30 de septiembre de 2026 · Ordinance · 2026-311

Adopt the Critical Energy Infrastructure Hub Policy Project to support public health and natural hazards risk reduction (amend Code Titles 33 and 24)

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Document number

2026-311

Introduced by

Mayor Keith Wilson

City department

Planning and Sustainability (BPS)

Requested council date

November 5, 2026

Purpose and background

The CEI Hub Policy Project will update Comprehensive Plan policies, the zoning code, and other city regulations related to existing bulk fuel terminals. New bulk fuel terminals have been prohibited in Portland since 2022. The primary purpose of the project is to support safety and risk reduction for existing bulk fuel terminals within the CEI Hub. The CEI Hub is a six-mile stretch of land in northwest Portland located along the Willamette River. It contains facilities that store and distribute fuels as part of a supply chain critical to Oregon's fuel infrastructure, with more than 90 percent of the state's liquid fuel supply stored at and passing through the CEI Hub via pipeline, barge, or rail have found that the concentration of bulk fuel terminals in the CEI Hub presents significant risks, primarily due to the CEI Hub's location on land with a high risk of liquefaction. In the event of a major earthquake, particularly a Cascadia Subduction Zone (CSZ) event, storage tanks in the CEI Hub are likely to fail, releasing fuel and other hazardous materials. Such a disaster would pose serious threats to human health and to the environment, including waterways, air quality, and adjacent natural areas. Studies have found that the concentration of bulk fuel terminals in the CEI Hub presents significant risks, primarily due to the CEI Hub's location on land with a high risk of liquefaction. In the event of a major earthquake, particularly a Cascadia Subduction Zone (CSZ) event, storage tanks in the CEI Hub are likely to fail, releasing fuel and other hazardous materials. Such a disaster would pose serious threats to human health and to the environment, including waterways, air quality, and adjacent natural areas.

Financial and budgetary impacts

This project does not amend the budget, change staffing levels, reclassify staff, or authorize new spending or other financial obligations (IGAs, contracts, etc.) and therefore there are no financial or budgetary impacts to the City. The amendments to Title 33 include three new land use reviews related to bulk fuel terminals. Portland Permitting & Development will apply the Type III unassigned review fee. PP&D has indicated that due to the expected low number of these reviews, additional fees will not need to be updated until the next budget cycle.

Economic and real estate impacts

How was the proposed legislation shared with those potentially impacted? How much time did they have to provide input? The project included outreach to a broad range of stakeholders, including Bulk Fuel Terminal operators, fuel industry organizations, the Working Waterfront Coalition, the Portland Metro Chamber, public agencies, Tribal governments, community and neighborhood organizations, environmental groups, labor representatives, and members of the public. Beginning in Spring 2025, the project team began connecting with wide variety of stakeholders, including Bulk Fuel Terminal operators and related fuel industry organizations. Many of these stakeholders participated in multiple rounds of public input, including concept development discussions in Summer 2025, providing comments on alternatives in the Discussion Draft in September 2025, and providing testimony to the Planning Commission in December 2025/January 2026. The engagement included small group meetings, one-one-one meetings and email exchanges in response to specific questions. Appendix A of the Recommended Draft includes a detailed summary of the public engagement activities. What feedback was shared? How did it shape the proposed legislation? Strong community support for prohibiting the expansion of storage capacity for all fuel types, regulating transloading, and requiring additional safety elements. This testimony resulted in proposed regulatory elements limiting expansion of in-service storage capacity for all types of fuel. Strong community concerns about the risks associated with the expansion of transloading infrastructure and potential weaknesses in the related land use review approval criteria. The proposed regulations (outlined in Section 3 of the proposed draft, code section 33.870.040) further regulate transloading facilities by requiring a land use review for expansion of transloading facilities. Strong concerns from state agencies, the Port of Portland, other Oregon cities and business groups about how limiting aviation fuel storage capacity expansions (and the Title 17 drawdown requirement) could impact aviation costs and statewide emergency response, fuel resilience, economic vitality, and transition to renewable fuels. This testimony influenced the decision to add a land use review to allow each terminal to expand by 5 percent capacity specifically for aviation fuel storage capacity. Strong concerns from state agencies, the Port of Portland, other Oregon cities and business groups about potential widespread economic impacts from the proposed amendments and need for further analysis on economic impacts. Since the Planning Commission recommendation, the City commissioned an independent economic impact analysis from ECOnorthwest (ECO) to independently review the Parametrix fuel demand model and to provide an additional economic assessment to understand how fuel prices might impact Oregon's economy. ECO produced two memos: 1) a review of the fuel demand model; and 2) an analysis of the impact of incremental fuel price increases on Oregon's economy. The findings of the memos identify uncertainty in key assumptions. BPS has recognized that uncertainty and has used more conservative assumptions as a hedge against that uncertainty. Given the available data, ECOnorthwest finds that a potential outcome is that the proposed regulations will not impact the price of fuel. In addition, they note that storage capacity is not the sole factor in determining fuel supply or price impacts. There are other factors that impact fuel prices and there remains uncertainty, especially due to the lack of available data, about what, if any, impact the regulations may have on fuel prices. Strong community concerns about the near- and long-term risks to the community and environment from not accelerating safety improvements at the CEI Hub facilities and not reducing fuel storage. The CEI Hub Policy Project Recommended Draft includes provisions that require new tanks be constructed to OSSC Risk Category IV standards. What types of business and/or development projects might be affected and how could business and/or development activity by impacted? The proposed legislation primarily affects existing Bulk Fuel Terminal uses by limiting expansion of fuel storage capacity and establishing new development standards for those facilities. Existing bulk fuel terminals may need to modify future capital investment plans to comply with the new regulations, particularly if those plans involve expanding fuel storage capacity. However, the proposed regulations are intended to allow existing terminals to continue operating while providing operational flexibility, including provisions allowing modest expansions for aviation fuel storage where specified review criteria are met. The regulations do not apply broadly to other industrial uses and do not change underlying industrial zoning or Comprehensive Plan land use designations. Other industrial and commercial uses can continue to develop under existing zoning and development standards and are not expected to be directly impacted. How does this action influence the timeline and cost of doing business or real estate development in Portland as compared to peer cities? One concern raised by fuel industry representatives and the broader business community was whether limiting future fuel storage capacity expansions could constrain fuel supplies and indirectly increase the cost of doing business. To evaluate this issue, the City reviewed multiple sources of information on existing and future fuel demand, including historical fuel consumption trends from the U.S. Energy Information Administration (EIA), fuel demand forecasts prepared by the EIA and the Oregon Department of Energy (ODOE), and project-specific fuel demand modeling prepared by Parametrix, all of which are described in the Economic Impact Analysis section of the CEI Hub Policy Project Recommended Draft. Collectively, these analyses indicate that petroleum fuel consumption has remained relatively flat or declined over recent decades and is projected to decline over the long term. Building on these national and statewide forecasts, the Parametrix model evaluated whether the CEI Hub's existing storage capacity would be sufficient to meet projected fuel demand. The model projects that overall Oregon liquid fuel demand remains relatively stable over approximately the next decade before declining through 2050, indicating that existing storage capacity is expected to remain sufficient and that additional fuel storage capacity is not needed. Aviation fuel is the primary exception to this trend, with demand projected to increase over time. However, aviation fuel represents a relatively small share of Oregon's overall liquid fuel demand, about 7.5% of demand in 2023 according to EIA data, and the proposed regulations include a limited allowance for aviation fuel storage capacity expansions. Based on the available information, the City does not expect the proposed limitations on fuel storage capacity expansion to constrain projected fuel supply or materially affect the overall cost or timeline of business or real estate development in Portland relative to peer cities. NW Natural, whose Portland facility primarily serves as a peak-demand natural gas facility during periods of high winter demand, raised concerns that the proposed regulations could affect infrastructure needed to support system reliability. While the proposed regulations limit expansion of fuel storage capacity and transloading infrastructure, they provide a land use review pathway for expansion of transloading facilities. This pathway allows proposals to be evaluated on a case-by-case basis while maintaining the overall objectives of the CEI Hub Policy Project. Existing Bulk Fuel Terminal operators may incur additional operational costs if limitations on storage capacity expansion require changes to terminal operations. However, the extent of any such costs is difficult to evaluate because information on key operational constraints is not publicly available. The proposal does not change industrial zoning, reduce the supply of industrial land, or change development standards applicable to most commercial and industrial businesses. How would the proposed legislation impact business competitiveness and job growth, affordability, costs of goods, and/or household income? One concern raised by fuel industry representatives and the broader business community was that limiting future fuel storage capacity expansions could render the CEI Hub's fuel supply unreliable, increase fuel prices, and thereby affect business competitiveness, the cost of goods, and household expenses. The City does not expect those outcomes based on the available information. To evaluate this issue, the City reviewed historical fuel consumption trends from the U.S. Energy Information Administration (EIA), fuel demand forecasts prepared by the EIA and the Oregon Department of Energy (ODOE), and project-specific Oregon fuel demand modeling prepared by Parametrix, all of which are described in the Economic Impact Analysis section of the CEI Hub Policy Project Recommended Draft. Collectively, these analyses indicate that petroleum fuel consumption has remained relatively flat or declined over recent decades and is projected to decline over the long term. Building on these national and statewide forecasts, the Parametrix model projects that overall Oregon liquid fuel demand remains relatively stable over approximately the next decade before declining through 2050, indicating that the CEI Hub's existing storage capacity is expected to remain sufficient to meet projected fuel demand without additional fuel storage capacity. Aviation fuel is the primary exception to this trend, but the proposed regulations include a limited allowance for aviation fuel storage capacity expansions to address projected increases in aviation fuel demand. Based on the available information, the City does not expect the proposed limitations on fuel storage capacity expansion to constrain projected fuel supply or materially affect business competitiveness, affordability, costs of goods, or household income through fuel price increases. Historically, employment in bulk fuel terminal uses has been relatively stable, accounting for approximately 1,300 jobs, or about 0.3 percent of Portland's total employment. The proposed regulations do not change industrial zoning or reduce the City's industrial land supply. As a result, the proposed legislation is not expected to materially affect Portland's long-term job growth. The regulations are also intended to reduce long-term economic risk associated with the concentration of fuel storage in a seismically vulnerable area. A 2022 study by ECOnorthwest found that a major Cascadia Subduction Zone earthquake could result in substantial fuel releases, environmental damage, disruptions to regional fuel supply, and societal costs estimated in the hundreds of millions to billions of dollars. While those avoided costs cannot be quantified as direct economic benefits of the proposed regulations, reducing exposure to catastrophic losses is an important policy objective underlying the proposal. How might this proposed legislation impact real estate development project feasibility and housing production? The proposed legislation is not expected to impact housing production or the feasibility of residential or mixed-use development projects because it applies only to existing Bulk Fuel Terminal uses located on industrially zoned land. The proposal does not amend residential zoning or increase development requirements for housing, nor does it change underlying industrial zoning or reduce Portland's supply of industrial land. How might potential adverse impacts from this proposed legislation be mitigated? The proposed legislation was developed to reduce seismic and environmental risk while preserving operational flexibility for existing bulk fuel terminals. Several provisions were included to mitigate potential operational impacts.Bulk fuel terminals are allowed a 5% capacity expansion for storage of aviation fuel. The provision allowing for an expansion for aviation fuel storage capacity was added in response to testimony from the Port of Portland and aligns with the anticipated demand for aviation fuel included in the Port's PDX 2045 Master Plan. The regulations included a land use review that allows bulk fuel terminals to transfer fuel storage capacity between terminals so long as the criteria outlined in Section 3 of the recommended draft (code section 33.870) are met. Bulk fuel terminals also have flexibility in types of fuels that can be stored. The regulations do not prohibit terminals from using existing in-service fuel capacity for different fuel types in response to changing market conditions. The regulations limit only the total amount of in-service fuel storage capacity at each terminal. They do not dictate the number or configuration of storage tanks, allowing terminal operators to reconfigure existing storage capacity into different sized tanks over time to respond to market needs. The ordinance requires periodic reports to City Council in 2028, 2031, and 2036 on implementation of the program, including updates on fuel demand projections and other relevant information. These reports provide opportunities to evaluate changing conditions and consider whether adjustments are warranted. The proposed regulations limit storage capacity but do not regulate fuel throughput or fuel volumes. Bulk fuel terminals retain flexibility to manage fuel inventories and throughput in response to changing market conditions.

Community impacts and community involvement

The primary purpose of the project is to support safety and risk reduction for existing bulk fuel terminals within the CEI Hub. The CEI Hub is a six-mile stretch of land in northwest Portland located along the Willamette River. It contains facilities that store and distribute fuels. As such, this project impacts everyone who lives or works within proximity to the CEI Hub. The amendments are intended to increase safety and reduce risks from catastrophic events affecting the hub. This will have a positive impact on affected communities. The amendments have also been designed to mitigate negative impacts to the industry by allowing for expansion of certain fuel-related infrastructure when justified by a need for expansion and when the additional infrastructure is built to meet the highest possible seismic requirements. Community involvement for this project has been extensive and is described in detail in Appendix A of Exhibit B. The project's engagement efforts build on years of community work and organizing around issues and concerns related to the CEI Hub. Beginning in early 2025 and continuing through the Planning Commission and City Council phases of the project, project staff has engaged with community and neighborhood organizations, environmental organizations, tribal governments, bulk fuel business and industry representatives, academics and experts on aspects of the CEI Hub, labor organization representatives, and Oregon Department of Environmental Quality Seismic Stability Program staff. Stage 1 engagement focused on robust dialogue and exchange of ideas with a wide variety of interested parties informed staff's work towards the creation of the preliminary policy and regulatory alternatives. Stage 2 of community engagement was to share draft alternative concepts for policy and regulatory changes and seek public feedback to inform staff's work on the Proposed Draft. Stage 3 has been the legislative process. The Planning Commission heard oral testimony on the proposed draft from 63 people at the December 16 hearing and received over 155 pieces of written testimony. Testifiers expressed many concerns and perspectives, including the following broad themes: Strong concern about the near- and long-term risks for the community and environment of not reducing fuel storage and not accelerating safety improvements at the CEI Hub facilities. Strong support for prohibiting the expansion of storage capacity for all fuel types, regulating transloading, and requiring additional safety elements. Strong support for a storage capacity reduction ("drawdown") requirement, but stressing need for the reduction required to be greater than 20% and to begin sooner. Strong concern about impacts of transloading expansion allowances and potential weaknesses in the related land use review approval criteria. Strong concern about how limiting aviation fuel storage capacity expansions and the drawdown requirement could impact aviation costs and statewide emergency response, fuel resilience, economic vitality, and transition to renewable fuels. Strong concern about potential widespread economic impacts from the proposed amendments and need for further analysis on economic impacts. Staff expect that City Council will hear testimony from community and neighborhood organizations, industry and industry-related business organizations, individuals who live in proximity to the CEI Hub, environmental organizations, and others.

100% renewable goal

This project does not increase or decrease the City's total energy use, nor does it increase or decrease the City's renewable energy use.