The Multnomah County Board of Commissioners on Nov. 7 got their first glimpse of a proposed policy that would hold fuel companies responsible for spills or releases caused by the gas, diesel, and other hazardous materials stored in the Critical Energy Infrastructure Hub, in NW Portland during a Cascadia Subduction Zone earthquake.
The facilities were built on soil that scientist say will turn into liquid and move several feet during a major earthquake, causing catastrophic environmental and human health damage from the released fuel. The new policy would require companies with 2 million gallons or more of fuel storage capacity to have proof of financial assurance to protect taxpayers from having to pay for damages from a major spill.
“The general public has been calling on us to address the looming risk,’’ said Commissioner Sharon Meieran, who spearheaded the effort to first study and then develop a financial assurance policy. “It's a problem for our community. We’re saying, what can our role be in taking action and how can we align and collaborate at the federal, local, and state level to address this risk?”
Unstable ground
More than 90% of Oregon’s fuel supply is stored at the Critical Energy Infrastructure Hub, a maze of tanks and pipes that stretches for six miles on the west bank of the Willamette River. Many of the tanks are located in Linnton, a residential neighborhood in NW Portland, and are just across the River from the St. Johns Neighborhood in North Portland.
In 2020, Commissioners Sharon Meieran and then-Commissioner Susheela Jayapal instigated an analysis of the the potential impacts of an earthquake on the hub. There is a 37 percent chance of a Cascadia Subduction Zone earthquake in the next 50 years. In February 2022, the County and City of Portland released the seismic risk analysis the two commissioners sought.
The CEI hub was built on filled wetlands along the Willamette River. The analysis found the hub’s aging infrastructure — the average tank is 70 years old — would not withstand the liquefaction expected during a Cascadia-level event when the soil will begin to act like a fluid.
“We decided to put a lot of our tanks in the County not in a bad location, but in the worst location,’’ Chris Voss, director of Emergency Management told the Board at the Nov. 7 briefing. “The soils are subject to liquefaction but also lateral spread. We're expecting these areas to move some 10 to 12 feet from where they are now.”
The study estimated that an earthquake could result in more than $2.6 billion in damages and pose disastrous consequences for the region’s environment, health and safety. But Voss warned that similar disasters such as Exxon Valdez, Deepwater Horizon, and others showed how difficult it was to pay for the immediate impact and remediation if no provisions were in place.
The County’s analysis prompted the Oregon Legislature to move shortly after to develop new state policy and approve the Fuel Tank Seismic Stability Program, requiring CEI hub facilities to assess and mitigate risk from earthquakes. But the risk mitigation does not include financial assurance to pay for potential damages — leaving public agencies and the taxpayers who fund them on the hook for cleanup, remediation, and restoration costs.
Last summer, the Office of Sustainability and Commissioner Meieran’s staff began meeting with community members, scientists, and physicians and reviewing similar policies in California and Washington State.
Sustainability Director John Wasiutynski outlined a draft policy to be considered:
The proposed ordinance would apply to 13 current facilities in the County that store over two million gallons of oil, liquid fuels, or hazardous materials.
Owners/operators would have to demonstrate financial ability to cover costs and damages from a worst-case spill and future/remediation. Facilities subject to the proposed ordinance must demonstrate financial responsibility in an amount determined to be sufficient to cover the costs and damages of a worst-case spill or release of their hazardous contents.
The amount of financial responsibility would be calculated based on storage capacity and whether a DEQ-approved risk mitigation plan has been implemented.
To demonstrate financial responsibility, the owner or operator of a facility would have to submit a statement of proof to the County no later than 18 months after the adoption of the policy to include:
- The financial assurance mechanism used to demonstrate financial responsibility
- Proof that the mechanism(s) provide the minimum amount of coverage required;
- The facility’s total maximum capacity to store, hold, and/or transfer oil or hazardous material.
Owners or operators must also submit an updated statement of proof every three years or as specified by the County. If at any point the owner or operator is unable to demonstrate sufficient financial responsibility, they must notify the County within 30 days.
The ordinance would grant the County enforcement authority, including penalties for noncompliance.
Wasiutynski estimated it would take 18 months after such a policy was adopted to develop the administrative rules needed.
The Board members said they would submit questions about the policy in writing. Commissioner Meieran invited members of the public to learn more and provide input here. The Board is tentatively scheduled to take up the proposed policy on Thursday, Nov. 21, 2024.
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