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Zenith oil terminal fined by state regulator for ‘flagrant’ conduct at NW Portland site

Aug. 31, 2021 Updated Tue., Aug. 31, 2021 at 8:43 p.m.

By Shane Dixon Kavanaugh The Oregonian

PORTLAND – Zenith Energy faces a fine of nearly $25,000 after state regulators said it performed construction work at its terminal along the Willamette River in Northwest Portland for months without a required permit.

The fine is another blow to the embattled crude oil storage company.

The Oregon Department of Environmental Quality imposed the $23,598 penalty last month, claiming the unsanctioned activity at the property posed a risk of discharging harmful sediment into the nearby waterway, documents show. The Houston-based company said Tuesday that it filed an appeal to contest the fine in state administrative court.

In a July 7 ruling, the state environmental agency said it was “concerned by the flagrant nature of Zenith’s conduct” because the company continued construction activity even after state regulators denied its application for a permit to allow such work.

Details of the hefty fine and harsh words come only days after officials with the city of Portland refused to grant the company a favorable land use ruling it likely needs to continue and potentially expand its operations at its waterfront terminal.

The city’s refusal to grant that blessing will likely weigh heavily against Zenith as it seeks to renew a separate – and necessary – air quality permit with the state environmental agency. Its current permit expired at day’s end Tuesday.

“Zenith continues to operate under the air permit renewal application that was filed with DEQ in a timely manner,” the company said in an emailed statement.

Zenith bought a former asphalt refinery on Northwest Front Avenue for $61 million in 2017. It uses the 48-acre facility to store fuels before transferring them to ships bound for refineries and markets elsewhere.

State regulators said the company first sought a construction permit for the site in May 2020 but was informed two months later that its application did not include what is known as a Land Use Compatibility Statement from the city of Portland, documents show.

Despite not having the necessary permit, Zenith spent the next eight months grading the property, chopping down trees and pulling up root systems – known as “grubbing” – and stockpiling structural materials, according to the letter.

In its statement, the company said that it had “performed certain salvage and recycling operations with respect to debris and soil that had accumulated from prior permitted projects” in March 2020, two months prior to seeking the construction permit in question.

Portland officials on Friday declined to issue the Land Use Compatibility Statement to Zenith, claiming that the company’s plans for the site, which include storing and loading fossil fuels as it gradually transitions to 50% renewable fuels by 2026, are incompatible with the city’s climate and resiliency goals.

That decision came after months of mounting pressure from state lawmakers, county officials and environmental activists, who have sought to halt operations at the facility.

As recently as 2019, the company allowed millions of gallons of Canadian tar sands crude oil to be transported through and stored in Portland.

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