The Board of Commissioners on Thursday passed a resolution to oppose any new and expanded infrastructure for transporting or storing fossil fuels in Multnomah County. The measure also supports the County’s efforts to explore requiring industry to bear the full cost of potential damages caused by their fossil fuel infrastructure.
The County will, in partnership with the City of Portland, undertake an analysis to measure the potential risk from fossil fuel infrastructure in what’s known as the Critical Energy Infrastructure Hub in Northwest Portland. The analysis will also investigate the feasibility of amending County Code to require operators in the Hub cover the risks of damage from their products associated with a natural disaster such as a 9.0 Cascadia earthquake.
The Hub refers to a six-mile stretch of Northwest Portland’s waterfront where industry, over the past century, has built tanks and other infrastructure with the capacity to store 360 million gallons of fuel. Ninety percent of Oregon’s liquid fuel, most of its natural gas and 100 percent of its jet fuel passes through the Hub.
Because the Hub is so old, it’s based on antiquated building codes and outdated or nonexistent seismic standards. Oregon's largest natural gas provider gets most of its natural gas from pipelines — buried below the Columbia and Willamette rivers — that were built during the 1960s without consideration of a major quake.
Soften, shift, slump and spread
“We still hear ‘if this is going to happen.’ It’s not ‘if.’ It’s ‘when,’” Chris Voss, director of Multnomah County’s Office of Emergency Management told the Board Thursday. “There have been 41 previous quakes over 10,000 years. There will be a 42nd. We don’t know when, but it will happen.”
Plenty of reports point to the risks of a Cascadia quake in the state, Voss said, but nowhere are those risks more dire than along the Hub.
The Oregon Department of Geology and Mineral Industries conducted an earthquake risk study of the Hub in 2012 to assess seismic hazards and identify vulnerabilities of petroleum, natural gas, and electrical energy facilities that include high-voltage electricity transmission, fuel pipelines, tank farms, and fuel port terminals.
Researchers found the Hub is built on loose, water-saturated, sandy soils along the river, making it particularly vulnerable to liquefaction, spreading fissures and slumping. A full rupture of the Juan De Fuca tectonic plate, 63 miles west of Portland, would cause the ground beneath the Hub to soften, shift, slump and spread while the hills above it would slide. A quake could also likely cause fires and hazardous material spills from holding tanks at the Hub.
Researchers in 2012 called on energy companies to integrate seismic mitigation into their business practices, conduct seismic vulnerability assessments and implement long-term mitigation plans. They called on Oregon’s Homeland Security Council to review the Hub’s vulnerability and “consider action within the scope of their mission to improve the resilience of the system to natural disasters.”
In 2017 state legislators considered HB 2889, which would have established a task force to examine safe transportation, storage and transference of petroleum and natural gas. The bill died in committee.
Commissioner Sharon Meieran, who sponsored the resolution, said she first learned about the risk after watching Oregon Public Broadcasting’s 2015 documentary, Unprepared, an in-depth look at Oregon's lack of preparedness for a major earthquake that featured the energy hub.
“Go to minute 12. It will frighten you,” Meieran said. “This resolution tells the community that Multnomah County is taking this seriously. This resolution marks the beginning of a lot of work and the possibility of moving forward with a risk bond analysis. Then we will work together to implement code changes to place responsibility where it belongs — on the companies themselves.”
Advocates in the Portland metro region have pushed local officials to take action. In 2016 the Portland City Council voted to restrict development or expansion of bulk fossil fuel terminals, and this month the City rejected a proposal by one company to build new pipelines to its facility in the hub. Commissioners Meieran and Susheela Jayapal have held two public hearings about the risks at the Hub, in Linnton and St. Johns.
John Wasiutynski, director of the County’s Office of Sustainability, laid out the case Thursday for local action on fossil fuel storage and shipping.
Federal law limits the liability fossil fuel companies face when there’s an incident such as a major spill. Federal assistance doesn’t close that gap between what companies would pay and the actual cost of an incident. Courts provide a recourse to recover some damages, but that can be a long and uncertain path. And then there are exemptions for “Acts of God,” such as an earthquake, for which a company might be held blameless.
“It’s really going to be taxpayers on the hook for those losses,” Wasiutynski said.
A model for Oil Train oversight
The resolution calls on Portland and Multnomah County officials to quantify the financial exposure of an incident in fossil fuel storage and identify mechanisms to insure against those risks, such as requiring companies obtain adequate insurance or else lose their ability to operate.
Commissioner Lori Stegmann, who owns a personal insurance company in Gresham, raised a concern that few companies would insure on their own against an inevitable quake.
“Someone should pay for it, and it probably should be the oil companies,” she said. “Really that could motivate oil companies to be better partners.”
Wasiutynski agreed. He said a financial mechanism might include some kind of bond to insure against risk and pay decommissioning costs up front. Governments might consider incentives for companies that retrofit and replace old facilities.
Commissioners Stegmann and Jayapal asked that future discussions also include oil trains that snake up and down the Gorge and then through densely populated parts of the County.
“Some mechanisms could be applicable,” Jayapal said. “They’re not directly being studied, but this might give us some pointers on how to deal with oil trains as well.”
Now is the time
City Commissioner Jo Ann Hardesty said she was “thrilled” at the partnership.
“When the event happens, there will be a devastating impact on our communities. And if we’re not forward-thinking, we’ll be in the same position as we were with the Willamette, where polluters have disappeared and changed the names of their companies. It’s not acceptable and we will not allow that to continue.”
Mike Myers, director of the Portland Bureau of Emergency Management, said the city is finalizing rules that will require companies to retrofit old facilities. He said he looks forward to a deeper examination of economic impacts of a disaster, and options for cleanup and remediation.
“We do have a responsibility to do something,” he said, and he said the right people are on the job. “This administration at the County and this administration at the city, I think now is the time.”
$5 trillion a year
John Talberth, executive director at the Center for Sustainable Economy, applauded the partnership, but encouraged officials to act swiftly.
“The time is long past when humanity can afford to live on fossil fuels,” he said, citing the County’s resolution as an imperative. Requiring polluters to pay for the full cost of doing business — including damages from those businesses — will accelerate a transition to carbon-free industry, he said.
“Wind and solar cannot compete as long as we subsidize fossil fuels at a rate of $5 trillion per year and let fossil fuel externalize disasters and the staggering cost of climate change,” he said, calling the plan to study the scope of financial risk, and implement financial assurance policies to shift that risk, a “game-changing strategy” that can serve as a model.
Talberth encouraged the County and city to minimize the time between the risk assessment and policy implementation. He said the assessment should focus on performance bonds and assurance mechanisms that would require companies set aside money to reimburse costs now borne by taxpayers and bond against the risk of abandonment. He said Superfund sites are a result of the failure to require those bonds.
“We need to make sure money is there to dismantle and restore sites,” he said.
Make polluters pay
The City of Portland and Multnomah County began meetings this week in what will be months of research. They plan to return to elected officials next year with recommendations.
“Federal law falls horribly short in holding polluters accountable,” said Commissioner Jessica Vega Pederson. “I look forward to partnering with the city and state to strengthen the laws. I’m glad the County will be taking a look at the costs and possible mechanisms for holding people accountable.”
Chair Deborah Kafoury vowed the Board will act once it receives those recommendations. “When we learned the courthouse would crumble in an earthquake, we mustered the resources to build a new facility,” she said. She also said commissioners when they learned the old Sellwood Bridge would be unsafe in an earthquake, and are now raising money and support to replace the Burnside Bridge, too.
But the risk from the energy hub is even more daunting, she said.
“The long-term strategy is clear: We need to eliminate the need for these fuels altogether,” Kafoury said. “They pose a huge risk during a quake. These fuels are destroying our atmosphere. But as we move toward that fossil-fuel free future, we need strategies to incentive risk mitigation and ensure that polluters pay.”