 Comprehensive Plan.”

Andrea Simpson, West Coast commercial vice president for Zenith Energy, said in a statement, “While we are pleased that the Land Use Board of Appeals concluded that the city of Portland failed to satisfy Oregon law, its decision that land use compatibility statements should be handled differently under the law than other land use approvals will make it more difficult for any business to plan or operate in the city of Portland or the state of Oregon.”

She added, “Oregon can be a leader in renewable fuels by using terminal infrastructure already in place, but not with rulings like these.”

Neither Commissioner Ryan nor the Bureau of Development Services immediately responded to requests for comment.

Climate activists see the decision as a win.

Nick Caleb, a climate attorney for the advocacy group Breach Collective, called the decision a “significant victory for Portlanders.

“[It] makes it clear that large fossil fuel corporations cannot expose Portland’s residents and environment to unreasonable risks and expect their projects to be rubber stamped by local governments,” Caleb said. “Zenith’s operations are clearly incompatible with Portland’s comprehensive plan and land use laws.”

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