Portland report clears Zenith Energy franchise agreement process as scrutiny continues over permits and enforcement history
Investigation concludes city rules were followed
The City of Portland has released the results of an investigation into its franchise agreement and related administrative actions involving Zenith Energy’s fuel terminal in Northwest Portland. The city’s report concludes there were no material compliance issues and no violations of codes or regulations that Portland administers and enforces connected to Zenith’s operations under the franchise agreement. An independent review by the law firm Cable Huston also found the city’s franchise review reasonably addressed the City Council’s directives and did not identify a basis to revoke the franchise agreement.
Why the investigation was ordered
Portland City Council directed the investigation after a period of heightened public and political scrutiny over how the city handled land use compatibility steps tied to Zenith’s ongoing permitting. In March 2025, councilors passed a resolution calling on the mayor to pause administrative actions related to Zenith until an investigation of the franchise agreement was completed. The resolution also directed city staff to evaluate whether a 2024 greenway review complied with land use laws, including consideration of a December 2024 enforcement action by the Oregon Department of Environmental Quality (DEQ).
Key permit and enforcement milestones in the case
Dec. 6, 2024: DEQ continued a pause in Zenith’s air-quality permitting process, requested a city-issued Land Use Compatibility Statement (LUCS) that covered additional operations, and issued a civil penalty for unauthorized use of a marine dock over a multi-year period.
Feb. 3, 2025: Portland processed and issued a LUCS determination as a procedural step required by the state for DEQ’s air-permit review. The city described the LUCS as a compatibility determination under existing local land use regulations, not a stand-alone permit.
Oct. 9, 2025: DEQ approved Zenith’s application for a Standard Air Contaminant Discharge Permit, setting enforceable air-quality conditions under state rules.
Findings and what they do not resolve
The city’s investigation focused on whether Portland staff acted properly under city processes and whether there was a basis to determine Zenith violated the franchise agreement in a way that could support revocation. The report’s conclusion does not eliminate broader debates about fossil fuel storage and transport at the Critical Energy Infrastructure Hub, nor does it replace state regulatory decisions that govern air-quality permits, enforcement penalties, and related compliance obligations.
The city’s report concludes it found no material compliance issues or city-enforced code violations tied to Zenith’s franchise agreement, and outside counsel’s review found no basis for franchise revocation in the circumstances evaluated.
Separate city oversight actions remain part of the record
Earlier oversight actions have examined other aspects of Zenith’s engagement with city government. In March 2024, the City Auditor’s office issued a warning letter finding Zenith violated Portland’s lobbying regulations in 2022 by exceeding reporting thresholds without registering and reporting as required.
Ownership plans add a new layer to the discussion
In December 2025, private equity firm I Squared Capital announced a definitive agreement to acquire 100% of the Zenith Energy Terminal in Portland, a transaction described as subject to customary regulatory approvals and closing conditions. The acquisition announcement described plans tied to a renewable-fuels focus and a transition timeline extending into 2027, placing additional attention on how the terminal’s future operations will intersect with local policy debates and state permitting oversight.