The state Land Use Board of Appeals has overturned a Portland ordinance that restricted new and expanded fossil fuel terminals in the city, saying it violated the commerce clause of the United States Constitution, which gives Congress the power to regulate interstate commerce.
The LUBA decision, issued last Wednesday, is a victory for the Western States Petroleum Association — the main oil industry trade group here — as well as the Portland Business Alliance and the Columbia Pacific Building Trades Council.
The ordinance banned significant new fossil fuel storage facilities and sharply restricted the expansion of existing terminals. It largely affected about 11 sizable terminals in the Northwest industrial district, whose owners include Chevron, Phillips 66, Shell, BP, Kinder Morgan and NW Natural. Those facilities store and distribute most of the petroleum and natural gas consumed in Oregon and Southwest Washington.
Business groups were alarmed the ordinance could leave the state without enough energy to serve the growth of manufacturing, transport and other sectors.
Environmentalists had cheered the ordinance, championed by former Mayor Charlie Hales, as a way to speed the transition of the local economy off fossil fuels, the chief contributor to human-caused global warming.
"Oregon's energy independence hinges on the ability to safely store petroleum products in Portland, as 90 percent of the fuels consumed in the state pass through the city," said Western States Petroleum Association President Catherine Reheis-Boyd, in a prepared statement. "This common-sense ruling ensures consumers and businesses have continued access to the reliable, affordable energy that fuels our state's economic growth."
The Portland Business Alliance said it supported the City Council working to address climate change, but not this policy. "The Portland Business Alliance is looking forward to working with the city on next steps which are both legal and in line with the constitution," the group said in a prepared statement.
Mayor Ted Wheeler issued a statement saying he was disappointed with the LUBA ruling. "It is incumbent upon us to protect our residents from the enormous risks posed by fossil fuels. The city is reviewing the ruling and exploring our options, including an appeal."
Such an appeal would go to the Oregon Court of Appeals.
A coalition of environmental groups issued a statement saying such an appeal is likely.
"While we are disappointed in the decision, we will work to secure a policy that protects Portland and our climate from reckless fossil fuel projects like coal and oil train terminals," said Dan Serres, conservation director for Columbia Riverkeeper, in a statement on behalf of the groups, which were intervenors in the litigation. "The people of Portland overwhelmingly supported this policy and strong climate action," Serres stated. "We will not be dissuaded by the fossil fuel industry's attempt to put our communities and climate at risk."
Environmental groups are digesting the lengthy opinion and exploring whether to appeal, said Nicholas Caleb, staff attorney for the Center for Sustainable Economy in Lake Oswego. "One thing that's in our favor is it's the land use board that's making the constitutional conclusion," Caleb said. "It's not necessarily their area of expertise."