Zenith Energy’s storage and transport facility faces criticism for potential environmental dangers, including its handling of renewable fuels. Credit: Photo by Jeremiah Hayden
Zenith Energy may have violated Portland city code by constructing pipes to transload fossil fuels and renewable fuels at a dock on the Willamette River, according to a new complaint filed with Portland Permitting and Development, or PPD.
"Earth to Oregon" is a recurring column by Jeremiah Hayden covering developments in environmental policy and litigation in Oregon.
Nick Caleb, Breach Collective climate and energy attorney, filed the complaint Jan. 13, alleging Zenith violated the code as early as 2021 when it constructed the pipes and may still be in violation.
“I believe it is possible that Zenith violated (and continues to violate) city code by not obtaining permission prior to modifying and constructing the infrastructure described in the report and by failing to disclose its construction, modification, and operation to the City of Portland,” the complaint said.
Elliott Kozuch, Community and Economic Development public information manager, said the city does not have a record of the related permits.
“PPD has not identified any structural or trade permits for the work DEQ noted in the December 6 report,” Kozuch said.
The city’s confirmation amplifies environmental and community advocates’ concerns that it continuously fails to hold the Houston-based company to account despite significant concerns about its practices at the Critical Energy Infrastructure, or CEI, Hub.
Kozuch said the city PPD’s Property Compliance Division team would assess the specifics of the complaint, and the city would investigate the complaint.
“During the course of the investigation, the City may use its authority, as allowed by law, to request complete plan sets identifying the existing improvements,” Kozuch said. “Until the City has a complete plan set, it cannot determine whether the existing, new or any proposed improvements require additional permits or land use reviews.”
The Oregon Department of Environmental Quality, or DEQ, fined Zenith for constructing and operating pipes adjacent to its own facility for over three years and requested Zenith obtain a new land use statement, or LUCS, from the city by Feb. 4.
Street Roots asked the city on Jan. 8, Jan. 10, Jan. 14 and Jan. 16 if it could provide documentation showing the city approved the construction DEQ fined Zenith for and when it became aware of the construction. The city could not provide the document, saying it was generally aware of Zenith’s operations and transition to renewable fuels but learned of the specific details from DEQ in its inspection report.
The DEQ inspection report and penalty letter revealed Zenith illegally modified and used new infrastructure to move fossil fuels and renewable fuels from April 8, 2021, to June 6, 2024. The city granted Zenith a new LUCS Oct. 3, 2022 — 18 months after the company illegally installed the pipes.
The approval came as Zenith was potentially violating the code and just two months after Zenith gave an undisclosed tour of its facilities to city officials and bureau staff in July 2022. Caleb said Zenith also potentially violated the code as the city conducted its Greenway Review from May 30, 2023, to Jan. 25, 2024.
“Those were opportunities for that to be disclosed, right?” Caleb said. “They didn’t get permission. It doesn’t look like they ever tried to get permission. They were just kind of like, ‘We’re doing this, and we don’t feel like saying anything.’”
Additionally, Caleb said if Zenith violated the code, it may have further implications for its franchise agreement.
“Applicants have a responsibility to follow the law, disclose their activities and make accurate disclosures to the city in any legal process,” Caleb said. “That’s just a background principle of law.”
Any person, public or private entity in Portland must execute a franchise agreement for long-term use of the city’s rights of way. Zenith has operated under a franchise agreement between the city and Chevron dating from 1991. The city extended the franchise for 20 years in 2017 and transferred it to Zenith in 2018.
Caleb said if Zenith did not disclose information relevant to the city’s 2022 LUCS decision, it could also affect whether the city should approve its current LUCS application.
Zenith’s franchise documents outline specific requirements, including “compliance with laws,” if Zenith wants to continue its operations.
“Nothing in this Franchise shall be deemed to waive the requirements of the various codes and ordinances of the City regarding permits, fees to be paid or the manner of construction,” the agreement said.
The agreement requires new facilities to be constructed according to applicable city regulations and ordinances. It also requires Zenith to obtain all permits necessary for the construction, maintenance or installation of its facilities. The city and Zenith must comply with all state and federal laws.
Multiple remedies exist for franchise violations, including requiring Zenith to pay for damages, entering into litigation, and suspending or revoking the franchise, according to the agreement.
“The City’s failure to enforce shall not constitute a waiver of any term, condition or obligation imposed upon Grantee under this Franchise,” the agreement said.
Caleb said the new information, combined with Zenith’s history of flouting local and state regulations, warrants an investigation.
“These are all reasons to examine this franchise agreement and see if Zenith’s actually been upholding it,” Caleb said. “So, at the very least, there’s an investigation to be had here.”
The city appeared concerned about the lack of permits in the days leading up to DEQ’s request, and as Zenith submitted its new application Dec. 17, 2024.
Lauren King, deputy city attorney, emailed a group of city employees, including Andrew Gulizia, PPD city planner, Nov. 27, 2024, asking how much the city knew about the docks DEQ fined Zenith for when issuing the 2022 LUCS.
“One question I have is how much the City ‘knew’ or considered the McCall and Chevron docks when issuing the LUCS?” King asked.
Gulizia responded to the email Dec. 2, 2024, outlining his understanding, saying the legal decision came after the political decision.
“I think I did understand they were using docks on the other side of the railroad tracks,” Gulizia said. “That wasn’t part of any analysis I did, though. I mainly just worked with Lauren on writing up a decision document after the agreement with Zenith had already been made at the commissioner level.”
In a Dec. 18, 2024 email, David Kuhnhausen, PPD interim director, outlined to city staff the importance of tracking down permits for Zenith properties, saying the narrative Zenith included in its permit application implied the city bureaus knew about its work.
“Zenith’s operations on third-party parcels were explained in the 2022 LUCS materials, and we understand were considered by the City in its decision,” Zenith said in its application.
Kuhnhausen declined to use the name “Zenith” in his email, as Street Roots began requesting public communications that included the name Dec. 11, 2024.
“There is a specific property in NW that submitted request for a LUCS yesterday,” Kuhnhausen wrote. “There is particular interest on piping and the actual construction of the docks on the two properties with river access (more below). I informed the CA that we may not have any records of those.
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