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When the city of Portland permitted Zenith Energy to continue operating its fuel transport and storage facility in Northwest Portland three years ago, it did so on several conditions designed to limit potential harms to the environment.
The land use compatibility statement issued by the city requires Zenith to phase out its use of crude oil, reduce its storage tank capacity, and reduce other potentially toxic emissions. The company is also required to cease operations at its local asphalt refinery.
When the city initially granted Zenith the land use credential in 2022, a number of environmental groups argued the conditions did not go far enough in curtailing Zenith’s operations in Portland, which pose a major risk in the event of an earthquake. They did, at least in theory, provide a set of guardrails the company would have to abide by.
But a lawsuit has called the city’s ability to enforce those conditions into question.
Earlier this year, a coalition of environmental groups and Portland residents sued the city over its decision to grant Zenith a land use compatibility statement (LUCS)—arguing the city improperly failed to include opportunities for public involvement during the approval process.
The lawsuit is still in its preliminary stages, with the plaintiffs and the city currently battling over the venue in which the suit will be heard. But during a hearing in August, an attorney for the city turned heads by telling a judge that the city does not believe it can enforce the conditions in the LUCS at all.
Environmental groups say the city shouldn’t have issued its stamp of approval with updated conditions if city staff knew they had limited capability to enforce the requirements listed in the LUCS.
“To me, it feels kind of like an admission that it was all bullshit the whole time,” Nick Caleb, an attorney with Breach Collective said of the inclusion of the conditions in the LUCS.
The city attorney’s office, led by Robert L. Taylor, has a different take: His office says that while the city itself cannot enforce the conditions in the LUCS, the state Department of Environmental Quality can.
The city can also, according to the city attorney’s office, enforce the conditions through its franchise agreement with Zenith, which enables the company to access the public right-of-way.
“It was important to the City to include its own ability to enforce the requirements,” the city attorney’s office wrote in a statement to the Mercury. “Therefore, the City captured the LUCS limitations as a requirement in its franchise agreement with Zenith. That is, if Zenith ever deviates from the limitations described in the LUCS, the City would be able to enforce those deviations via its franchise authority.”
Mary Stites, a staff attorney at the Northwest Environmental Defense Center, one of the organizations involved in the lawsuit, told the Mercury that the limitations in the LUCS—repeated in the franchise agreement—are the “only thing creating any semblance of an obligation” on the company.
Nevertheless, if the city believes it cannot enforce the conditions in the LUCS itself, it raises broader questions about why the city granted the LUCS in the first place.
In 2021, when Zenith first applied for the LUCS, the city denied it—explaining that the company’s continued operation in Portland would harm the environment and historically marginalized groups.
At that point, the city said its decision to deny the LUCS “reaffirms the City’s commitment to pursuing a clean energy future, addressing climate change and reducing our dependence on fossil fuels.”
The next year, however, the city reversed course—conditionally granting Zenith the LUCS with the requirements included as a means of ensuring Zenith’s activities align with the comprehensive plan. The city auditor later found that Zenith violated the city’s lobbying code in pursuit of that LUCS. Following a new requirement from the Oregon DEQ, the city granted Zenith another LUCS earlier this year.
“If those conditions are what makes it compatible [with the comprehensive plan], claiming that those conditions are not enforceable—does that make this not compatible with the comprehensive plan?” Kate Murphy, senior community organizer at Columbia Riverkeeper, said. “Because you can’t have both, right?”
Caleb said that even though the conditions in the LUCS were framed as concessions from Zenith to the city’s environmental aims, it was never clear how they would be enforced.
The practice of including conditions in land use compatibility statements is relatively new and legally murky, and the city has thus far been unwilling to take action on Zenith’s franchise agreement—much to the dismay of City Council, which voted 11-1 in March in favor of a resolution demanding that Mayor Keith Wilson look into potential violations of the agreement.
The city attorney’s office, for its part, says it is keeping close tabs on Zenith.
“The City has been actively tracking and monitoring Zenith’s compliance with the franchise agreement requirements that parallel the requirements in the LUCS,” the city attorney’s office wrote. “At City Council’s request, the City has also hired an outside law firm to conduct a review of Zenith’s franchise agreement and enforcement measures available to the City.”
Zenith Energy did not respond to a request for comment on this story.
Activists believe the city attorney’s position on the enforceability of the conditions in the LUCS may be driven by questions over which court will hear the current lawsuit.
The plaintiffs want the suit heard by the Land Use Board of Appeals (LUBA), an appellate review body they believe is best equipped to understand and adjudicate a case like theirs. The city attorney’s office, on the other hand, contends that LUBA does not have jurisdiction and that the suit should be heard in county circuit court.
Caleb believes the city’s desire to get the case to circuit court, which does not have the same specialization in land use issues that LUBA does, is influencing how the city attorney has presented the situation with the conditions so far. If the conditions are a key part of the reason the LUCS was granted, he said, then the case would more likely stay at LUBA.
“The way to get to circuit court is to say the conditions don’t matter—but stepping back, I would hope that there is tension with the other parts of the city to say, ‘We’re relying on these conditions to justify to the public as to why we’re allowing Zenith to continue to operate’,” Stites said.
The city attorney’s office, meanwhile, is still arguing the LUCS it has granted—along with the parallel franchise—were the best case scenario for those concerned about Zenith’s presence in the city.
“Had the City not accepted the LUCS limitations in 2022 (or again in 2025) and simply denied the LUCS, LUBA and the courts would have almost certainly concluded that Zenith’s use is allowed outright without a single limitation,” the city attorney’s office wrote. “Including limitations in the LUCS—and the franchise—was a way for the City to put some limitations on Zenith’s operations.”
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Abe Asher
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