The southern fringe of the Critical Energy Infrastructure Hub, viewed from Mock’s Crest in North Portland. Forest Park hovers in the background. Credit: Photo by Jeremiah Hayden
The Multnomah County Board is drafting an ordinance to require owners of fossil fuels and hazardous materials facilities to provide financial assurance for costs and damages caused by catastrophic spills at the Critical Energy Infrastructure, or CEI, Hub.
"Earth to Oregon" is a recurring column by Jeremiah Hayden covering developments in environmental policy and litigation in Oregon.
If passed, the ordinance would require owners of certain facilities to “demonstrate proof of sufficient financial resources to pay costs and damages from a worst-case spill or release from a facility,” according to an early working draft of the ordinance. While some state and federal regulations exist, proponents say the requirement could stave off likely delays in receiving funding in the event of a crisis.
Nancy Hiser lives in the Linnton neighborhood. She said residents there have been active for more than 10 years advocating for public safety and spreading public awareness about the dangers of the CEI Hub during public testimony to the board of commissioners Nov. 14.
“We must prevent problems, not just try to survive them, and failing that, launch what would surely be significant posthumous legislation,” she said. “Today I urge you to step up and be instrumental, proactive on this issue over which you have authority — risk bonding.”
The draft ordinance said facilities could provide financial assurances through a trust fund, an insurance policy, a bond, a letter of credit, or other mechanisms approved by the Multnomah County Office of Sustainability director.
Sitting on the banks of the Willamette River, the CEI Hub’s companies store or transport 90% of all liquid fuels in Oregon, including 100% of the state’s aviation fuel. Environmental advocates have long argued the CEI Hub risks calamitous consequences to the environment, and human and non-human life, particularly in the event of a megathrust earthquake in the Cascadia Subduction Zone — a 600-mile fault line stretching from Northern California to British Columbia, roughly 100 miles off the Pacific Coast.
In public comments provided during the Nov. 14 board meeting, Katherine Muller, a Portland-based scientist and educator, said requiring financial assurances for facilities at the CEI Hub is critically important to ensure that corporations — not the public — pay for damages caused by unintentional fuel releases and to incentivize businesses to comply with state requirements.
“Requiring financial assurances from fuel companies is not a new concept,” Muller said. “No one thinks twice about requiring renters to pay a security deposit to cover damages that they may cause in their rental unit. In the same way, requiring a contractor to be licensed and bonded provides homeowners with protection from their contractors’ mistakes.”
Muller said that concept is already familiar to fossil fuel companies, as owners and operators of underground storage tanks have long been required to have financial assurance products to pay for the cost of cleanup, injuries and property damage.
A 2022 Multnomah County Seismic Risk Analysis found that the CEI Hub’s 630 tanks were built an average of 70 years ago, and many were built more than 100 years ago. They are vulnerable to liquefaction, meaning water-logged sediments near the ground surface can lose strength, causing major damage to the tanks and likely causing significant leaks into the Willamette River. In a worst-case scenario Cascadia Subduction Zone earthquake, that could make for a costly cleanup.
“The monetized costs could range up to $2.6 billion and based on prior spills, total costs and damages would likely be many multiples of the monetized amount,” the report said.
Commissioner Sharon Meieran and her office led efforts to develop the new policy. She and former Commissioner Susheela Jayapal pushed for an analysis in 2020 to study the potential risks at the hub in the instance of an earthquake, which ultimately led to the 2022 report.
“The general public has been calling on us to address the looming risk,” Meieran said in a Multnomah County board briefing on Nov. 7. “It’s a problem for our community. We’re saying, what can our role be in taking action, and how can we align and collaborate at the federal, local, and state level to address this risk?”
Justice delayed, justice denied
Acknowledging existing federal and state regulations, the proposed county ordinance seeks to decrease the potential for delays in receiving funding, which could hamstring efforts to respond to damages and ongoing risk in a crisis situation. For various reasons, any harm caused in a worst-case scenario could potentially not be covered.
The draft ordinance noted the federal Oil Pollution Act and state law contain “Act of God” provisions and liability caps, leaving the county to front costs and potentially limiting the amount of funds available.
The Oil Pollution Act amended the Clean Water Act in 1990 to streamline the Environmental Protection Agency’s ability to prevent and respond to catastrophic oil spills. The act required some storage facilities to submit response plans in the event of a large oil spill.
Additionally, the draft ordinance said the county could face delays in reimbursement from the federal government, while litigation or administrative barriers could likewise leave taxpayers on the hook.
“Any limitation on or delay in access to funds will leave Multnomah County and its taxpayers bearing the costs of emergency response, damage, cleanup, and mitigation of ongoing harm resulting from the spillage or release of known toxic products in containers unable to fully contain them,” the draft ordinance said.
With President Trump’s reelection, federal reimbursements to local governments could be more complicated, and the potential for disaster could be higher if he decides to lift regulations, as promised.
Trump’s campaign website, Agenda 47, claims the U.S. became the number one producer of oil and natural gas globally under his first presidency, and he promises to lift restrictions in his second term.
“We will soon be again by lifting restrictions on American Energy Production and terminating the Socialist Green New Deal,” the platform said. “Republicans will unleash Energy Production from all sources, including nuclear, to immediately slash Inflation and power American homes, cars, and factories with reliable, abundant, and affordable Energy.” (Note: all emphasis is as written in the 2024 platform.)
In the briefing on the ordinance on Nov. 7, Chris Voss, Multnomah County Emergency Management director, said while federal and state mechanisms have some teeth to hold companies accountable, there are indeed recent examples of delayed settlements leading to ongoing damage. The 1989 Exxon Valdez oil spill in Alaska and the 2010 Deepwater Horizon spill in the Gulf of Mexico are likely the most well-known, but Voss highlighted another spill that exemplified challenges the county could face in a worst-case scenario at the CEI Hub.
In September 2004, Hurricane Ivan caused a mudslide off the coast of Louisiana, collapsing a Taylor Energy-owned oil production platform and leaking an estimated 140 million gallons of oil into the Gulf of Mexico. The Coast Guard installed a mechanism to slow the leak and capture oil in 2019 but the leak continues to this day. It wasn’t until 2022 that the U.S. Department of Justice reached a settlement with Taylor Energy for $432 million — 18 years after the initial spill.
The Oregon Legislature used Multnomah County’s Seismic Risk Analysis to create 2022 Senate Bill 1567, which required owners or operators of liquid fuel terminals to submit seismic vulnerability assessments to the Department of Environmental Quality, or DEQ.
All 16 facilities regulated by the program submitted seismic vulnerability assessments this year before a June 1 deadline, according to a DEQ report submitted to the Oregon Legislature in November. Lauren Wirtis, DEQ communications and outreach manager, said DEQ requested additional information and updated assessment schedules from most facilities, which are due Dec. 6. She said adding the county’s new ordinance to that program would require further legislation.
“Financial responsibility requirements are part of other DEQ regulatory programs, but specific authority would need to be approved by the Oregon Legislature and Governor for DEQ to add it to the FTSS (Fuel Tank Seismic Stability) program,” Wirtis said. “Because that is a matter of legislative interest, DEQ doesn’t have a position at this time.”
The Oregon Legislature created the FTSS program in 2022 to regulate fossil fuel facilities in Lane, Multnomah and Columbia counties with storage capacity over two million gallons. The program requires them to submit vulnerability assessments and mitigation plans.
Just two facilities in the program acted early to meet both the vulnerability assessment and mitigation plan requirements. Three facilities have submitted geotechnical evaluations based on information at the sites or available in prior reports and are in the process of evaluation by DEQ. All others are incomplete.
The county ordinance would calculate financial responsibility based on each facility’s storage capacity and whether or not its mitigation plan has been submitted to DEQ. The county would require owners to submit a statement proving their sufficient financial resources within 18 months of the policy’s adoption and every subsequent three years.
The Multnomah County Board is scheduled for a first reading of the ordinance Nov. 21.
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