Transcript
Automatically generated transcript. It may contain errors and includes testimony in languages other than English that is not individually marked up for assistive technology.
Angelita Morillo
People need a little—.
Jamie Dunphy
Good afternoon.
I'm calling to order this work session of the Portland City Council.
Colleagues and the public, hello.
Today we are holding a work session on the 2 legislative items related to the Critical Energy Infrastructure, or the CEI Hub.
One item makes changes to Title 13 and 24, and one makes changes to Title 17.
The Bureau of Planning and Sustainability has advanced these items as a package.
This item was originally scheduled to be heard in the Committee of the Whole pursuant to Portland City Code 3.02.020.B Sub 1A Sub 1 Sub B.
4 Councilors submitted letters requesting that this item be heard instead in full council, which has the same effect as a referral to full council.
Following that action, my, my office scheduled an informational work session prior to these first readings.
This, this is a common practice for complex legislation.
These items are scheduled to be heard at full council next Thursday, September 24th, at a time certain of 2:00 As previously stated on the record at the Committee of the Whole on September 16th, this work session will include a presentation by city staff and a council question and answer session with staff.
Additionally, council has requested brief informational presentations from the Oregon Department of Environmental Quality and a balanced panel— set of panels of representatives from engaged environmental and industrial industry organizations.
Council will not take other public testimony, vote, or take any action at the work session.
Thank you.
Our goal today is to educate council and the public on the underlying legislation of what has been recommended by the Planning Commission and the administration's proposed Title 17 amendments, as well as the state-level administrative actions with which this council's work is in conversation.
As public interest and lobbying activity on this legislation has been high and led by a few key organizations, we've also invited a balanced section of these advocates to present their positions to council.
Our goal is to enter our formal hearings next week with every member of this body and the public record having a reasonably equal understanding of what it is before us for consideration.
Colleagues, we will be limiting Q&A to strictly clarifying questions during presentations and engaging in free and open Q&A with the Planning and Sustainability staff in the second half of the meeting.
With that, I will now turn this over.
Thank you, sir.
To BPS staff to make their first presentation.
Welcome, Director Engstrom and your whole team.
Eric Engstrom
Good afternoon.
Um, for the record again, I'm Eric Engstrom, the Director of the Bureau of Planning and Sustainability.
Um, I have with me, um, Tom Armstrong, who will give the bulk of our presentation to keep things efficient, but also joining me is Patricia Dieffenderfer, Chief Planner, Eli Spivak representing the Planning Commission's recommendation here today.
And then we also have a few other planning and sustainability staff in the room should there be more technical questions.
So with that, I will turn it over to Tom once he's got the presentation loaded.
Steve Novick
All right.
Tom Armstrong
Thank you, Eric.
For the record, I'm Tom Armstrong.
I'm a supervising planner at the Bureau of Planning and Sustainability and have been managing this project.
This afternoon, I'll go through some of the basic elements of the 2 ordinances that are before you, starting with a little bit of background on the purpose and process that we went through, and then go through each of the elements in this legislative package.
Again, there are 2 ordinances in front of you.
The first one is a land use decision.
It's comprehensive plan policy amendments and amendments to Title 3, 33, the zoning code, and also Title 24, which is the building code.
And then the second ordinance is a new program in Title 17, which deals with storage capacity reduction over time.
Again, as part of the council legislative process, we've established 2 different legislative records.
Which is where all you can find all of the background information that has gone into this process, the other background reports, the energy forecasts, all of the information that is available to you to inform your decision.
So a little bit about the project purpose and scope.
We set out about a year and a half ago to update the policies and regulations, development regulations, to reduce the risks associated with bulk fuel terminals in the CI Hub.
The CI Hub is that area along Highway 30 and the Willamette River in Northwest Portland.
Currently, there are 11 bulk fuel terminals that have about 315 million gallons of fuel storage spread across those 11 terminals.
The fuel we get primarily comes from the refineries up in the Puget Sound region.
About 2/3 of the fuel comes to us via the Olympic Pipeline, which you see here in red, where Portland is the terminus of that pipeline.
The other third, most of it comes via barge.
Up the Columbia River to Portland.
And then we get a little bit via rail coming from refineries in Montana and Salt Lake City.
Where the fuel goes is, you know, a lot of it stays within the Willamette Valley itself.
There is a small pipeline down to Eugene where there is a smaller Uh, terminal down in Eugene.
Uh, about 10% of it goes upriver via barge to serve Eastern Oregon, Eastern Washington, parts of Idaho.
The rest is distributed throughout the state via truck from the terminals in the CI Hub.
At the same time, the CI Hub is located on land, you know, river-adjacent land is sediment.
Thank you.
The Hub is located on lands that are at high risk of liquefaction.
It is also adjacent to Forest Park and subject to wildfire risk.
And that, you know, should an accident or an event occur at the Hub, the spillover effect includes The potential of spreading wildfires, spills to the river, and toxic air quality concerns throughout Portland.
A little bit about our process.
We got started with you all back in March of 2025 with a work session similar to this.
Following that, we started a process where we held a series of community meetings to outline the process and start talking about concepts and alternatives.
We really followed that up in the summer of 2025 with small group meetings to really start to talk through what those concepts might look like.
We then held a collaborative work session, a facilitated work session with all parties, both business and industry and community groups to really hear from each other and to begin to shape these alternatives.
In September of '25, we released a discussion draft that had 4 alternatives in it, and we kicked off a broader public information engagement process to get feedback on those alternatives.
Once we got feedback on those alternatives, we held another collaborative work session That helped inform primarily what we as BPS staff went into what we called a proposed draft.
And that is what went before the Planning Commission.
That mainly was the comprehensive plan policy amendments and the zoning code, Title 33 zoning code amendments.
The Planning Commission went through their process of hearings and work session deliberations.
Before they came out with their recommendation in March of this year.
Following that, we turned our attention to the Title 17 Capacity Reduction Program and crafting those regulations.
We did a community engagement process around a draft of those regulations through June of this year.
And then we published the proposal in August of this year.
Throughout this whole process, we've engaged our bureau partners, particularly BES Permitting and Development.
We also convened an interagency workgroup with other state agencies, primarily DEQ, to get feedback on, on our proposals.
And then in addition, we engaged tribal governments and nonprofit organizations in the Portland area.
At each of these steps, with the tribal government engagement, we were emailing tribal staff notice of where we were in the process, what the latest draft was available, and our availability to talk about those.
I would say we have been most engaged with tribal staff from the Grand Ronde Tribe and back and forth with them throughout this process leading up even to the council process that we are starting today.
Some key issues that we've heard from all parties.
I think we heard most strongly from the community about wanting to reduce the storage capacity.
Thank you.
In the CEI hub over time and to really push it as far as we can.
From industry, we've heard a lot of concern about those limits and about reducing capacity and how that will affect their flexibility, how it might reduce resilience of the hub overall, might affect other climate programs such as our renewable fuels program.
And then from the rest of Oregon, we've heard concerns.
We've heard concerns and wanting to acknowledge that the decisions that we make here in Portland have an impact on the rest of the state because the hub, you know, provides 90% of the liquid fuels that are consumed in Oregon.
And so we've been sensitive to those concerns as well.
Particularly in terms of regulatory context and how development regulations— we've worked a lot with DEQ, and you'll hear from DEQ later this afternoon around their programs and wanting to ensure that our new rules don't interfere, particularly with DEQ's fuel tank seismic stability program that will require seismic upgrades over the next 10 years.
And so we wanted to make sure, and we've worked a lot with DEQ staff to make sure that these programs work together.
And I think you'll hear about that both from our presentation and from So a little bit about the details before you.
In terms of comprehensive plan policies, you'll see we're making some adjustments to existing policies, and, and also we're bringing forward a set of new policies that are specific to the Critical Energy Infrastructure Hub.
This is an umbrella policy for the critical energy infrastructure hub.
And we have a number of sub-policies that address the key issues, especially as they relate to bulk fuel terminals and what we're looking for to happen in that.
And this is really a balance between safety, seismic upgrades, environmental protection, and at the same time recognizing the economic significance that the hub plays.
And so we're trying to balance those things.
Thank you.
We have a number that speak to a number of different elements that come into play as part of that.
And these are all policy directions that not only inform these actions, but future actions and projects that occur in the hub.
A little bit more detail about the zoning code and building code amendments.
Dan Ryan
Thank you, Mayor.
Tom Armstrong
First, as a starting point, you know, we went through a process from 2016 to 2022 to adopt limits on these fuel terminals.
We started with a prohibition on new fuel terminals, and we currently list the existing fuel terminals from expanding their fossil fuel storage capacity.
At the same time, those terminals are currently allowed unlimited expansion for aviation fuel and renewable fuels and unlimited expansion for transloading infrastructure— the pipes, the offloading racks, the pumps that move the fuel through the system in between the transportation modes.
We allow for the repair and replacement and what we call the reconfiguration of storage tanks.
So that allows the terminals to take a large tank and make it into smaller tanks that allow them flexibility as market demands change.
An important thing that you see in this air photo here is that we define a bulk fossil fuel terminal as a terminal having 2 million gallons of storage capacity.
And what you see in the middle here is, is that is one large tank.
So any, any facility with multiple tanks is going to be classified as a bulk fuel terminal.
The recommended changes before you in the zoning code are to limit the expansion for all fuel types.
And so that sort of takes away the unlimited ability to expand for aviation fuel and for renewable fuels.
We allow some transfers between terminals and some aviation fuel expansion through a Type 3 land use review that includes public notice.
Public comment, a hearings officer decision that is appealable to council.
We are also limiting the expansion of transloading infrastructure, again, with a process there, a Type 3 land use review process as a relief valve for any transloading expansion.
We continue to allow for the repair, replacement, and reconfiguration of the existing storage tanks and infrastructure.
And again, that's the key that sort of lines up with the DEQ seismic stability program and all of the investments and changes that the terminals are going to have to make as a result of those requirements.
There is a recommended building code change.
To Title 24 to require a building permit for structural support for any piping carrying hazardous materials.
This really is sort of to make it explicitly clear that PP&D plays a role that is similar to what is already in the fire code and the role that the Fire Bureau plays.
But we included this at the request of PP&D just to sort of make it explicitly clear of what is required as part of any of those improvements.
Terbs, now for the Title 17 code amendments.
This is the capacity reduction regulation.
We have a— and I'll go through each of these requirements.
The first one is, is we have a capacity reduction requirement that all the terminals must reduce their in-service fuel storage capacity by 20% of what is in service as of January 1st, 2027.
And they have to do that by December of 2036.
And the 2036 date, we selected because we envision that these terminals are going to have to make all of the seismic improvements.
They're going to have to be pulling tanks and capacity offline to do those seismic improvements, and they're going to need that flexibility to— as they move and do the seismic improvements.
But what we want to do is send a clear signal to the terminals that by the time you make all those seismic improvements, You should be— plan to be 20% smaller.
We have a couple of exemptions from that reduction requirement.
The first is storage capacity for a regulated public utility.
One of the terminals out there is a Northwest Natural liquefied natural gas terminal.
It is used for peak wintertime heating demand.
I think that's a good example.
It is a single tank.
It is 7 million gallons of storage capacity, but it is a single tank.
And rather than requiring them to dismantle that tank and make it smaller, we just are not allowing them to expand their storage capacity, but keep that in place.
The second one is for aviation fuel capacity.
And I'll show you in a minute, but aviation fuel is the one fuel type that is expected to grow in demand over the next 25 years.
And so we— and similar to the 5% expansion process, we wanted to preserve that capacity to serve that need as well.
And then the other exemption is for any terminal that actually goes through the Type 3 review process to get additional capacity, that would be exempt from the reduction requirement itself.
And that applies to both any transfers that occur and the aviation fuel storage expansion review.
We have set up in that code a baseline inventory process.
We want to understand where everybody is at today.
The various data sources that we have don't always line up, so we want to make sure that we understand where everybody is as of January 1st, 2027.
And that we would repeat that process in 2036 to ensure everybody has met the reduction requirement.
We have enforcement procedures and penalties, both for those— that inventory and reporting requirement.
The $12,000 per day, $24,000 per day after 30 days is similar to what the DEQ requires for their process that they're currently going forward.
Thank you.
And then in 2036, for a violation of the reduction requirement, we have proposed $0.25 per gallon per day for every gallon that they have not reduced their capacity by.
As a, you know, one of the things that we heard clearly from the community was that these penalties need to be meaningful.
And can't be just written off as a cost of doing business.
We think these levels get us there in terms of that meaningfulness.
Underpinning all of these, how we've calibrated these requirements, is fuel demand modeling.
Again, this gets at the concern that we want to reduce the risk at the hub.
At the same time, we want to continue to provide the fuel that our economy will need going forward.
I think the first one is that when we look back, even, you know, back over the last 30 years, even as Oregon and the region has grown both in terms of population and our economy, we've seen that fuel demand be flat to declining.
So we haven't seen a lot of need for expanding the hub, especially this is Oregon data.
The Washington data looks similar.
And so despite all that growth, we've had a flat, in terms of a flat curve in terms of fuel consumption.
When we look out forward, we're looking at a couple of different sources, but the first one we started with was some fuel consumption forecasts from the federal government.
And this is where you see that there's forecasted decline in petroleum, and, and that includes renewables in there, with the jet fuel being the one component that is expected to increase in demand.
But jet fuel makes up about 10% of the fuel out in the hub today.
We did our own modeling.
We hired Parametrics, a consulting firm here in Portland, to look at the fuel consumption data, look at the policies that are expected to influence fuel demand.
All of our climate carbon reduction policies, and how are those expected to influence the fuel demand.
We ran a number of different policy scenarios looking at fuel consumption and what the hub is expected to provide.
What you see here, the dashed line there is at the end of 2036.
The horizontal line at that 80% level is really what the hub is running at today, about 75 to 80% capacity.
We see a slight increase over the next 5 to 6 years, 7 years of fuel demand, and then we really see our policies start to take hold and really drive down the demand for liquid fuels.
In particular, We've sort of based our proposals on that red line, which we call delayed progress.
So one of the things that we heard a lot is that given our current federal policy environment, you know, the lack of electric vehicle incentives, uncertainty around fuel efficiency requirements, What would that mean to our fuel demand curves?
And so we built into that scenario what we call a delayed progress, a delay in the uptake, a delay, a lower level of EV conversions to sort of, you know, be a hedge against that in our demand curves.
And that really is what we're looking at is that We don't expect a lot of need for expanded capacity in the hub and that we can reduce it over time and, you know, that we're not gonna need that even planning for growth out to 2036.
We took that model, we heard concerns, we asked another consulting firm, Eco Northwest, to do an evaluation of that model.
I think they recognize some of the things that Parametrics did in terms of the uncertainty of where we're at today and, you know, some of the data availability challenges that we face.
But at the end of the day, you know, the model results show that, you know, a potential outcome is that our proposed regulations will not impact the price of fuel.
The other question that we asked Econ Northwest was, well, set that aside, how do fuel price impacts affect the economy, particularly in Oregon?
Regardless of where they come from, whether it's our regulations or foreign policy decisions, how does that affect the economy overall?
I think what they— a couple of key things they found is, you know, consumers face the initial burden of that increased fuel prices, especially lower-income households, especially households and businesses outside of the Portland area that are more dependent on liquid transportation fuels.
Eventually that ripples through the business side.
However, over time, those impacts are— don't have a huge impact on the economy.
What they found was a sustained 10% increase in fuel prices could mean the loss of 4,600 jobs.
For context, there's 1.9 million jobs in Oregon in 2025.
The other thing that they recognize is that there is a feedback loop.
That sustained fuel prices drives behavior change, that people find ways to reduce their fuel demand.
They buy, they drive less, they buy electric vehicles, they figure out ways to reduce those costs.
At the end, where we landed as a proposal to you, Is, um, we think that right now the hub is using about 75% of their existing storage capacity, and that, um, with that, uh, in 2036, when you look out, um, with the fuel demand, especially under that delayed progress scenario, a, a 20% reduction in that storage capacity brings that utilization level up to about 36.
And again, you have before you 2 related ordinances.
It is a package.
They don't need to go together, but they work with each other.
And, you know, again, the record and all of the supporting evidence is in the public communications document.
Thank you.
That will support your decision can be found in eFiles for each of these ordinances.
And that is my presentation today.
I'm going to turn things over to Eli Spivak to talk a little bit about the Planning Commission process.
Eli Spevak
Well, thank you everyone for the opportunity to share the Planning Commission's recommendation in support of the CEI Hub project.
First, some history.
After going through the Planning and Sustainability Commission 7 years ago where I served, City Council first adopted the fossil fuel terminal project in 2019.
The city finally prevailed against all challenges by 2025, 6 years after initial adoption.
Since then, we've learned some things that we should be regulating, including transloading facilities and both fossil and renewable fuels, and also how to go about, how to go about it, such that these new rules go into effect soon rather than being held up for years as happened before.
We also have new partners, including the state, who can regulate things we cannot.
That's a good thing, but also makes things complicated.
The Planning Commission spent 4 months engaging with the CEI Hub project from December of 2025 to March of 2026.
During this time, we received a briefing, heard oral testimony from 63 people, and reviewed over 155 pieces of written testimony.
Then we reconvened for a series of 3 work sessions interspersed with 4 subquorum working groups specific to fuel demand projections, aviation fuels, transloading regulations, and DEQ's seismic stability program.
We brought in experts from DEQ and from PP&D to understand state regulations, data availability, and inspection protocols.
We ended up crafting 5 amendments on the comprehensive plan policies.
And 14 to the zoning code, plus 5 technical amendments.
The vast majority of these passed and became the recommended draft that's in front of you today, and which I'll summarize in a moment.
But first, the big picture.
Virtually all, about 90%, of fossil and renewable fuels used in Oregon are processed through the CEI hub.
This is not sustainable from an economic, environmental, or safety perspective.
We have too many volatile, explosive eggs in one vulnerable basket, And the ground will shake.
From a seismic risk standpoint, the CEI Hub facilities are in the wrong place.
We strongly support efforts to explore alternative locations.
The absence of a single point of accountability complicates that task.
The storage of non-fuel hazardous materials was not part of the scope of this project, and yet the issue poses a significant gap in the regulation of bulk terminals.
There's nothing in the current or proposed code that would limit Bulk fuel terminal operators from building tanks for non-fuel materials such as hot asphalt.
Portland should consider regulating non-fuel hazardous materials at the CEI hub as a follow-up project.
We must rapidly decrease our dependence on fossil fuels.
The CEI hub focuses narrowly on the supply side by regulating storage facilities and transloading facilities.
Yet 40% each of Oregon's greenhouse gas emissions come from the transportation and building sectors, 80% total.
We strongly encourage council to ensure funding, staffing for the new Sustainability and Climate Commission to further the city's climate action goals and decarbonize the sectors that continue to buy and burn what the CEI Hub sells.
So here are the amendments we made.
In the comprehensive plan policies, we added language to the economic significance policy that articulates not just how these facilities support the economy, but also the ongoing economic risk of concentrating such facilities in a natural hazard risk area.
We added a policy on community resilience that addresses environmental and public health risks from these facilities.
And we added a new policy, 3.83-I, to evaluate and consider regulating nonfuel hazardous materials stored at bulk terminals, thus queuing up a follow-up project.
In the zoning code, we ensured that when a tank is replaced, its associated transloading facilities, including loading docks, If someone wants to expand those, they have to go through a separate discretionary review.
In several places, we added requirements for not just having a DEQ risk mitigation implementation plan, but also providing a letter from DEQ confirming the applicant is currently in compliance with that plan.
We added language to ensure that any relocated tank must go in a lower seismic risk location, and we added criteria that require transloading facilities to meet all of the requirements that we've outlined.
Oregon thank you.
Structural Specialty Code Risk Category 4 where applicable.
So not just the tanks have to meet those standards, but transloading facilities do as well, because if the earthquake happens, any one of those things can leak.
If the codes don't apply, then you have to have a 1-barrel maximum spillage allowed in the case of a seismic event.
We added new approval criteria for any new tanks and transloading facilities to minimize and mitigate and mitigate risks to public health and safety from wildfire.
We added to the transloading expansion review a requirement to demonstrate significant public benefits that include at least one non-economic benefit to the region.
So you can't just expand transloading showing economic benefits.
That's not sufficient.
You have to show additional benefits as well.
We added an exception to the prohibition on new fuels for aviation fuel up to 5% increase, as Tom mentioned earlier, subject to a discretionary land use review.
Thank you.
And we had an amendment that would have allowed a 5% increase by right.
That did not pass.
For this, we created the Aviation Fuel Storage Tank Capacity Expansion Review Process.
That's a mouthful.
Staff helped with this.
With a half dozen approval criteria, including if you're going to have more aviation fuel capacity, you'd be required to demonstrate— to do a fuel demand analysis and demonstrate that there's no practical alternative location outside the CEI hub.
Any such review, since it's a Type 3, would end up back with City Council, with you.
We adopted an amendment to notify neighbors of any proposed transloading facilities, new structures, or tank demolitions, not just new tanks, because neighbors want to know what's happening there.
And we prepared an amendment to regulate non-fuel hazardous substance storage tanks, but we dropped that in favor of adopting the comprehensive plan policy I mentioned before and suggesting the City Council move on this and soon.
Thank you.
We appreciate staff support over this entire process and your attention to the project.
Now the recommended draft is now in your hands.
We've done our best with it.
You now have the opportunity to stick with it or improve upon it with your final bite at the apple.
Tom Armstrong
That's mine.
Jamie Dunphy
Thank you all.
Colleagues, if there's any technical or clarifying questions at this time for our, our staff here, we will have more thorough back and forth at the last part of this.
But if they have any questions right now while these folks are here, and they will be sticking around to the end.
So Councilor Green and then Councilor Novick.
Mitch Green
Thanks.
I'm not sure if this is quick technical or more appropriate for the back end.
So feel free to say this is more appropriate for the back end.
Okay.
Thanks for the presentation, Tom.
I just have a quick clarifying question.
So you sort of In this update, you indicated that there will be reporting the results of the data you'll be collecting every 3 years to the City Council.
And we wouldn't start this drawdown until 2036.
And there was a sort of assertion that we have 75%, we're only utilizing 75%.
So there seems to indicate 25% surplus capacity.
Tom Armstrong
So can you just walk us through why we wouldn't start that drawdown earlier if we've got that data that sort of shows yeah, because, um, in order to comply with the DEQ seismic stability program, they're going to have to take some of that capacity offline to do the seismic improvements.
And so while that is coming offline, you know, think of it, take 20% offline, we still have enough to continue to supply the fuel we need to run the city.
So you're saying today and over the next 10 years.
And so it's, it's, you know, you bring some offline, you improve it, and you keep moving through the system.
But that last, you know, all we're saying to the terminals is that as you plan all those improvements, the last little bit, um, comes offline and, and you have to take it offline out of service.
You don't We think, we think they need the flexibility to make those improvements and continue to supply the fuel you need— we need, because you— that fuel demand curves are pretty flat out to 2036, and then they start to drop off.
Mitch Green
Okay, that, that's helpful.
That clarifies.
And you, you think they need until 2036 to do that?
Tom Armstrong
That is— you'll hear that is the state of the art.
The state requirement, they'll— once their improvement plans are approved, they have 10 years to implement it.
We expect those approvals actually to not come in until next year.
So the '36 date is probably a 9-year improvement plan for the terminals.
Mitch Green
Okay, thanks.
I think that's about all I get for a quick clarifying.
So thanks.
Jamie Dunphy
We will have more time for back and forth.
Thank you very much, Councilor Green.
Councilor Novick.
Steve Novick
I just want to note that Svetlana Lazareva from DEQ is online in order to talk about DEQ's retrofit program.
Jamie Dunphy
She presents next.
Steve Novick
Yes, but she has a hard stop at 3.
Okay.
So I'm actually begging my colleagues to save their questions for BPS till later because we can talk to them at any time.
Jamie Dunphy
Thank you, Councilor.
Well, actually, yeah, I will go ahead and I'll keep the folks in the queue as is.
Councilor Pirtle-Guiney, then Koyama Lane, and then Clark.
But we're going to go to DEQ next.
So thank you all.
We're going to now move to a presentation from Svetlana Lazarev.
I'm sorry, Svetlana.
Heather King
Hi.
Jamie Dunphy
Seismic stability and hazardous waste manager with the Department of Environmental Quality.
You know, our legislation is at the city level, is in parallel and conversation with ongoing work at the state level.
And so as Councilor Novick had requested, Manager Lazarev is now here to present an update on the substance and status of these state actions.
Take it away, Svetlana.
Svetlana Lazarev
Good afternoon.
Can you see my slides?
Jamie Dunphy
Yes, we can.
Svetlana Lazarev
They're in presentation mode and everything?
Jamie Dunphy
Everything looks good.
Svetlana Lazarev
All right then.
Good afternoon again.
And for the record, my name is Svetlana Lazarev, and I manage the Fuel Tank Seismic Stability Program at the Department of Environmental Quality.
Our program is now entering its 4th year.
I appreciate the invitation to be here today and to provide you with a high-level update.
My goal is to cover essential context and key operational milestones that define our progress so far, and I have 10 slides to help me do that.
If there is time for clarifying questions, I would be happy to answer those.
Thank you.
This slide highlights the primary cluster of fuel terminals within Northwest Portland's critical energy infrastructure hub.
The individual facilities are shown in orange along the river, while there are 4 additional facilities located outside this zone regulated by the program.
Our focus today is the CEI hub.
The facilities are built, like Tom said, on highly unstable ground.
Originally wetlands, now filled with dredged sediments, making them exceptionally prone to liquefaction and lateral spreading during a seismic event.
Compounding this geographic risk is the age of its infrastructure itself.
An overwhelming 98% of tanks were constructed prior to 1993.
And the year 1993 is important because it marks the first time building codes were updated to account for a Cascadia megaquake threat.
To address these vulnerabilities, Senate Bill 1567 established DEQ's Seismic Stability Program.
The facilities listed on the right are required to, required to submit comprehensive seismic vulnerability assessments to DEQ for review.
Following DEQ's approval, each facility must develop a targeted risk mitigation implementation plan.
Thank you.
Once DEQ approves these mitigations, the facilities are mandated to fully implement their plans within a 1-year timeframe— I'm sorry, within a 10-year timeframe, ensuring transition toward a more resilient infrastructure.
The seismic vulnerability assessment is divided into 3 components: the soil geotechnical assessment, the structural evaluation, and the safety systems analysis.
In general, this is sequential and highly iterative engineering process.
The assessments begin by facilities geotechnical engineers characterizing the site soil and establishing baseline seismic forces.
Once the ground conditions are defined, facilities structural engineers evaluate structures and safety systems to see how they will withstand an earthquake allowing them to pinpoint specific structural deficiencies.
From there, the process loops to reconcile geotechnical and structural findings.
For example, facility geotechnical engineers may need to go back and do additional analysis or consider potential soil mitigation options.
And structural engineers might consider how structures may be improved to withstand moving soil.
DEQ does not prescribe assessment or mitigation methods.
Those are up to facilities to consider and propose.
DEQ engineering team performs rigorous peer review of facility engineers' work and propose deeper analysis if necessary.
This back-and-forth review continues until the assessment is comprehensive and provides a reliable foundation for the next phase, the risk mitigation implementation plan.
Thank you.
Once DEQ approves the seismic vulnerability assessment, the clock begins for the next phase.
Facilities will have 6 months to develop and submit their risk mitigation implementation plans.
Mitigation will be implemented through a phased approach.
Each facility's plan must detail specific actionable mitigation measures that can be successfully completed at the 1-year, 3-year, and 5-year marks.
Thank you.
These timelines must be accompanied by explanation of the prioritization to ensure that the highest-risk vulnerabilities are addressed first.
When it comes to primary and secondary containment, facilities have 2 compliance pathways.
DEQ views both of these options as providing equivalent level of safety.
The first pathway is designed for existing equipment.
Focusing on retrofitting and anchoring current structures to withstand seismic events.
This applies to tanks and secondary containment structures such as walls, basins, berms, and other systems designed to contain a spill.
The secondary pathway applies to new construction, new tanks and containment systems, ensuring that future infrastructure meets the most stringent modern code requirements, which is Risk Category 4 provided in American Society of Civil Engineers code.
This slide is to give you a real-world example of this program in action.
So this picture is from the Portland International Airport fuel facility, which has been uniquely ahead of the curve.
Curve with their seismic vulnerability assessment and risk mitigation implementation plan.
They began investigating the seismic vulnerability of their facility well before GQ's seismic stability program was formally established.
Based on their initial assessment, their original plan was to replace 2 of the 3 existing tanks.
However, once our program was established, Rigorous SVE criteria required them to push their engineering analysis a bit further.
As a result of that deeper evaluation, they shifted their strategy and, and are now rebuilding all 3 tanks to meet risk category 4 standards.
Looking at the program implementation timeline, they're currently in a phase of this intensive Analytical work.
In-depth engineering assessments are happening at most of the CI facilities, each on its own timeline.
A few seismic vulnerability assessments are scheduled to be submitted to DEQ before the end of this year, and the majority are slated for completion in 2027.
Last July, we released a voluntary report, and it has information about all facilities' timelines.
Thank you.
And based on this timeline, we anticipate the mitigation to last approximately through 2038 and maybe extend a few years beyond that.
In the 2026 legislative session, lawmakers expanded our program's authority by passing House Bill 4100.
We are currently in the middle of the rulemaking process to implement these new statutory requirements.
This update centers entirely on financial assurance and requires facilities to obtain a certificate of financial responsibility from DEQ by demonstrating their capability to cover spill-related damages up to $300 million.
A major focus of the ongoing stakeholder conversations is the process of how local municipalities, the city, and the county will be compensated for emergency response and cleanup expenses in the event of a major spill.
The law requires at least equal participation of community, local governments, and regulated industry representatives on the Rules Advisory Committee.
The City of Portland interests are represented by Tom Armstrong on the Rules Advisory Committee.
And this is my last slide.
And in closing, the progress we're able to make in seismic stability program is a direct result of the ongoing community, regulated industry, and local governments collaboration.
And for that, we are—.
Thank you.
Deeply grateful.
And this is the end of my, um, prepared presentation, and if time allows, I'd be happy to answer clarifying questions.
Jamie Dunphy
Thank you very much, Svetlana.
Uh, colleagues who were in the queue for BPS staff, I will come back to you.
I just want to very quickly check and see if Councilor Clark— is your question for— okay, Councilor Novick, your question for Svetlana?
Okay.
Steve Novick
Yes, thank you, Mr. President.
2 Quick questions.
Um, one, you were talking about how there's 2 options.
One is to have a fancy new or renovated Category 4 tank, or to have something like a containment wall.
And I was asking you earlier, how would a containment wall survive if there— it's on liquefied soil?
And I think you said, well, it wouldn't.
So that's why we're having to do soil mitigation.
And I think you said that it's actually possible to, like, densify the soil.
Is that right?
Svetlana Lazarev
It is possible.
Methodologies to improve soil exist.
And so those basically focus on improve— like making the soil denser, right, and improving drainage.
We do not require that facilities do specific mitigation measures.
We do not require that they do either soil mitigation or structure mitigation.
They can consider their options, and their proposal has to show us that they— whatever setup they choose, whether they choose to improve the soil Or whether they choose to improve the situation on site in other ways.
They just have to show us that they will either not spill more than 42 gallons per containment system or that any new construction they build is to risk category 4.
Steve Novick
Thank you.
And I think you might have already said this, but in terms of when you expect this process to be completed and the retrofits actually to be done, I think you might have said that's like 2038, 2040, somewhere like that.
Svetlana Lazarev
I think, yeah, based on the current timeline, we anticipate all of the final comprehensive assessments be submitted by the end of 2027.
Then the facilities have 6 months— well, DQ have a few months to review, and then facilities have 6 months, and at the end of the 6 months, the mitigation begins.
Thank you.
Yes, 2038.
I think it's realistic right now, potentially going a couple of years beyond that.
Jamie Dunphy
Okay, thank you very much, Elana.
I don't see anybody else in the queue for questions, so thank you for this information today.
Steve Novick
Thank you.
Jamie Dunphy
I'd like to ask our BPS staff to come back up for a couple of— we have 3, uh, councilors who have some clarifying questions before we move on to our future, our, uh, additional panels.
Uh, it'll be Councilor Pirtle-Guiney, followed by Koyama Lane, and then Vice President Clark.
Elana Pirtle-Guiney
Thank you, Council President.
And, um, before I move on, thank you, Svetlana, for bringing us the, the updates on how things are going at the state.
I appreciate it.
For our BPS folks, I am wondering if the conversation was had about longer-term reductions after the 2036 point.
I understand why you're looking at that for the first set of reductions.
Was there a conversation about stair-step reductions that continued past that?
And if there was, why did we decide not to move in a longer-term direction?
Tom Armstrong
Yeah, so I think the further out we get with the forecasts, the more uncertainty there is.
And we were very focused on all of the seismic upgrades and investments that the terminals are going to make over the next 10 years.
So we really focused on that timeframe.
And just given the uncertainty on those outer years, we just didn't go there.
And it sort of, I think, was in a— one of Councilor Novick's questions about reporting back in the interim reporting requirements, is that opportunity to make those adjustments if needed as we get more clarity on those out years.
Elana Pirtle-Guiney
When you talk about clarity, it sounds like the decision was made based on a lack of clarity about what the natural reduction based on other policies would be, and therefore what we could reduce without increasing prices?
Correct.
Okay.
And then you said that there was an exemption for regulated public utilities because there is one, it's one tank, it has a critical use for heating and safety in the winter.
Are there other utilities or other uses that, um, that could qualify under that exemption?
What I'm wondering is, is there a risk that a public utility could purchase a different property, a different tank, and that exemption could actually be expanded over time?
Tom Armstrong
I don't know of any Public utilities that are in the liquid fuel business or would get into the liquid fuel business.
As a public utility, they have to go through the Public Utility Commission with their integrated resource plans every 7 years.
Elana Pirtle-Guiney
State definition?
Steve Novick
Yeah.
Elana Pirtle-Guiney
Okay.
And do we have— is the exemption for current tanks for public utilities, meaning Northwest Natural couldn't expand their capacity on site in other spaces, or is it just an exemption for— is it just an exemption for that location, or is it an exemption for their work anywhere in the CEI have more broadly?
Tom Armstrong
Uh, it is an exemption.
Let's see.
Patricia Diefenderfer
Reduction program, right?
Only?
Tom Armstrong
Well, as it— so it applies to bulk fuel terminals anywhere in the city.
Elana Pirtle-Guiney
Okay.
Tom Armstrong
Um, at that site, um, under current rules, uh, they are prohibited from expanding their fossil fuel These new rules would prevent them from an expansion of storage capacity and transloading capacity for renewable gas, something that met the terms of renewable.
Elana Pirtle-Guiney
Not exempt from the expansion, they're just exempt from the reduction, or they're not exempt from the prohibition on expansion.
Tom Armstrong
They are subject to the limits on expansion.
We're saying in terms of the reduction, so they can't expand, Even for renewable gas under these new rules.
And, and then the— that leaves them with the existing tank that would be exempt from the reduction only.
Elana Pirtle-Guiney
I thought they were exempt from the limitation on expansion as well.
Thank you for clarifying.
Steve Novick
No.
Eric Engstrom
Thank you, Claire.
Jamie Dunphy
Councilor Pirtle-Guiney.
Councilor Koyama Lane has said she will come back at the end, so we'll go to Vice President Clark.
Olivia Clark
Thank you, Council President.
Um, thank you for the presentation.
Just a couple of, um, questions.
First, about the Eco Northwest evaluation.
I just— what, um, is tank turn rates?
What does that mean?
Tom Armstrong
Yeah, um, and what that means is, uh, how often do they fill up a tank, empty it, and fill it again?
And that, that really determines the, the amount of fuel that can— the volume of fuel that can move through the system.
And so what we were looking at is how much fuel is— we think is moving through the system today and how that changes over time and how fast can they move that through and sort of trying to— that determines the overall capacity of the hub.
Olivia Clark
Okay.
Tom Armstrong
And so we were— that tank turn rate becomes a key assumption.
Dan Ryan
Right.
Tom Armstrong
It also is one that— and I think Eco Northwest and Parametrics both, we could use more data to be able to really calibrate.
We think that the 12, the monthly, each tank gets filled up and emptied on average a month.
That, that, that is a pretty good assumption to base it on for now.
As part of the reduction program, in addition to the tank inventory, we're asking the terminals to report 3 years of actual monthly flow data so that we could better calibrate that aspect of the, of the, the model, and that we would report back to you for any calibration adjustment.
Nikki Mandel
Thank you.
Olivia Clark
Thanks.
Is there anything that requires them to provide that to us?
Tom Armstrong
Not currently today.
This program would require that reporting.
We've seen inconsistent data reported both to the State Fire Marshal's Office and to DEQ as part of the air quality permitting.
This again would just provide that consistency across all 11 terminals.
So we really understand how the fuel is flowing through the system.
Olivia Clark
It seems really, really important.
And the air quality issue aside, someday we ought to talk about that too, but that's a whole other issue.
Another question about the Eco Northwest evaluation.
We talk about that feedback loop.
That's the very last bullet.
Sustained fuel price increases also tend to accelerate behavior changes.
Did they provide any detail around that?
Because I remember that when there was a calculation sometime back at TriMet that when gasoline prices hit $5 a gallon, there was an equivalent increase in transit ridership.
And I know transit ridership has gone up slightly here recently, but did they dig into that at all?
Tom Armstrong
No, they did not.
They just provided— acknowledged that that feedback loop exists, but nothing to quantify.
What we might forecast there.
Olivia Clark
I think it's important.
Elana Pirtle-Guiney
Great.
Olivia Clark
Just skip to the key issues list that you have for Oregon.
I just wanted to know, how did you assess the statewide issues?
Who did you talk to about that?
How did you ascertain that list?
Tom Armstrong
So various state agencies, particularly the Department of Energy, and we cite one of their energy— recent energy strategies.
Documents as, as, you know, one piece of evidence showing an expected decline in liquid fuel demand.
But primarily we've engaged with the Department of Energy.
We've heard from the Department of Aviation.
We've heard from other airports throughout Oregon that get their jet fuel from the CI Hub.
And You know, that, that's been the primary contact.
Olivia Clark
And not an economic development agency or DEQ or—.
Tom Armstrong
Well, we've, we've engaged with DEQ, you know, trying to make sure we're compatible with the seismic stability program and, and those responsibilities.
Um, I can't recall if we've received anything from Business Oregon as of yet, um, but I think the general thank you.
The other theme has been, and from a few state legislature— legislators that have inquired, is a perception that somehow these limits and reduction would result in fuel shortages for the rest of the state.
And what we've tried to show with these fuel forecasts is that won't be the case, or we don't think that that will be the case.
Olivia Clark
Thanks, Tom.
Jamie Dunphy
Thank you, Vice President Clark.
Uh, Councilor Green.
Mitch Green
Thank you, Council President.
Um, just another quick question, uh, Tom.
Um, maybe it's not quick, I don't know, but, um, can you give me a sense of the time period by which the demand forecasts were being developed for this, the fuel demand forecasts?
Tom Armstrong
Um, yes.
So last summer-fall, we worked with Parametrics on the initial fuel demand forecast.
We went through the Planning Commission process.
We just delivered yesterday an update to the Parametrics.
When we got out into the community, particularly around the proposed reduction, Um, rules.
Uh, some of the feedback we've got is like, gee, you know, are there more recent forecasts have come out?
Steve Novick
We should—.
Tom Armstrong
There's— there was now 2024 data available from the federal government.
Um, and, and then I think most importantly, um, we know that a certain amount, a certain segment of fuel, it's about 10% of the fuel goes through the hub and then goes upriver.
But what we heard from them, and we got a contact and a source from the Army Corps of Engineers that allowed us to quantify that fuel flow going upriver.
And at that point, we re-engaged Parametrics this summer to update their model to include that.
And those adjustments and adjustments for more recent population growth forecasts to plug that all into the model.
I think all that, in addition to that, we made adjustments, 2 adjustments on the storage side.
One is we discovered that the Northwest Natural tank was part of the calculation, so we pulled that out.
But we also brought online the Zenith crude oil storage because it's planned to be— they're planned to get off out of the crude oil business next October, and that that capacity would be available for fuel.
And so all of those changes, we sort of wound up in the same place.
And the numbers you saw today, you know, going from 75% to 91% efficiency reflect all of those model updates, which is, you know, sort of like why we stand by our work and our recommendation of that 20% reduction.
Mitch Green
I appreciate that clarification, and I'm a little bit familiar with the parametric style modeling.
Um, sort of like, it's almost like, here's your topology of the total demand across all these industries.
Here's what your assumption for growth rate is, and then you let the model solve for how much fuel you need.
I think that— so 2024 is sort of like the update of the end of the data period where you're training the model on the data.
Where I'm going with this is all that happens before February of 2026, which is when a conflict starts in the Gulf.
Yeah.
Which more or less doubles jet fuel prices dramatically.
It's a— and, you know, I guess there's a question of how long does that last, but I'm just trying to sort of level set, make sure that recent experience, that doesn't change the fundamentals of the model, or is it something that's just kind of like, well, who could possibly forecast geopolitical conflict?
Tom Armstrong
I think it's more of that, and the fact that the available data to us And, you know, federal government 2024 data.
I think the actually having the terminals report directly to us the last 3 years of the data might give us some insight.
I think that's also why in the ordinance we have the report back to you all in 2028 and 2031.
I think the last 3 years is a little bit late.
So that we can continue to monitor how these events beyond our control are influencing the demand for fuels.
Mitch Green
Thank you.
And I just want to be crystal clear, as a person who used to forecast things, I am not being critical of your methods.
It's really hard.
You've got a robust approach.
What I'm trying to do now is sort of tie together the potential change in the structure of that market.
It might be a sort of thing for us to think about as a body when we contemplate fuel demand.
I think that, that's it for now.
Thanks.
Jamie Dunphy
Thank you very much, Councilor Green.
Councilor Novick.
Steve Novick
Yeah, I just wanted to flag, since you talked about the Department of Energy, that the Department of Energy submitted a couple of letters expressing some concerns about our approach, and we can maybe get into that later, but I just wanted to note that.
Jamie Dunphy
Thank you very much.
Okay, thank you very much.
To the BPS staff, uh, you're welcome to go sit down, but don't go too far because we will need you a little later.
Um, colleagues, we're now going to enter a 3-section panel, uh, from interested and engaged external advocates on this topic.
These groups have been actively engaged in this legislation for many months.
In the interest of public transparency, we've invited a balanced panel to express their perspectives on the record.
To be clear, council will continue to take public testimony on these items at our hearing on September 24th at 2:00 PM, where all individuals are encouraged to share their perspectives and opinions.
We are first going to hear from a coalition of environmental groups for 20 minutes.
We will then hear from a representative from the Portland Metro Chamber for 10 minutes, and we will close with a presentation from the Western States Petroleum Association for 10 minutes.
We will limit Q&A on these presentations to clarifying questions also.
We will then take a 15-minute break To use the restroom and then return back to open council discussion with BPS staff available for questions.
I'm going to turn it over to Councilor Green for a couple of introductory remarks.
Mitch Green
Thank you so much, and thanks for accommodating this, this style and format.
I think it's really good for public process.
I just want to thank the bureau and the community coalition for spending the entire summer and beyond actually Probably decades here, through a deep engagement in this planning process.
The stakes are really high.
And so you guys have all been really committed to it.
I look forward to this conversation.
And as Eli Spivak from the Planning Commission suggested, the ball's in our court now.
And so if we want to contemplate amendments that strengthen the proposal, I'm going to be very curious in bringing those forward.
So thank you so much.
Dan Ryan
And I look forward to the discussion.
Patricia Diefenderfer
Thank you.
Jamie Dunphy
Yeah, thank you very much.
I'd like to invite up Marnie Glickman, Heather King, David Labbe, Jamarion Malley, and Nikki Mandel to the dais.
Y'all have 20 minutes.
My notes don't say y'all, I said that part.
Olivia Clark
Thank you.
Heather King
Sorry, technical difficulties.
Jamie Dunphy
Oh, all good.
Thank you very much.
Take it away.
Heather King
Uh, good afternoon, councilors.
Thank you for the opportunity to be here today and present this, uh, to you.
My name is Heather King.
I'm the co-executive director and Lower Willamette Riverkeeper at Willamette Riverkeeper.
Cherie Spock
And my name is Dr. Cherie Spock, and I'm the climate policy director at 350 PDX.
And we also have a panel of experts here with us who have kind of done a deep dive on some of the different areas of this policy, as well as a lawyer from Crag Law Center.
So we have Marnie Glickman from Braided River Campaign, Nikki Mandel, and David Labbe from the CEI Hub Task Force, and we also have Eric Riston from Crag Law Center to answer questions.
We're here today on behalf of the CEI Hub Community Coalition to talk about the amendments that we're asking you to include in the final CEI Hub policy package.
We have asked several members of council to formally bring forward these amendments for consideration and adoption.
But before we get into the amendments themselves, we want to start at a place I think we can all agree.
Heather King
Portland's comprehensive plan is built around 5 guiding principles: economic prosperity and human health, environmental health, resilience, Councilor Smith.
Thank you, Mayor.
I'm pleased to be here today to talk about the proposed ordinance.
And this is how we accomplish this together.
As one of our coalition members often reminds us, unity makes us stronger.
Cherie Spock
And that's really the story of this coalition— community coming together, finding common ground, and using our collective voice to create change.
The coalition itself reflects that idea of coming together.
We are more than 20 organizations along with concerned community members meeting every week since May 2025, and much work, as has been mentioned, for the decade before.
We come to this issue from a variety of places.
We represent environmental organizations, neighborhood and community groups, public health advocates, labor unions, climate organizations, and people who simply care deeply about what happens in their community.
That brings us to the principles that guide the amendments we're asking you to consider.
First and foremost, city policy should reduce risk and increase safety.
And I want to be very clear about something you're likely to hear differently today.
We're not asking the city to remove Oregon's fuel supply from the CEI hub.
We know Oregon needs fuel.
What we're asking for is a smart, responsible drawdown of fuel storage as fuel use declines, one that reduces the amount of flammable and combustible material concentrated at the hub while making sure Oregon continues to have what it needs.
And we believe the way to do that is through data, not guesswork.
Decisions about reducing or modifying increasing fuel storage should be based on the best available verifiable data.
City policy should align with related state regulations, and City Council should retain oversight of major decisions with meaningful opportunities for public participation.
Those aren't radical principles.
Safety, good data, regulatory consistency, public accountability, and making sure Oregon has the fuel it needs.
That's the framework behind everything we're asking you to consider today.
It's also important to remember, remember, we didn't arrive at this conversation today.
Portland has been grappling with the risks and the future of the CEI hub for years.
The city acted to restrict new fossil fuel infrastructure in 2016.
That's been a decade.
And again in 2019.
The city—.
The work continued through the city's FEMA hazard mitigation grant, which specifically called for additional restrictions on fossil fuel terminals and stronger natural hazard policies in the comprehensive plan.
And throughout the current policy process, community members have shown up organizing forums, providing detailed testimony, participating in meetings, and engaging with BPS and council members.
We thank all of you who have encouraged us and who have told us this is how our new form of representative government is supposed to work, who have told us not just to testify but to draft suggested amendments for council consideration.
Thank you.
And we offer our appreciation and gratitude for the immense amount of work that has been done by BPS and the Planning Commission to get us to this point.
So today isn't the beginning of the conversation.
It's an opportunity to turn years of work by the city, by technical experts, and by the community into strong, sensible policy that actually moves Portland toward the 5 principles we started with in the comprehensive plan.
Thank you.
Economic prosperity, human health, environmental health, resilience, and equity.
Heather King
That brings us to the comprehensive plan amendments.
Our first request is really about establishing a shared starting point.
The CEI hub presents 2 realities that are widely acknowledged.
It's vulnerable.
A tremendous amount of flammable, combustible, and toxic material is concentrated on Portland's waterfront.
It's on liquefiable soils, subject to multiple natural hazards, and much of it is an aging infrastructure.
And it's also economically significant.
The hub currently holds the vast majority of Oregon's liquid fuel supply and plays an important role in both Portland and Oregon's economies.
Both of these things can be and are true.
Our amendment simply asks the comprehensive plan to state that clearly.
From that shared understanding, we can talk honestly about the challenge ahead: reducing risk and fuel storage over time, strengthening emergency preparedness, protecting human and environmental health, and building community resilience while recognizing the hub's economic goal.
That is a common ground from which we believe strong, The second comprehensive plan amendment is about making sure the city gives itself clear direction.
The current language says that the city should reduce risk at the CEI hub, and we agree with that.
But for the risk— for a risk of this magnitude, the city needs more than a statement of concern.
We're asking council to strengthen this language so the city commits to leadership material resources, goals, and progress monitoring.
In other words, don't just name the risk, build the policy foundation to reduce it.
That is why we support stronger language throughout this section, moving from passive words like support and recognize to more directive words like reduce, mitigate, prohibit, and implement.
Cherie Spock
Now we move from the comprehensive plan into the zoning code amendments.
The first zoning issue is definition.
Our position is straightforward.
If a product stored at the hub poses danger because it is flammable, combustible, and/or toxic, city policy should regulate that danger consistently.
That means using the same definition of fuel in Title 33 and Title 17 And aligning that definition with the state DEQ fuel tank seismic stability definition.
This is not about expanding regulation for the sake of regulation.
It is about making sure flammable and combustible products at the hub do not fall through the definitional cracks.
The next amendment is about consistency.
Right now, the proposal uses multiple review pathways.
We're asking for one inclusive review protocol for tank and transloading development.
Whether something is called new construction, an upgrade, a retrofit, or an expansion, the same core questions should apply.
Does it meet the highest seismic design standard?
Is there verified evidence of unmet need in Oregon and the existing Columbia River service area?
Does it avoid increasing total fuel capacity at the hub?
Thank you.
Does it provide a clear public benefit using defined criteria?
That is what sensible policy looks like: clear standards applied consistently.
This slide follows directly from the last one.
If the goal is risk reduction, the policy should not preserve unnecessary pathways to expansion.
The coalition is asking the council.
To remove special exemptions for storage tank capacity transfer, transloading expansion, and aviation fuel expansion.
If there is a legitimate unmet need, expansion can still be considered through the inclusive review protocol we just described.
What we're asking council to remove are the separate exemptions that allow expansion outside that consistent review.
Thank you.
Because otherwise we risk adopting a policy that says risk reduction on one page while creating exceptions that can increase risk on another.
We're asking for policy that reduces risk across the board.
The next amendment is about public notice.
Communities that may be affected by toxic releases or increased fuel transportation should know when major proposals are moving forward.
The coalition is asking to expand neighborhood contact requirements to include additional neighborhoods, community coalitions, educational institutions, Portland Public Schools, and an open-access newspaper of record.
This is where equity shows up in the process.
People cannot meaningfully participate in decisions they do not know are happening.
Tom Armstrong
Second.
Heather King
Our next section is about fuel reduction, and I want to pause here because this is where our position is most likely to be mischaracterized.
We are not asking Council to create fuel shortages.
We are asking for smart, data-driven drawdown that reduces risk, increases safety, and makes sure that Oregon has what it needs.
So let's start with what we mean by a smart drawdown.
The city proposal calls for a one-time across-the-board 20% reduction in tank shell capacity by 2036.
We support the goal of reducing risk, but we believe the reduction itself should be based on what the data actually tells us Oregon needs.
The facilities will be reporting tank data.
The state of Oregon has fuel consumption data.
Let's use it.
Compare what is actually being stored at the hub with what Oregon is actually consuming.
Councilmember Loretta Smith.
And use that information to identify opportunities to safely reduce excess storage.
And let me emphasize again, any reduction must ensure that Oregon continues to have the transportation fuel it needs.
That's not a competing goal.
That's part of what makes this a responsible drawdown.
This distinction between tank capacity and actual fuel volume is important.
Under the city's proposal, Facilities will already be required to report both their built tank capacities and information about how those tanks are actually being used, including monthly throughput and average and peak fill levels by fuel type.
Those are not the same thing.
A tank's built capacity tells us how much it could hold.
The fill data tells us how much is actually being stored in the tanks on average over a 3-year period.
If our goal is actually to reduce risk without creating shortages, we need both pieces of information.
Our amendment creates a straightforward iterative process.
After facilities submit their data, BPS would prepare a fuel reduction plan report for City Council.
That report would compare actual facility data with Oregon fuel consumption data, including looking at different fuel types.
Gasoline, diesel, jet fuel, and other fuel types, because demand isn't necessarily the same for each.
BPS would then identify whether additional storage reductions are possible and bring a proposal back to City Council for approval.
So this isn't an arbitrary percentage established today and applied forever.
It's a recurring process that allows the city to respond in— to real-world changes in fuel use Over time.
As Oregon's needs change, the data changes, and the city decisions should change with it.
And there are important safeguards built into that process.
First, and again, fuel reductions may not result in Oregon fuel shortages.
Second, reductions can be considered by individual fuel type across fuels collectively, so the process can respond to actual differences in demand.
Third, the city would take into account reductions already planned through the facility's state-approved risk mitigation improvement plan.
We don't need the city and state working at cross purposes.
And finally, these— finally, these decisions come back to City Council with public notification and an opportunity for public testimony.
That's important to us.
Thank you.
As fuel use changes, there will be decisions to make about how much storage Oregon needs and how much risk Portland should continue to carry.
Those decisions should be made transparently using real data with council oversight and a public voice in the process.
This amendment gets at what we actually mean when we use the word reduction.
Under the current proposal, There's a problem with that.
If that tank was sitting largely empty to begin with, taking it out of service may reduce theoretical storage capacity without meaningfully reducing the amount of fuel actually stored at the hub.
And that's not the outcome any of us are trying to achieve.
Our amendment defines reduction based on decreasing the average monthly volume of fuel stored at the tank.
Councilmember Herbold.
Whether that's accomplished by taking tanks out of service or reducing their allowed working capacity, because ultimately this is about safety.
A reduction on paper doesn't reduce risk.
Less hazardous fuel physically present at the hub does.
You'll recognize this amendment from the zoning code discussion.
We're asking for the same definition of fuel here in Title 17 that we asked for in Title 18.
And finally, accountability.
If we're going to establish these requirements, they need to have some teeth.
The current proposal says that the city administrator may establish requirements for fuel tank seismic stability.
Thank Impose you.
Penalties when a terminal fails to comply or misrepresents the required information.
We're asking you to change one very important word.
Change may to shall.
If compliance with these safety requirements is mandatory, enforcement for noncompliance shouldn't be optional.
Cherie Spock
And so in closing, I want to bring us back to where we started.
The 5 guiding principles in the comprehensive plan: economic prosperity, human health, environmental health, resilience, and equity.
We believe the amendments we're suggesting advance all 5.
We're not asking Portland to choose between Portland's safety and Oregon's economy.
We're asking for a policy smart enough to protect both.
We're asking you to prevent new risk While addressing the risk that already exists.
We're asking for a smart, responsible drawdown of fuel storage driven by actual data, responsive to Oregon's fuel needs, and capable of adapting as those needs change.
And we're asking for transparency, accountability, and a meaningful community voice in the decisions that come next.
More than 20 organizations and concerned community members have spent well over a year doing the hard work of finding common ground around these recommendations.
Thank you.
We ask you to take that work seriously and incorporate these amendments into the final policy package.
Unity makes us stronger.
We believe these amendments make Portland stronger, safer, and better prepared for the future.
Thank you, and we're happy to turn it over to the rest of the panel for your questions.
Jamie Dunphy
Thank you very much, colleagues.
If we— this is not an opportunity for debate, but if you have any questions, clarifying questions or comments, This would be a good time.
Councilor Novick and then Councilor Koyama Lane.
Steve Novick
Yeah, I mean, um, there's a big difference in approach between reducing the amount of fuel and reducing the number of tanks, and I was just wondering if you had had conversations with the BPS staff about why they were going with number of tanks as opposed to amount of fuel.
David Labbe
Sure, I can take that one.
We've had multiple conversations, actually very productive conversations with BPS, Tom Armstrong and his crew.
I think it's a difference in philosophy perhaps.
Basically, we are both reducing capacity.
It's just how you reduce capacity.
So—.
You need to introduce yourself.
Oh, for the record, I'm David Labbe.
Sorry.
BPS, I mean, take this as a tank with Stumptown diesel in it.
So this tank is half full.
So, and in fact, from the data we get from the fire marshal, most tanks are around 40%.
We don't know how accurate that data is, but if you look at the air quality submissions as well, tanks are not always filled to the top.
They're built, they're built, capacity is not what their actually filled capacity is.
So what BPS is saying is we need to reduce the built capacity, right?
So let's say you did a 20% reduction in built capacity.
Sorry.
It looks like this.
So what does that tell you?
That tells you that you could actually increase your fuel, right?
And that's the problem, is that we could, we could create a 20% reduction or an X percent reduction, and there could actually be— of capacity, i.e., the size of the tanks— and there could actually be an increase in the fuel.
Now, the major issue for us is on the day that whatever catastrophe happens, the risk that we're speaking about is the amount of fuel in the tanks.
It's not the size of the tanks.
It's what's in the fuel, what's in the tanks.
And so— I agree.
Because the facilities will be reporting, as the current proposal from BPS specifies, the average fuel and actually the peak fuel levels in the tanks.
They— we will be able to know over time how much these tanks are filled.
And based on that, we will be able to titrate that with the data we have from the state to know whether a possibility of a fuel reduction is possible.
Is feasible.
Furthermore, I mean, they mentioned the fact that the RMIPs would be coming online.
Those RMIPs will be published and public data.
So if a company says, we're going to take this out of commission in 2 years, there's no reason why the fuel reduction program could say, in 2 years, we know that's going to go out of commission.
We do not need to wait.
So they are proposing that every 3 years they make a report to you all.
Thank you.
We're saying you have all the data, you have the RMIP data.
If there's a possibility for a fuel reduction that does not harm, does not create shortages of fuel, why wouldn't we do it?
Why would we wait till 2036 when we could do it in 2027, in 2030, et cetera?
I think it's also a much safer approach because it's iterative.
Right.
And the other advantage of taking fuel, of actually lowering the average fuel, is that it makes the tanks safer.
Every tank— I mean, when you buy a cup of coffee, you don't fill it to the top.
So every tank has basically a safety margin just because of fumes and for seismic, for sloshing.
What we're saying is we want the city council to increase the safety margin.
Okay.
Now, if you think of the 90-plus percent tanks that actually are unsafe, we know they're unsafe because they were built before seismic standards.
They are all unsafe.
We're saying let's reduce— let's increase the safety margin to the point where we're only submitting ourselves to absolutely necessary risk, not unnecessary risk.
So on a technical basis, this is called seismic freeboard.
You could increase the seismic freeboard.
Yeah.
And as engineers will tell you and told us, the lower the amount of fuel in the tank, the safer the tank is, especially if it's an older tank.
Steve Novick
Thank you.
One more question.
I think you basically said that the intent here is not to create a fuel shortage, so the drawdown should be consistent with reduction in demand.
And I just wanted to ask a question, but I think an obvious answer, which is that If we as the City of Portland really want a big fat drawdown, hopefully much more than 20% over time, of fuel in the hub, should we be doing everything that we can within the City of Portland to help people and encourage people to switch from gasoline cars to transit, biking, walking, and electric cars?
Cherie Spock
I've been nominated to answer that one with a resounding yes.
Yes, we would love to do everything that we can.
This is one part of climate policy that needs to happen, is dealing with the safety and immense risk that we have at the CEI hub.
But it's only one part of what we need to do as a city to make sure that we meet our climate goals.
And so we definitely need to set good policy that helps us to make sure our building emissions can be reduced.
At a great, you know, way that works for everyone and is affordable and accessible, and move to transportation that we can all afford and that is accessible and safe for all of us to get around without using fossil fuels, and to be safer when we can be outside more and getting exercise and using public transit.
So we're gung-ho for all of you to continue working on policies other than the CEI hub.
Thank you.
That enable us to move away from fossil fuels as quickly as possible so that we don't need to store them at this unsafe location.
Steve Novick
What I was saying is that the reduction in demand and shifting people to not driving fossil fuel cars enables a greater reduction of fuel at the CEI Hub.
And 86% of the fuel in the CEI Hub, I'm told, is for transportation.
So the way to reduce the need for fuel in the CEI Hub is to have more transportation be non-fuel-oriented.
Thank you.
Jamie Dunphy
Thank you, Councilor Novick.
Councilor Koyama Lane.
Tiffany Koyama Lane
Thank you all for being here today and for coming with ideas, for being collaborative, not just coming to yell at us, but to actually try to partner and give some suggestions.
Appreciate it.
So the presentation— not that you yell at us other times, just saying.
All right, just digging myself deeper in a hole.
Okay, so the presentation touched on the fact that LUBA found some of the comprehensive plan language weak and not directive enough.
Can you explain a little bit more about that feedback, those findings, and how exactly that impacted the recommendations to these amendments?
Tom Armstrong
Nicki.
Cherie Spock
Um, I, I, I— Nikki, you can go ahead and—.
Tom Armstrong
That's superb.
Nikki Mandel
Thank you very much.
Um, as, as some of you may be aware, um, the city has been trying for years to, um, control and, and prohibit new fossil fuel infrastructure in the city.
And, um, twice, LUBA, the Land Use, um, um, Board of Appeals— Board of Appeals, thank you very much— uh, Land Use Board of Appeals Remanded decisions back to the city, indicating that the city has the authority to make those kinds of regulations and restrictions, but that the comprehensive plan language on which it was basing those denials of expansion and LUX certification was based on language in the comprehensive plan that— I'm sorry, I'm going to use this because I just love the language from LUBA— is hortatory and aspirational.
Angelita Morillo
Yeah.
Nikki Mandel
And that it needed to be prohibitory and mandatory in order for the city to make a claim on that.
And in fact, this was indicated in the BPS application for the hazard mitigation grant that started this whole program, that this has been a problem for the city in kind of overcoming legal challenges, that we need stronger language in our comprehensive plan.
And that was a claim that BPS made to the To FEMA when they said we need this planning grant.
So we are looking at what is coming through in the proposal to you, and we see actually the same kind of language that's in the existing comprehensive plan, things like support and engage.
And so we want to lean into the goal of amending the comprehensive plan and provide that very directive specific language that's actionable so that when the city takes an action, it is less subject to delaying lawsuits and it can actually then implement that through zoning code.
Thank you.
And thank you all for being here so late last night and coming back today.
Tom Armstrong
Thank you.
May I ask one more question?
Jamie Dunphy
Please.
Tiffany Koyama Lane
Looking at the amendment around the bulk fuel storage capacity reduction and shifting from the one-time 20% reduction I'm curious if this recommendation that you all are bringing, could that actually result in us having less than a 20% reduction?
David Labbe
It certainly could.
I mean, it's going to be— the whole point is to make it data-driven, is to not throw out a number based on estimates or projections for 10 years from now, and to make sure that there is a guarantee that we will not create shortages.
So to be— I mean, we will have the data.
The facilities all collect exactly the data that BPS is now asking for.
We're not asking them to create new data.
They report some of it to DEQ for air quality.
They report some of it to the fire marshal.
So we just want to make— we think the most prudent, cautious approach to anything like this, which has, as you will see in the Econ Northwest report, potential economic impacts has to be data-driven.
It cannot be based on guesstimates of what's going to happen in 10 years.
Tiffany Koyama Lane
Thank you.
Well, can I just share one thing?
I mean, this is half-baked in my mind, but I'm wondering about it being— having a number like 20% or a comparison based on the tank data and fuel consumption data.
David Labbe
Again, I think the question— I mean, this will come back.
Our proposal is to bring this back to City Council with public testimony.
So that's from the industry, from us, and to really debate what is the prudent way forward.
Because I think it has to be basically a public decision that if we're going to draw down, we have consensus that there is a drawdown that can be done to the appreciate the thoughtfulness and all the work that's gone into this.
Tom Armstrong
Thank you.
Jamie Dunphy
Thank you, Councilor Koyama Lane.
Uh, thank you all very much.
You're welcome.
Um, I had said we were going to invite our next 2 panels up, but I'm also noticing that it is currently 3:40 and, uh, there are a couple of councilors whose teeth are floating.
We are going to go ahead and take a 10-minute break right now.
I'd like I'd like everybody to be back here at 3:50, and we will finish up our last 2 panels and Q&A.
It means you have to go to the bathroom.
No.
Welcome back, folks.
Thank you all so very much for the brief break.
Steve Novick
Hiya.
Jamie Dunphy
I'm really glad everybody's worked up and excited about this topic.
Excellent.
Thank you very much, folks.
I'm now going to invite TJ McHugh, who's Director of Government Relations for the Portland Metro Chamber, up to the dais.
Thank you.
Welcome, TJ.
Dan Ryan
Hey there.
TJ McHugh
I guess I'm probably going to be the least popular person in the room, but, uh, good afternoon, councilors.
For the record, TJ McHugh with the Portland Metro Chamber.
Uh, thanks for the opportunity to testify today on the proposed CI Hub regulations.
Uh, there's much alignment, um, between us and the last panel.
Uh, the chamber recognizes the importance of seismic safety Environmental protection and reducing our dependence on fossil fuels.
We share the council's interest in making Portland and our region more resilient and better prepared for the future, and we've spent hours working with and providing feedback as best we can with the information provided.
But we have some concerns.
I would like to be able to provide you detailed comments today on the policy before us, but unfortunately that's not possible.
There was a significant and substantive update made to the draft policy for discussion today.
And was only released late last night.
This is by no means enough time to review this technically complex policy the council is tasked to consider.
I also want to draw attention to something you might not be aware of.
The proposed policy contains 2 studies which are not consistent with each other.
We've asked and not received any explanation for how these differences are being addressed.
Why is one study being used as the underlying basis for the policy and the other is not.
They were both commissioned by the city.
We agree.
And, and now we have additional economic information that deserves serious consideration.
Eco Northwest independent review concluded that the disruption to the CI Hub operations have a potential to affect fuel availability and pricing statewide.
It also found that even a modest increase in fuel costs can have measurable consequences for employment, Economic output, household income, and consumer prices, with impacts falling particularly hard on low-income households in communities outside the Portland metropolitan area.
That analysis from Econ Northwest was not completed until July and not made public until August, after much of this proposal had already been developed.
This council should not be asked to make a decision of this magnitude without fully considering the most recent economic analysis.
Thank you.
We are concerned that the proposed 20% reduction is based on long-term demand and projections that are inherently uncertain.
There are significant external factors that can change the regional fuel supply, including refinery closures, pipeline disruptions, natural disasters, and geopolitical events.
Storage is not simply about meeting average demand.
It provides flexibility and redundancy necessary when something goes wrong.
And as it was presented, the CI Hub is not simply a Portland issue.
According to the city's own analysis, approximately 90% of Oregon's liquid energy passes through this area.
The fuel moving through this hub supports aviation, marine, rail, trucking, businesses, households, first responders, and emergency operations throughout Oregon and the Pacific Northwest.
That means decisions about the hub have consequences As Svetlana presented, Oregon already has a state process specifically designed to address the seismic risk of these facilities.
The DEQ Fuel Tank Seismic Stability Program requires facilities to conduct detailed site-specific seismic assessments and develop plans to mitigate the risk identified through that process.
Those assessments are still in progress.
We should not— we should thank you.
Thank you, Mayor Wilson.
We believe the proposal should better recognize the role of the CEI hub in Oregon's transition to lower carbon fuels.
Renewable diesel and sustainable aviation fuel can require additional storage and infrastructure as we transition away from the conventional fuels.
Policies intended to accelerate that transition should not inadvertently make it harder to build the infrastructure needed to accomplish it.
So today, the Portland Metro Chamber is asking the council to pause this process and direct BPS to open its analysis and allow the Planning Commission to reconsider the proposals in light of any new developments.
And we also need to review the legality, legality of any proposed amendments that are being brought forward.
We can and should pursue seismic safety, environmental protection, and our climate goals, but we need to do it in a way that protects affordability, economic competitiveness, and regional energy resilience.
Thank you.
Jamie Dunphy
Thank you very much, TJ.
Colleagues, any technical or clarifying questions?
Again, this is not an opportunity to debate, but if anyone wants to clarify what TJ was talking about.
Councilor Green.
Mitch Green
Thank you, uh, and thank you, TJ.
I know what it's like to walk into a room where maybe you're not the most popular person there, so I appreciate that.
You have to laugh at this stuff sometimes, guys.
I noticed that you were kind of nodding in agreement when David Labbe was talking about the data-driven approach, and then you sort of reaffirmed that during your testimony.
Can you say a little bit about your reaction and kind of help us understand your thinking a little bit more?
TJ McHugh
Yeah, we 100% believe that everything should be data-driven.
I think that the policy was created with outdated information and conflicting information.
I think we need to be cognizant of the information we're using and use the most relevant information we have.
And as we move forward on a yearly basis, continue to update that data and make decisions based on that data.
I mean, a wholehearted 20% reduction might not make sense in 5 years from now considering geopolitical events or anything like that.
So there has to be some flexibility that's built into a policy.
Tom Armstrong
Okay, thank you.
Jamie Dunphy
Thank you, Councilor.
Vice President Clark.
Olivia Clark
Um, thank you, Councilor President.
Um, could you just clarify for me?
I'm still catching up on all this stuff too.
It's happening pretty fast.
Um, you said that the 2 reports were contradictory.
Could you just, uh, review that for us?
TJ McHugh
Yeah, so there was conflicting information that came out of the 2 different reports that were commissioned by the BPS, um, and we've asked multiple times to understand why we're using one report and not using the other.
And we don't know why.
We don't know if it's because one is more beneficial to the outcome we're looking for or what.
Olivia Clark
Well, could you just— what are the conflicts, TJ?
Svetlana Lazarev
Can you—.
TJ McHugh
A lot of the data in terms of fuel use projections, just basic understanding of the projections that went into the policy work.
Olivia Clark
Okay.
All right, thanks.
Jamie Dunphy
All right, seeing no one else in the queue— oh, Councilor Novick, there we go.
Steve Novick
Yeah, thank you, Mr. President.
Um, I would just like you to elaborate on that.
Did, like, one report say demand's going to go down by 20%, the other said go down by 2%?
I mean, please explain a bit the discrepancies.
TJ McHugh
I think BPS would be better off to explain the discrepancies than I would.
Steve Novick
Okay.
Jamie Dunphy
All right, thank you very much, TJ.
Thank you.
Thank you.
I'd like to now invite Sophia Steele Conley, who's Director of Northwest Government Affairs for the Western States Petroleum Association, to the dais.
Oh, she's actually joining us online.
Hello, Sophia.
Uh, welcome, and you have 10 minutes.
Eric Engstrom
Take it away.
Angelita Morillo
Excellent.
Sophia Steele Conley
Thank you so much, and thank you for letting me participate virtually.
I'll also note I'm very glad that you all Thank you.
I had a break before I had to present.
Um, so with that, uh, thank you again for the opportunity.
My name is Sophia Steele Conley, Director of Government Affairs for WSPA.
I'd like to note that I am not our technical expert.
Unfortunately, with the amount of time we had to plan for today's work session, he was unable to attend, but I will do my best in his place.
Um, and then I'd like to note today that my remarks will focus on the information we received prior to the updated documents that came out yesterday late afternoon.
As you're all aware, especially from this hearing, this is an extremely dense and highly technical topic where precise language in these materials matter.
WISPO represents companies operating in the CEI hub, and as their trade association, we take it very seriously that it is our responsibility to engage in this process with a commitment to accuracy, transparency, and factual integrity.
With that said, my goal today is to walk through how the Pacific Northwest fuel supply chain works and why the CEI Hub plays such an important role in keeping fuel moving safely and reliably throughout Oregon.
I'll explain how the system operates, why storage capacity matters, and why the CEI Hub is so important for consumers, businesses, emergency responders, and other critical services across the state.
Let me share my screen with you all because I do have a couple slides.
Can you all see that?
Jamie Dunphy
Yes, we can.
Sophia Steele Conley
Excellent.
All right, let's start with looking at the big picture.
When most people think about fuel supply in the United States, they assume it's one large interconnected network.
In many parts of the country, that's exactly the case.
If you look at this map, you'll see an extensive network of crude oil and refined product pipelines stretching across the Midwest, Gulf Coast, and much of the eastern United States.
Those regions benefit from multiple supply routes and significant redundancy.
But what's striking is what happens when you look west.
As you move into Washington, Oregon, and the whole Pacific Northwest, that level of connectivity drops off dramatically.
In many ways, our region operates more like an energy island than an interconnected network.
So as you can see, we don't have the same level of pipeline redundancy that exists elsewhere in the country.
Thank you.
And that means every piece of infrastructure we do have carries a lot more weight.
When there are fewer pathways to move fuel, every pipeline, refinery, storage terminal, and distribution asset becomes increasingly important to maintain reliable fuel supplies.
Understanding that reality is important because it helps explain why infrastructure decisions in the Pacific Northwest often have much bigger regional consequences than people might initially expect.
With that in mind, let's look at the refining system that serves our region.
Washington State is home to 5 major refineries and ranks 5th nationally in refining capacity, behind, behind only Texas, Louisiana, California, and Illinois.
2 Refineries are located in the Ferndale area, 2 are in Anacortes, and 1 is located in Tacoma.
Together, these facilities process approximately 670,000 barrels of crude oil annually.
Thank you.
Crude oil per day.
That production is particularly important because Oregon has no in-state refineries.
Oregon cannot make liquid fuels and relies for its needs heavily on fuels produced in Washington to meet its transportation and economic needs.
Those fuels include gasoline, diesel, renewable diesel, jet fuel, marine fuels, and other petroleum products that support transportation, agriculture, manufacturing, aviation, public safety and emergency response.
In fact, more than 90% of the fuel used in Oregon either originates from or moves through Washington's refining and distribution system before reaching Oregon consumers.
Having nearby refining capacity provides an important source of supply, but that supply only benefits Oregon if the state maintains the infrastructure needed to receive it.
Pipelines, storage terminals, and distribution So this illustration actually comes from the Oregon Energy Security Plan produced by ODO.
And it helps show how fuels move from Washington into Oregon.
So if you look at the top of the map, the Trans Mountain Pipeline shown entering from Canada is currently the only crude oil pipeline supply— supplying Washington's refineries directly.
Once that crude oil is refined into products like gasoline, diesel, and jet fuel, those fuels move south through the Olympic Pipeline System.
For Oregon, this pipeline is extremely important.
More than 90% of the transportation fuels consumed in Oregon travel through this corridor before ultimately reaching the CEI Hub.
I often describe the system in this way: if the Olympic Pipeline is the highway bringing fuel into Oregon, the CEI Hub is the distribution center of that system.
The CEI Hub receives fuel, stores fuel, balances fluctuations in supply and demand, and then distributes that fuel to communities airports, businesses, farms, manufacturers, and emergency services throughout the state.
I'd like to make a point very clear that Oregon only has about 2 weeks of storage capacity, highlighting the importance of the balancing function the CEI Hub provides to the state of Oregon that allows the entire system to operate smoothly on a daily basis.
Without it, even relatively small distributions can quickly become much larger operational challenges across the supply chain.
This slide shows the complete journey fuel takes through our regional supply chain.
Crude oil reaches Washington refineries by pipeline, marine vessel, and rail.
The refineries then convert that crude oil into the transportation fuels people actually use every day.
Those fuels move through the pipeline system into the CEI hub where they are stored, managed, prepared, and prepared for distribution.
From there, fuel moves by truck, pipeline, rail, and marine transportation to destinations throughout Oregon and the whole Pacific Northwest.
What's important to remember is that none of these pieces operate independently.
Refineries depend on crude supply.
Pipelines depend on storage capacity.
Distribution systems depend on having fuel available when and where it's needed.
Every part of the system relies on every other part.
And right in the middle of that network sits the CEI Hub, connecting fuel production with fuel consumption.
Its value isn't simply that it stores fuel.
Its value is that it allows the entire system to operate reliably, efficiently, and continuously.
Now, I'd like to finish by talking about storage tanks and why capacity matters.
When people hear the term tank capacity, It's easy to assume that every inch of space in gallons inside a tank is available for use.
In reality, storage tanks are engineered systems with important operational and safety requirements.
First, not every gallon in a storage tank can be withdrawn during normal operations.
Every tank contains what's known as a heel, which is a volume of product that remains in the tank to help mitigate sediment, reduce operational risks, and support safe operation.
Second, tanks include vapor space and in many cases floating roof systems that help control emissions, maintain product quality, and support safe operations.
Third, tanks are not operated at 100% of their physical capacity.
Safety requirements and operational considerations already limit the amount of usable volume available for day-to-day operations.
As a result, a tank's working capacity is always less than its total physical size, and that remaining work capacity serves a critical purpose.
It allows operators to receive incoming fuel shipments, respond to changes in demand, accommodate blending requirements, manage renewable fuel programs, and maintain continually during unexpected disruptions.
Oh, I'll share with you all, I do like to think about this like a suitcase.
I personally would never pack a suitcase so tightly that there was no room to add, remove, or rearrange anything inside.
Storage tanks work pretty much the same way.
They need available space so operators can receive fuel, move product in and out, and adjust as supply and demand changes.
That flexibility is what makes the storage system work effectively.
Storage tanks function in much the same way.
They need the ability to fill and empty as supply and demand fluctuate.
Their volume comes— their value comes from that flexibility.
So when we're talking about reducing working capacity by 20% or more, the concern isn't simply that we're losing storage space.
The real concern is that we're losing operational flexibility, the flexibility that helps stabilize the entire fuel system.
As I already mentioned, Oregon has approximately 2 weeks of fuel storage capacity.
Reducing that flexibility could make it more difficult to manage inventories, respond to disruptions, and maintain the reliable flow of fuels that consumers, businesses, and critical services depend on every day.
The CEI storage system was built to perform that balancing function.
Preserving that capability is an important part of maintaining fuel reliability, energy resilience, and supply security for Oregon.
I will note to you all that is the end of my formal presentation, but I did have 2 questions come in this morning, and if I do have another minute, may I ask those and answer them for you all?
Yeah, go ahead.
The one question that I received was, why do renewables require more tank separate storage.
As the fuel supply transitions towards more renewables and lower carbon fuels, adequate tankage becomes increasingly important because the system is handling a greater variety of products, feedstocks, carbon intensities, and blend requirements.
Separate storage provides the flexibility to maintain product integrity and produce the different blends required by different markets and jurisdictions, while also supporting accurate tracking and reporting of renewable fuel volumes.
Thank you.
Volumes and their associated carbon intensity pathways.
Tankage also provides an important operational buffer.
Renewable fuels do not necessarily arrive at the same time or in the same quantities that customers need them.
Adequate storage allows terminals to manage those supply and demand fluctuations, receive, receive shipments safely, maintain appropriate inventories, and blend products when and where they're needed.
That flexibility helps the transition to cleaner fuels occur reliably, safely, and efficiently without unnecessary constraints— without unnecessarily constraining the fuel supply system.
The second question that I received today was, renewables aside, if demand goes down, would the industry naturally start using fewer tanks?
If demand declines over time, I think it's reasonable to expect terminal operators to continually evaluate their infrastructure needs.
But I would be very careful about assuming that a 20% decline in fuel demand means a system can automatically operate with 20% less storage capacity.
Demand and storage capacity serve different functions.
Demand tells us how much fuel is consumed over a period of time, while tankage provides the operational buffer needed to receive shipments, manage fluctuations between incoming supply and outgoing demand, maintain inventories during pipeline or marine disruptions, accommodate maintenance, and respond to events such as severe weather or other supply interruptions.
I hope that's helpful.
Thank you again so much for the opportunity, and thank you for your time this afternoon.
Jamie Dunphy
Thank you very much, Sophia.
Colleagues, do we have any technical or clarifying questions for Sophia?
Councilor Novick.
Steve Novick
Thank you, Mr. President.
I think you might have kind of indirectly answered this question, but wanted to see if you could give a more direct answer.
I mean, we've heard that there's 20 to 25% excess capacity now, and so I just wanted to know, is that true?
And if it's not, can you explain why you reach different conclusions than BPS does about what excess capacity there is now?
Sophia Steele Conley
We would not describe it as excess capacity.
Um, there are a couple things that I heard today that I would like to go back and discuss with my members, and I'm hoping to come back to you next week and have a little bit more details.
I do represent competitors in the marketplace, so I must be very careful that I do not violate any federal or state antitrust laws.
I also, I don't want to wear orange.
And so I want to be sure that whatever information that I provide you is appropriate and accurate.
But like I shared, when it comes to the operational capacity of a tank in all of the different structural integrities that are included in the tank, as well as the need for flexibility, looking at how they're receiving and distributing fuel, we would not categorize it as excess space.
Jamie Dunphy
Thank you very much.
Councilor Novick.
Oh, Councilor Morillo.
Angelita Morillo
I just have sort of a follow-up process question on this.
I think that the folks on the first panel came extremely prepared with an analysis, but there was, you know, the Metro Chamber came, presented, talked about discrepancies within the report, but then did not outline any specifics.
Here we have another person presenting for oil companies, but they didn't bring their experts.
I think that the report is very detailed.
And so she's also unable to answer specific questions about the discrepancies and is going to get back to us.
But I think part of the value of doing this is in a public forum so we can all have that discussion together and get that information.
So as these follow-ups are happening, how is that information going to be getting to all of us and shared with the public?
Jamie Dunphy
Well, I will tell you that anything submitted to the record will be made public, certainly on the, on the actual items that we'll be hearing at council.
And if I receive anything personally, I will certainly make it public and also share with colleagues immediately.
Angelita Morillo
Thank you.
Yeah, I appreciate that, Council President.
I guess I— this is less of a question, more of a commentary, that if this oil terminal is as invaluable to the state of the economy here as people say it is and to our entire infrastructure, then I would hope that people would come prepared to answer why they are having different opinions than BPS and what some of the are doing in their analysis because we don't get a lot of opportunities to have this discussion out in public.
Elana Pirtle-Guiney
Thank you.
Jamie Dunphy
Thank you, Councilor Morillo.
Sophia, thank you very much for being here today.
No further questions in the queue.
Colleagues, we are now going to enter just open discussion on topics and the presentations we heard today.
Our BPS staff are still in the room and available to answer any further questions or questions about technical or clarifying questions, but also just broadly questions about the process.
Folks are welcome to get in the queue and we will talk until we're tired.
I'm tired now.
Dan Ryan
Yeah.
Jamie Dunphy
Colleagues, any— Councilor Novick.
Steve Novick
Thank you.
My questions are for BPS staff, anybody who's still here.
I've got 2 questions, a little one and a big one.
The little one is the oil people are saying that transitioning to renewable fuel needs more tank space, and I do not have the qualifications to like confirm or deny that.
I'm just wondering what your reaction to that is.
And is that something that you have or would want to like consult with some independent expert on it?
Or is it something that you think you're gonna evaluate yourselves?
Eric Engstrom
I would just start out by saying one of the, I think that's one of the logics along with lining up with the seismic requirements, that's part of the logic of there being a runway here of time for the drawdown is because we know during this interim decade that, or nearly a decade, I would add sort of 2 things.
Tom Armstrong
Our request has been, in general, it's the statement that you heard.
Oh, we need more capacity, but lacking specifics, lacking forecasts or how this— how that capacity would be used.
I will say when we look at the capacity that's needed, Especially at the, the data and the reports from the state clean fuels program, you see a general decline for— especially when we're talking renewables, it's mostly about renewable diesel and renewable diesel as a replacement fuel for fossil diesel.
And so although renewable diesel is increasing, the overall demand for diesel, fossil plus renewable, is declining.
Okay.
I think where, you know, our ability and our data has been to evaluate the hub as a whole and not to get down into the details of each terminal, what market they're serving, the size of their tanks, and this diesel— this tank is used for this kind of diesel.
And as Eric said, that's where sort of that excess capacity provides the flexibility.
Thank you.
At least over the next 10 years to respond to those changes in the marketplace for the different fuel types.
Steve Novick
Thank you.
My other question is, the coalition has proposed a very different approach than you have.
Your proposal is to reduce basically the number of tanks by 20% at a date certain.
The coalition says that it shouldn't be Number of tanks, but amount of fuel.
And rather than a date certain, it should be sort of an ongoing process.
And that definitely— that concept definitely has an appeal for me.
What I wonder is, it seems to me that you could have at least 3 possible reactions to that.
One could be we've looked at their idea and we've concluded that it's not operationally or legally possible.
It just wouldn't work.
Right.
Another could be, yeah, that's a good, that's a good alternative, and we'd be perfectly fine to turn on a dime and adopt that next week.
And a third alternative would be, well, that's an interesting idea, but before signing off on it, we'd like some more time to evaluate it operationally and legally.
Eric Engstrom
So I wonder if your thoughts are, what are those 3 the 2 concepts are quite different operationally, and so I think a program in terms of staffing and the resources within the city to administer those 2 approaches look very different, whether you're measuring the size of tanks in the system versus tracking in a more ongoing way the volume of movement of fuels in terms of the, you know, the mason jar of coffee.
So I think our answer is operationally that is more challenging, and there are some additional legal considerations that we could get into at another time.
Steve Novick
So I mean, do I take that to mean that you'd be worried about our just immediately jumping to that model without you guys having more time to think through the resources required and other questions?
Eric Engstrom
I think that's an accurate portrayal, yeah.
Steve Novick
Thank you.
Jamie Dunphy
Thank you, Councilor Novick.
Councilor Pirtle-Guiney.
Elana Pirtle-Guiney
Thank you, Council President.
I was going to start with a question about the fact that we had both community members and industry asking for us to do this the same way that's different from what's in the report and hoping for more information.
It sounds like from your answer to Councilor Novick's question that that's something that would take some additional follow-up with you all to better understand the cost of implementing a more in-depth program and also those legal concerns.
Is that correct?
Eric Engstrom
Yeah, just operationally, the tracking implied by that different approach is a more intensive, costly process.
Elana Pirtle-Guiney
I think it would be helpful for us to understand that since we did hear from groups that generally are not on the same page that they both would prefer that other process.
So if we can get some information on what that looks like, that would be helpful.
Um, we also heard some from our last testifier about the idea that in a crisis you sometimes need more capacity.
And I am trying to remember from my initial reading of this, is there any— I'm going to call it a release valve for what we might call like a once every 100-year crisis?
Is there something that says in a natural disaster you could store more temporarily or something like that?
Or is it a hard cap no matter what?
I don't remember what we had in there.
Tom Armstrong
Well, I think that's difficult to address because fundamentally we're regulating the built environment.
And you have— in a disaster, you have what you have, right?
We're gonna— we don't know when it's gonna hit, but we're just gonna have the tanks that are out there and they're gonna perform the way they're gonna perform.
Presumably in a disaster, council can declare an emergency and, you know, those rules are waived, much in the way we've had a housing emergency, to respond to whatever needs to— for the emergency response.
But you know, whether or not we still have the physical tanks that are there or not there.
Elana Pirtle-Guiney
So the answer to the folks who have raised those concerns really is this is in code and council can declare an emergency if there is an emergency to make sure that we can still have the necessary fuel supply to keep our community operating.
Yeah.
Okay.
And then we heard a little bit of conversation about the safety differences between having fewer tanks and having tanks with less fuel in them.
I understand the concern about the operational side of the drawdown as opposed to the less storage capacity, but did any of the work that your teams did or any of the work in that you were looking at by experts across the country look at the risk, the safety risk between having fewer tanks operational or a lower volume within tanks of fuel?
Tom Armstrong
No, we didn't get to that sort of specific tank level, if you will.
And again, sort of looking at the overall capacity, especially the overall capacity of the hub, and allowing each terminal to manage their overall capacity as they see fit, and, and in essence having the ability to decide do they want one large tank or do they want 10 small tanks, and really trusting the terminals to figure out what those needs are on the demand or how their operations work, but having us as a city regulate the overall capacity.
Elana Pirtle-Guiney
Great, thank you very much.
Jamie Dunphy
Thank you, Councilor Pirtle-Guiney.
Councilor Koyama Lane.
Tiffany Koyama Lane
Thank you, Council President.
So both the BPS proposal and the proposal that I heard from community suggested changes to require the Port of Portland to demonstrate need for any aviation fuel expansion, and I'm wondering if you can speak broadly to the port's response to that or position.
Tom Armstrong
Have they been I think there continues to be concern and concern about if that need arises, how difficult or challenging the process, the approval process will be, and, and how much sort of lead time they need to be able to get that, you know, as their forecasts are updated, you know, to be able to get that done.
And they foresee a need in 5 years for more capacity, when do they need to start that approval process so that that capacity comes online when they see that need?
Olivia Clark
I would—.
Patricia Diefenderfer
This is Patricia Dieffenderfer, just for the record.
I would also say that it's— I mean, I think the port doesn't necessarily supply the fuel.
It's the terminals that supply the fuel, right?
So the port does the forecasts and then If a terminal wants to go through the process to increase aviation fuel through that Type 3 review that we were discussing, then they would have to demonstrate the need for that additional fuel that they're asking for, that additional storage space.
Elana Pirtle-Guiney
Thank you.
Tiffany Koyama Lane
And I don't want to put anyone on the spot, but I believe we have someone from the Port of Portland here today.
I don't know if Anyone wants to speak to that?
Tom Armstrong
But I'm—.
Jamie Dunphy
If, if our friends from the port are interested in coming as responding, certainly, but they also don't have to.
Tiffany Koyama Lane
Okay, thank you.
Jamie Dunphy
Hey, thank you very much, Councilor.
Tom Armstrong
Councilor Green, you can come up if you'd like.
Jamie Dunphy
I see you, Dan.
Tom Armstrong
Welcome.
Eric Engstrom
Hello, Council President Dunphy, Councilor Koyama Lane.
Jamie Dunphy
For the record, Dan Eisenbeiss.
Tom Armstrong
I'm a registered lobbyist for the Port of Portland.
Was not expecting to speak today.
Eric Engstrom
What I will say is that we would agree with Patricia Dieffenderfer that in the instance of the limited allowance for expansion of terminal capacity for aviation fuel, it would be the terminals themselves that would be the applicant.
Not the Port of Portland, nor the consortium of airlines that purchases and distributes fuel at PDX.
Jamie Dunphy
Thank you, Councilor Karamalan.
Councilor Green, and thanks for coming up, Dan.
Mitch Green
Thank you, Council President, and thanks again for what I think has been a pretty robust conversation.
This is big stuff.
Thank you.
It's going to— any long-term future planning stuff you don't take lightly.
So I'm grateful for the engagement.
I have a bit of a— I hope it's not too abstract, but the question is, so the modeling that we do, like you guys are planners, and when you engage in long-run planning, you have to sort of hold some assumptions fixed and constant.
Right.
And you say, okay, given these assumptions or scenarios and given what we know about the data, what do we think the outcomes will be?
What are the needs going to be?
What are our constraints going to be?
And how does that influence our decisions on how to make land use choices?
But in the real world, those future states are not fixed and constant.
And in the real world, the market responds to things like prices, income, and other exogenous factors.
And so where I'm going with this is, is there any room for— I know it's hard, but do planners— do we have any precedent here at City of Portland in our land use planning process to contemplate that style of dynamic kind of like interactive response to say, oh, I don't know, there's a 37% chance of a Cascadia subduction zone earthquake, and that's a non-trivial chance.
Steve Novick
Yes.
Mitch Green
What would it look like to envision a different solution to the problem where it wasn't all clustered in one spot?
Is that in bounds, or is it just hard, or both?
Tom Armstrong
I think it's— I think, well, a couple of things tangled in there.
It's hard.
I think that's why we included the Type 3 review processes as relief valves.
They're not hard hard, hard— they're pretty hard lines, but there's an escape valve with review process to know if that's a good idea or not.
So that's one of the functions of those review processes is that relief valve.
I think what you got in the last part, if I understood it, is within the City of Portland, sort of the CI Hub is the place.
Right.
For those facilities to be.
It's the end of the pipeline.
There's marine access, there's rail access.
There's not another good place in the city of Portland for these facilities.
Once we get beyond our borders, that becomes a state issue that, that we as a city need to lobby the state to address how to distribute these facilities for resiliency.
Thank you.
How we tap into the— as you saw in the pipeline descriptions, the pipelines coming from Salt Lake City and Montana into Washington, and can those be used as redundant supplies for Eastern Oregon?
But that's more of a state strategy that has been on their to-do list for quite a while.
Mitch Green
That's a great response.
And so let me clarify, I think, what my question is really trying to get at, which is, um, in this land use process, a lot of this hinges upon what is, what is the basis of reasonableness for the demand, right?
And the demand, recognizing that we're in the confines of the City of Portland, but the demand is not in the confines of the City of Portland.
It is a function of like The market, however broad that is, probably mostly regional, but it's also not.
We heard from the trade association that it's certainly not.
And so if we've got this disconnect between the land use problem being local, but the basis of evidence and reason and on how we think about the future need is, is not local, how do we square that with the fact that It's likely the case that that demand will evolve over time, given future conditions that are not local.
And that might then change.
If we had a crystal ball, that would change our planning outcome, right?
So I don't know if you want to keep going down this road.
Eric Engstrom
This is, for the record, Eric Kingstrom again, BPS Director.
This is why planning is cyclical and iterative, right?
We don't know everything all at once.
And so we're going to revisit this.
Patricia Diefenderfer
I was also just going to add, that's why we built in the, the reporting intervals, like very, um, I think, you know, short reporting intervals through this process to be able to share, do this analysis, uh, look at demand and, you know, how the curves are going, and then share that information with the council so that there could be, um, sort of but I think it, it is difficult, especially within the zoning code, to build in that dynamism that reacts to that.
Tom Armstrong
I think it is a, a feedback loop where, where we look at what's happening, the trends, and we bring stuff back for you to decide which way we should adjust the regulations.
Jamie Dunphy
I think that's a good point.
Tom Armstrong
But to have the regulations sort of automatically update themselves is not really how we can construct the regulations.
Elana Pirtle-Guiney
Okay.
Mitch Green
I think I understand.
Before I pass the mic, I do want to know if— you were asking some interesting questions, Councilor Novick, about capacity.
And I wonder if the gentleman with the jars, Mr. Labbe, wants to come up.
And you look like you're chomping at the bit to answer I am the gentleman with the jars.
David Labbe
My name is David Levy, aka David Levy.
One of the interesting things is that the BPS proposal as currently written functions by removing tanks out of— taking tanks out of service.
So the tanks are gone, they can't be used again.
That's how capacity reduction— I believe that's true.
Yes.
Mm-hmm.
Our proposal says that's fine, but really, if we want flexibility such as described by the industry, we're better off with more tanks with less fuel.
And so if we do— if we follow our proposal, we would have more tanks allowing more flexibility.
And one could even— I mean, somebody in the audience asked me, well, what if Suddenly we need more fuel.
I might say, well, if the data shows that we need more fuel, there should be more fuel.
This should be a data-driven process.
But if we take the tanks out of service, that option isn't there.
So our proposal actually gives the industry and the community much more flexibility.
So I just think we're not saying that you can't take tanks out of service.
It certainly makes sense that if a You know, I assume that in the RMIPs that will be coming down in the next couple years to the DEQ, that some of the tanks that are actually built very close to the waterways, and I, in our, in the picture that we showed, there is a particular facility that I can't imagine how they're gonna make a containment around those tanks.
So they may wanna take them out.
But that doesn't mean that we can't maintain the flexibility of the hub.
I think it's really important if we're gonna have a I also just wanted to mention that, you know, we just had a conversation about planning a cyclical, shortened intervals.
That's exactly what we want.
And I don't really see that we're asking BPS to do anything more than what they've already committed to doing.
They've already committed to getting data every 3 years, analyzing that data, and bringing it to you.
Thank you.
All we're saying is take the next step, compare it to state data, which you can get, and bring a proposal or not to the council to see if a reduction is possible.
And just make it iterative, cyclical, short reporting intervals, exactly what was just described.
Our proposal gives you exactly that facility, that opportunity.
Thank you.
Jamie Dunphy
Thank you, Councilor Green.
I have myself in the queue, colleagues.
Nope.
Councilor Cramling, are you ahead of me?
That's an older hand.
Okay, just want to make sure.
Um, put myself in the queue, and I actually want to build on this exact same conversation.
Um, I, I could feel that sort of healthy tension about, uh, that broadly we want to have a data-driven understanding, but we also, as a city, as a capital C city government, uh, we need to be a little bit strategic and intentional about how the, the The regulations that we put in place are regulated.
And in some circumstances, it absolutely, you know, I absolutely understand that we need to move towards a situation that is easier for a bureaucratic side to regulate.
And from, you know, the amount of fuel in a tank versus the number of tanks, I mean, in theory, you can count the number of tanks using satellite views, right?
It doesn't require somebody to go out onto the site.
There are, Circumstances in our city right now that we're doing things like this.
The Water Bureau, for example, has changed some of the meters so that somebody doesn't have to physically walk into my backyard and check how many gallons I've used.
They can drive by and scan it with a thingy.
That's great.
I imagine that if there were something similar for parking enforcement, they'd love to not have to get out of their cars.
But there are other parts of regulation and enforcement that simply require people to go be doing things.
Uh, we, we couldn't— you know, firefighters got to get out of the truck, right?
Um, so from that perspective, this feels different.
This feels like— I, I, I, I appreciate the intent to try and create something that is objective database but also easy to— easier to enforce and not creating additional expense.
But I do feel like in this specific circumstance, when we have the industry and advocates I think this is one of those things that may be worth the expense.
And we are making trade-offs every day in terms of what our regulation looks like.
We're, you know, for example, the Bureau of Permitting and Development is looking at self-regulation or self-certification of some built things where a developer could upload photos of the Inside of their panel instead of having to make an inspector go out and do that.
Some of that makes sense.
But when I hear industry and advocates calling for something that makes a lot of logical sense to me also, I think I would really be supportive of moving towards that other direction.
Are there other— am I oversimplifying in how I'm thinking about this or the way you approach that?
Eric Engstrom
I think what you're hearing from both are this idea that we ought to be having a feedback loop with data in the future.
I don't know that I'm hearing exactly the same thing from advocates and industry in terms of how they would structure the regulations.
So you may be oversimplifying a little bit.
Jamie Dunphy
I'm known for that.
Eric Engstrom
The, the— I don't think anyone disagrees with the idea of being iterative and changing our course if we get better data when we get that.
That's why we built in those benchmarks The different approaches we're seeing is, do you regulate based on the tank capacity, or do you get into the business of tracking the volumes and the throughput?
And that process is— there's a whole process of tracking commerce in terms of receipts and deliverables.
And that's how kind of when oil or any product really gets delivered from one company to another, there's paperwork and a paper trail.
Jamie Dunphy
Sure.
Eric Engstrom
So you're building a much larger administrative apparatus to review all that material and make sure it complies with the standard.
And that's the distinction I see.
And Tom, if you—.
Tom Armstrong
Yeah, I agree.
Nikki Mandel
I wouldn't—.
Patricia Diefenderfer
I'm sorry, I would also say that, um, it's just a question of at what frequency are you allowing that data to affect the system, because there, there also needs to be some predictability right, for business about how— what, what amount of fuel they can have at any given time and how they operate as a result of that.
So I think that is also an important consideration.
And while we have talked so much with the community and we've heard their requests for this, I think it's difficult to conceptualize how it would actually work in some ways.
Jamie Dunphy
Sure.
David Labbe
Yeah.
Tom Armstrong
Yeah.
Jamie Dunphy
Okay, thank you very much.
Councilor Ryan.
Dan Ryan
Yeah, thank you, Council President.
And I was going to oversimplify with you.
Thanks for doing it before me.
Um, Tom, Patricia, Eric, that was a— this was a great work session.
And I don't think we've had too many work sessions on this topic where we were able to calmly have the dialogue, where we heard from the different, uh, people in the room There was some odd bedfellow moments even in that, which I still kind of going to reflect on.
But I just want to first start off with thank you for the balanced information.
As I listened to all of the reports and the presentations, it seemed that BPS did a decent job of holding that center and Nate, do you agree with that?
Tom Armstrong
Yeah, I think that we always have held in tension, uh, reducing risk and improving safety with ensuring the fuel supplies that, um, our larger economy needs and, and how you balance those 2 outcomes in a regulatory structure.
Is what we're— that thread the needle there.
Dan Ryan
Yeah, and in fact, that was something that was refreshing, and people just admitted that we do need a fuel supply at this time.
And so that was different than some of the discussions or theatrics that we have in this chamber on the topic.
The nonprofit community that gave a fine presentation provided some pretty crisp amendments.
And back to David, the visuals with the jars, you mentioned that you had many frequent thoughtful conversations with BPS.
Were you surprised, back to the BPS, about what their proposals were?
Did it—.
Was it in alignment with the dialogue that you were having?
Patricia Diefenderfer
Yeah, I would say so, that nothing was a particular surprise.
I think they gave a lot more detail in the, um, proposed, you know, ideas that they presented.
Dan Ryan
But it wasn't what you put forward?
Patricia Diefenderfer
I think that, again, because the conversations were a little bit more abstract, I think this had a lot more detail.
For example, we had conversations about the verbs that are used in policies, and we explained that the comprehensive plan actually has a hierarchy of verbs.
And there are typical words that we use, and there's a meaning behind those words, and we explain that.
I think the idea of collapsing the land use reviews, it's an interesting idea.
We've been thinking about it as staff based on the basis of receiving that input.
I think it is quite difficult to have a uniform set of approval criteria for all of the different— those different circumstances and situations.
Okay.
So I think there could be something we could explore there a little bit.
But I do think at the end of the day that it's going to be difficult to have one uniform set of approval criteria.
Dan Ryan
Okay.
Then you weren't surprised at the amendments.
But when did you first hear about them or see them?
Patricia Diefenderfer
A few—.
Svetlana Lazarev
Last week.
Tom Armstrong
Last week?
Patricia Diefenderfer
I think last week.
Svetlana Lazarev
Okay.
David Labbe
With your permission, I'd like to say something nice about BPS.
Steve Novick
Thank you.
Dan Ryan
Speak a little louder because you were funny and I didn't even hear what you said.
David Labbe
I think it started in May.
We've had a number of conversations.
The first proposals they brought are not the proposals they currently have.
I, you know, we would like to think that we had a good dialogue and that they produced actual changes and listened to us respectively, respectfully.
And that although we didn't exactly end up at the same place, We believe our job is to keep pushing as far as we can, and that they have come— that the proposals have evolved very, very well over the time.
And I would like to call out again, we were told by one of you, this is the way the new representative government is supposed to work.
And to me, this process has been a poster child for exactly what we ought to be doing.
Thank you.
Good relationships between the city and the community, people informed, talking to each other, having respectful conversations, and the thing moving forward.
It's interesting to me, you know, Tom and I have been going back on the— I've been harassing Tom about this, you know, the tank fill levels and all that kind of stuff, and berating him.
And I was really pleased in the current proposal to say that the list of data that I've been asking for, the average fill levels, the tank fill levels, the throughput levels, are actually there and they will be reported every 3 years.
So I believe, I mean, I'm just, I'm thrilled that this, with this process, and I'm looking to you to finalize it.
Our job as a community, I think, was respected, and I think we had a respectful relationship with BPS all along.
So I thank them all.
Jamie Dunphy
And there's—.
David Labbe
Thank you, Tom, and your staff.
Dan Ryan
Gives everybody a chance to do this.
Okay, great.
Um, I do like the last amendment had accountability.
Um, that's what I summarized it as.
And I do hear that from a lot of people in the community from different variations of point of view.
I do think that when the industry makes it really clear that 90% 90% of the state's fuel comes from this area.
That's where we're always reminded that we have a statewide lens here and that Portland City Council has to be responsible for that statewide lens.
I thought the DEQ presentation was brief and fine, but I didn't get enough understanding of how we're aligning with the state and also voices from across the state.
I thought industry and the business lobby gave some words to that.
I don't think anyone would disagree, but we're not in a tiny little island here.
We're with 90% of the state.
And so I want to understand how this is going to be vetted with those.
If I was the mayor in Eugene, or if I was on a city council in— I'm going to say Roseburg, you know, how are they tuning into this and the decisions that we make?
How does it impact them?
So I just wanted to hear a little bit about how you're in dialogue with others across the state.
Tom Armstrong
Well, I think it starts with sort of the transparency and the evidence that you all see, the modeling that we've done, and And to first— I think the first hurdle is to, is sort of to show that we don't need to expand a lot more capacity in the future to serve our needs, our wider state needs, right?
The, the zoning code limits on expansion.
And then the second, and, and I think more of what we hear about is any reduction in capacity and what, how that may affect fuel supplies downstate.
And again, trying to show that there is room in the system and we are being thoughtful about that, um, and, and to, uh, get that information out there.
We've worked with the Office of Government Relations to hold briefings with legislators so that they understand our approach and, and the data that we're looking at.
We've also tried to show that, you know, not only are we using our own modeling, if you look at the state strategy, if you look at the state clean fuels program, if you look at the ODOT gas tax revenue forecasts, they're all pointing in the same direction.
We're going to use less fuel.
And the question is just by how much and how fast.
Thank you.
And so I think that's what we've tried to do to address those concerns about Portland's regulations adversely affecting the rest of the, the state.
Eric Engstrom
And, and to put a point on a particular aspect of that that you heard from the industry, um, I think what we're hearing from the rest of the state most acutely is that issue of when there is a disruption, is having less capacity here going to make it more likely That's the crux of it.
And because we have had examples where when we have a shutdown of the pipeline, that that can cause increases in price in different parts of the state.
And so that's the crux of the concern from elsewhere.
Dan Ryan
And would you agree, when the industry was on— Sophia was on the line, she mentioned that we only have 2 weeks of storage capacity.
Is that consistent with what you're hearing?
Tom Armstrong
It's hard to— it's part of the data question and the quality.
It's hard for us to assess that picture.
And what— well, you saw her graphic of the headspace and the heel space, and, you know, is that working space?
I think it's consistent with what some of the pipeline disruptions that we've seen have shown.
So it's not consistent with the but I think the shortages that those disruptions have caused have been more about how the terminals operate and how much fuel they have on hand, as opposed to needing a lot more tanks.
It, you know, it, I think it has more to do with how they operate and just-in-time deliveries than it does what's the overall capacity of the hub.
Dan Ryan
Okay, I'm thinking something that I shouldn't say.
I'm still trying to decide.
Um, I hope that, um, when we brought up the— who brought up the information about Eco Northwest and that it wasn't vetted into this?
Someone did.
Patricia Diefenderfer
Yeah, I just want to respond to that really quickly.
I think there, there were a couple things that was a—.
That was hanging.
There, there were a couple things that were referred to, documents that were released more recently.
Steve Novick
Yeah.
Patricia Diefenderfer
Yes.
And we did release last evening an updated— so that we had a parametric study, the modeling of the fuel demand modeling.
That study was done sometime in 2025.
I can't remember the date, Tom, but sometime in 2025.
And then we were through all of these conversations, there was a request to use more up-to-date data if it exists.
And there was some recent up-to-date data that was released.
And so we had Parametrics just go back and redo all of the modeling with the newest data, the 2024 fuel demand data, and it didn't actually change things very much.
And so that's why we released it in time for people to see it for the hearing next week, but it didn't change really any conclusions, and it doesn't change the recommendations.
We just wanted to demonstrate that we did it.
The other thing is the economic impact analysis was something that had been requested, and we hadn't had a chance to do it before the Planning Commission, but we did have it done between Planning Commission and Council.
And that information, as soon as we were able to share that information, it was shared.
And we summarized the findings of that report for you.
And essentially, it concludes that, you know, it could not have an impact.
There are certainly some potential impacts.
Thank you.
Eric Engstrom
Both reports are models and estimates and studies.
And so there's a— you know, we talked earlier about the softness of Comp Plan language.
There's also softness of certainty in these technical reports.
And I think you're hearing from all parties here who will cite some of that uncertainty.
Steve Novick
So you can't really get a hard number.
Eric Engstrom
You I think may the question is, hear folks cite the Eco Northwest report as evidence that the economy will be disrupted, and you'll hear folks cite it as evidence that it won't be.
And the uncertainty of the language in that report allows both interpretations, I think.
Patricia Diefenderfer
And it's based on the data and the availability of the data, which we—.
Dan Ryan
There's certain data is just not available or there's conflicting information, which is why the reduction program I, I just will end with, I think sometimes government is slow to accept the reality of a big event, and I think that's when people question the data.
I mean, you've seen this with our homeless response.
We, we did models on how to do this right in 2014, and then fentanyl hit, and we had to adapt.
Thank you.
Hit the streets.
And so there should have been an immediate change to how we think about the homeless strategy after those poisonous and cheap drugs hit the streets.
Jamie Dunphy
Councilor, we've got 4 minutes left.
Dan Ryan
Okay, so I just want to say that I think we're dealing with that with the, the, the war that no one likes in Iran.
And yeah, thanks.
Jamie Dunphy
Thank you, Councilor.
Uh, as I said, we got 4 minutes left.
Councilor Clark and then Councilor Knoll, and we're done.
Olivia Clark
Uh, thank you, um, Councilor President.
I just want to say this has been an excellent work It's been a long time coming.
We're almost there.
I'm so excited.
But I also just want to reiterate something that Tom said, uh, just quote him about threading the needle through opposing policies.
You said balance the outcomes in a regulatory structure.
Absolutely right on.
I really appreciated that.
I want to ask Patricia, you can do this offline.
I'm very supportive of the comp plan language changes, but you mentioned the hierarchy of verbs, and maybe offline you could tell me talk to me about that?
Or what, what is the hierarchy and how do you feel about the comp plan?
Elana Pirtle-Guiney
Thank you.
Sure.
Jamie Dunphy
Thank you, Vice President Clark.
Councilor Kanal, last word.
Sameer Kanal
Thanks.
Um, first I want to commend, uh, the presenters and, and specifically BPS.
I think that the fact that there was enough time and possibility for advocates to come up with amendments was because of transparency through the process, and I think that's worth acknowledging.
And, and I'm, I'm seeing not I don't think that there would have been the ability to have counterproposals if this was the first time people were hearing things.
I struggle with the idea of not approaching this with a public safety lens and not approaching this with PBEM here.
I am not interested in how readily available fuel is in a world in which thousands of Portlanders are dead.
I— that's not of, uh, of, of an interest to me.
I, I think, um, the, the hierarchy of verbs is important.
The hierarchy of needs is also important.
And I, I think we are living beings before we are consumers of fuel and anything else.
So those are kind of big picture things, and I'd like to CP them here in the future, ideally with a fully hired, uh, CEI Hub planner, uh, which was funded in last year's budget, uh, to be the lead person presenting on that.
Um, so I'm struggling with that, but I also think it's worth noting— I, I really appreciate the response you gave to Councilor Green— there's not another good place in the city of Portland for these facilities.
I don't know how we get to a place where there is a place outside of it, outside of the city of Portland, unless there is a shortage.
I don't understand how we're planning for a world where we're still 90% of the state's fuel supply being in our city limits in the future.
Even if that amount goes up or down, it's still 90%.
And I don't know how we get there.
I know there's some optimistic thing about the state, like they're gonna do anything.
I'm still waiting on TriMet to be fully funded.
So—.
So, uh, and our public meetings a lot to get fixed.
So I don't know how we fix it absent creating a situation where whatever percentage you're modeling that demand goes down— and I said this back when you presented 4 options— we have to reduce the amount by at least 1% more than that.
We have to make it so that they have to go elsewhere.
And I don't understand how that's not the dominant part of the conversation.
Within the planning space.
On the other side, I want to see PBEM here because it's a different conversation if we were able to get people off of what will be an island in North Portland functionally after a massive seismic event.
It'll be different if the approaches to the St. Johns Bridge were fixed.
It would be different if the roads weren't in the sea.
It'd be different if the Columbia Boulevard Bridge was fixed.
It'd be different if the railways stepped up.
And we've been focusing so much on one franchise in the last couple weeks here that the railway franchise and the 3 bridges over the North Portland Cut has not been discussed.
And how a 5-digit number of people are supposed to get off of this island, I don't understand.
So I struggled with this entire topic today because of— I care about our economy, but there There's no economy without people.
Dan Ryan
Thanks, Mr. President.
Jamie Dunphy
Thank you, Councilor Kanal.
Thank you, colleagues.
Thank you to all our panelists.
Thank you to folks who, uh, were hanging out in the audience with us.
This concludes today's work session.
The legislative record is open.
This work session will be included on the record.
The consideration of the ordinances for the recommended draft of the CEI Hub Policy Project, the comprehensive plan, and Title 33 zoning code amendments is scheduled for a City Council hearing on Thursday, September 24th, 2026 at 2:00 PM.
Consideration of the ordinance for the bulk fuel terminal capacity reduction regulations amendments to Title 17 is scheduled for a City Council hearing also on, on Thursday, September 24th, 2026 at 2:00 PM.
The testimony period for both of these items is open and testimony can be submitted in— hold on a second, y'all.
Testimony can be submitted in writing or orally at the public hearing, both in person and virtually.
This work session is adjourned.
Thank you.