City Council demands mayor investigate Zenith Energy agreement
Portland City Council passed a resolution calling for investigation into Zenith’s potential violation of its franchise agreement, disclosure of city communications, with Street Roots reporting as key exhibits
At Portland City Hall, local environmental advocates held signs reading “Pass the Resolution, Stop Zenith” on March 19. City Council voted 11-1 in favor of a resolution demanding Mayor Wilson investigate Zenith Energy’s potential violations of its franchise agreement, and urging the auditor to create a report on the city’s recent interactions with the company. Credit: Photo by Jeremiah Hayden
Portland City Council voted 11-1 on March 19 in favor of a resolution demanding Mayor Keith Wilson investigate Zenith Energy’s potential violations of its franchise agreement after the Houston-based fossil fuel transport and storage company constructed and operated pipes at its Northwest Portland facility without first notifying the Department of Environmental Quality, or DEQ.
"Earth to Oregon" is a recurring column by Jeremiah Hayden covering developments in environmental policy and litigation in Oregon.
The resolution — the first major policy item to come out of committee under the city’s new form of government — cited a Portland City Charter section allowing the mayor to initiate investigations and cancel franchise agreements and requiring the mayor to do so at the City Council’s direction. Councilor Steve Novick was the lone no vote.
The City Council also urged the city auditor to investigate and prepare a report detailing the city’s handling of Zenith’s recent land use application, citing “competing statements” made by city officials and Zenith in a Jan. 21 work session. Additionally, it directed Wilson to pause any administrative action with regard to Zenith until the investigation is complete.
The new investigation would follow a long line of infractions that environmental advocates say the city should scrutinize. Since 2018, Zenith has violated multiple state laws and city ordinances, including avoiding clean-up practices, air permit violations, unauthorized construction and violations of the city’s lobbying code.
Wednesday’s resolution could be a significant step in providing the accountability environmental advocates have demanded from City Hall since the company took over a former asphalt terminal in 2014. The city could ultimately revoke Zenith’s franchise agreement if the investigation finds Zenith in violation, meaning the oil-by-rail company would be unable to continue doing business in the city.
The City Council’s lively and at times tense discussion — which lasted more than two hours — often veered into process arguments, highlighting how elected officials in the new form of government can be more responsive to the people who elect them while pressure to continue the status quo remains.
Councilor Mitch Green, who submitted the resolution alongside three other city councilors, told Street Roots the resolution is intended to bring transparency around government processes regarding Zenith and shed light on how local officials should operate under the new form of government.
“It puts a stake in the ground, and it says that on a big public interest issue, if the community feels like there was not a public process that was adequate or consistent with a promise, then city councilors are going to pull them directly into City Hall and take action to make that transparency evident,” Green said.
Green said in the City Council meeting that he would not have known about Zenith’s plans or the city’s questionable interactions if not for Street Roots’ recent reporting on issues found in public records requests.
Environmental advocates tipped off DEQ to Zenith’s potentially illegal construction during a public information meeting last fall. DEQ paused the state permitting process to gather more information on Nov. 14, 2024, following an unannounced visit to inspect the site the day prior. In that visit, DEQ found Zenith failed to disclose the construction of at least 250 meters of new piping and other components on a neighboring property operated by McCall Oil — infrastructure it used on at least 34 occasions between April 2021 and June 2024.
The city requires any person, public or private entity to execute a franchise agreement for long-term use of the city’s streets. Zenith is one of six companies with an agreement for pipelines, including Chevron and Kinder Morgan, while major utilities NW Natural and Portland General Electric, wireless carriers AT&T and T-Mobile and cable television provider Comcast also carry franchise agreements with the city. Zenith has operated under a franchise agreement between the city and Chevron dating back to 1991, which the city extended for 20 years in 2017 and transferred to Zenith in 2018.
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 franchise 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, and requires the city and Zenith to comply with all state and federal laws.
Nick Caleb, Breach Collective climate and energy attorney, filed a complaint with the city on Jan. 13, alleging Zenith violated the city code as early as 2021 when it constructed the pipes, and said it may still be in violation.
Caleb told Street Roots he believes Zenith’s violations call past city authorizations into question.
Zenith reports filed with DEQ show a steady increase in throughput — the amount of fuel passed through a facility — every year since 2019, despite its promises to DEQ in 2018.
“Zenith has been engaged in behavior since 2018 that almost certainly violates its franchise agreement obligations, beginning with a broken promise to state regulators and city officials that their operations would have no new throughput — throughput has more than doubled — or increases in volatile organic compound emissions,” Caleb said.
In response to Caleb’s complaint, Portland Permitting and Development carried out an inspection as recently as March 13, according to Elliott Kozuch, Community and Economic Development public information manager.
“We should have a determination regarding the merits of that complaint within the next week,” Kozuch said.
Councilor Jamie Dunphy brought an eleventh-hour amendment to the resolution to remove a requirement that the mayor hire an independent investigator, citing the city’s ongoing budget woes. As the city faces an ongoing $93 million budget deficit, Dunphy said the city already has employees who can investigate and the extra cost may be ill-advised.
“The additional cost to hire an external person at this moment does not feel like the highest and best use of the city’s limited public dollars,” Dunphy said.
The initial resolution also included a document environmental advocates sent to city councilors scrutinizing a presentation city officials made during a Jan. 21 City Council work session. A friendly amendment to remove that exhibit made by Councilor Angelita Morillo to address Councilor Eric Zimmerman’s concerns passed with a 9-3 vote.
Despite multiple attempts to remove exhibits, the final resolution maintained references to multiple incidents first brought to light by Street Roots. That includes reporting showing Zenith intends to expand its operations and become the preeminent renewable fuels hub on the West Coast, as well as a discrepancy between the date Zenith officially submitted its LUCS application — Dec. 11, 2024 — and when city staff say it received the application, on Dec. 17. 2024. Donnie Oliveira, deputy city administrator, sent an email to then-city councilor-elects, city attorneys and Mayor-elect Wilson on Dec. 12, 2024, saying the city had not received the application, despite DEQ confirming to Street Roots it was submitted Dec. 11, 2024.
“At this time, the City has not received any request for a new or revised LUCS from Zenith,” Oliveira wrote. “If and/or when the City receives a request, it will be processed by Portland Permitting & Development in the same manner as all other applicants.”
Public records show the process around Zenith has been unusual since at least 2022. The city auditor found Zenith violated the city lobbying code in 2022 when it engaged public officials to present an “industrial symbiosis” version of its operations and promised to transition to 100% renewable energy by Oct. 3, 2027.
Public records obtained by Street Roots revealed a city attorney invoked attorney-client privilege to protect a political strategy around Zenith in December 2024 — something public records lawyers say showed an intent to abuse the attorney-client privilege designations. Portland Metro Chamber lobbyist Jon Isaacs discussed Zenith with Oliveira — who plays a central role in the LUCS process — before sending a Jan. 28 letter to elected officials in support of the land use approval, giving fuel to advocates’ fear of another process they call a “backroom deal” — as first reported by Street Roots. Environmental organizations sued the city Feb. 24, saying the process failed to adequately involve the public.
Explaining his vote in favor, Councilor Sameer Kanal said Zenith’s LUCS approval was an example of Portlanders telling the city government what the community wants while simultaneously being told there is a bureaucratic reason why it can’t be done.
“Portlanders have not seen the kind of transparency around the city’s conduct related to Zenith that they are entitled to, and frankly, this council has not received sufficient information either,” Kanal said. “As a result, the public has understandably lost trust in the city.”
Green told Street Roots that the resolution’s passage shows the community can influence Portland’s new form of government.
“This is why it’s so valuable to have citizen advocacy on issues, from the environment to corporate influence — you name it,” Green said. “Because you can move the needle in local government in ways right now it seems like you can’t at the federal level.”
Street Roots is an award-winning weekly investigative publication covering economic, environmental and social inequity. The newspaper is sold in Portland, Oregon, by people experiencing homelessness and/or extreme poverty as means of earning an income with dignity. Street Roots newspaper operates independently of Street Roots advocacy and is a part of the Street Roots organization. Learn more about Street Roots. Support your community newspaper by making a one-time or recurring gift today.
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