Zenith Energy Management has abruptly called off its plans to build a new chemical pipeline at an oil-by-rail bulk storage terminal in Northwest Portland.
Instead, Zenith will focus on another permit application — this one to build $24 million worth of infrastructure that the company says will be used to unload renewable diesel from trains.
"Consistent with the City of Portland's interest in increasing the use of renewable fuels, we are continuing to move the Renewables project forward," Zenith project manager Dirk L. Kramer wrote to a city planner on Monday, May 11, in an email obtained by the Portland Tribune.
Portland's lone crude oil depot has drawn trains through the Columbia River Gorge like a magnet since it opened up shop in a converted asphalt tank farm in 2017. Environmental activists have protested the Houston-based, private equity backed firm; last year they planted a garden that temporarily blockaded the facility's rail spur.
A city bureau controlled by Portland Mayor Ted Wheeler pointed to that lack of trust when it rejected Zenith's old blueprints for the pipe carrying methylene diphenyl diisocyanate, a chemical used in plastics. Zenith quietly submitted similar plans to a different bureau, and added a proposal for unracking platforms, as the Tribune revealed in April.
Activists say the decision to partially walk away proves that Zenith is more bluster than bite.
"This city has power, and when the city stands its ground, it has a significant ability to protect the health and safety of its residents," said Columbia Riverkeeper Conservation Director Dan Serres. "In the stare-down between Zenith and the city of Portland, it was Zenith that blinked."
Another possibility? The company is sprucing up the balance sheets ahead of a sale.
Zenith was dinged by credit rating agency Fitch on May 6 for having too much debt while still spending big on facility upgrades and maintenance. The next day, Reuters reported that the investment firm that co-owns Zenith, Warburg Pincus, is considering a sale of the company. It might go fast, as the glut in the global oil market has meant gangbuster prices for those in the business of selling liquid storage space.
Zenith didn't immediately respond to a request for comment.
Serres says the company has continued to accept shipments of North Dakota Bakken crude — the same material that ignited a massive fire after a Union Pacific train derailed in the small town of Mosier in 2016.
"Zenith has talked a lot about wanting to move more renewable fuel, and there's nothing stopping them from doing that with existing infrastructure," he said. "It's a dangerous game that they're playing."
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