Add Bulk Fuel Terminal Capacity Reduction Regulations Code to reduce Critical Energy Infrastructure Hub fuel storage by 2036 in support of hazard mitigation

The City of Portland ordains.Section 1. The Council finds:The City has authority to adopt regulations to protect and promote public health.The State of Oregon and the greater Pacific Northwest are vulnerable to powerful subduction zone earthquakes that occur periodically along the Juan de Fuqua and North American plates.In the past, both the Huu-ay-aht First Nation peoples and the Makah tribe shared stories of lost land and peoples as a result of these earthquakes and tsunamis, which scientific research has matched with Japanese tsunami records and on-the-ground geologic field research to reconstruct the Cascadia earthquake of 1700. This research shows that subduction zone earthquakes have occurred along the Pacific Northwest with relative regularity over the last 10,000 years, and if averages from past events are predictive, the region could be overdue for another powerful subduction zone earthquake.Fuels stored in areas subject to natural hazards, such as liquefaction, wildfire and landslides, pose risks to safety, public health, and livability, including mobility of people, freight, and other commercial vehicles.The Critical Energy Infrastructure (CEI) Hub in northwest Portland consists of eleven (11) bulk fuel terminals and the area is subject to multiple natural hazards, including liquefiable soils, wildfire and landslides.The CEI Hub, which consists of Oregon's primary liquid fuel storage and distribution facilities, receives 90 percent of the state's liquid fuel supply either via pipeline or marine vessel. Most of the fuel storage tanks within the CEI Hub were built before seismic design requirements in Oregon's building codes were adopted in 1993.The facilities that comprise the CEI Hub are vulnerable to failure in the event of subduction zone earthquake. A 2012 Oregon Department of Geology and Mineral Industries (DOGAMI) Earthquake Risk Study for Oregon's Critical Energy Infrastructure Hub report states that a magnitude 8 or 9 Cascadia Subduction Zone earthquake would impact the CEI Hub with: ground shaking; liquefaction; lateral spreading; landslides; and bearing capacity failures. The study also notes that, at the time, only three existing storage tanks were known to have addressed liquefaction vulnerabilities.The Portland Bureau of Emergency Management's Mitigation Action Plan (2021) identifies how natural hazard events like floods, landslides, and earthquakes might affect the City of Portland. The Portland area has experienced numerous earthquakes in the past, ranging from Magnitude 4.5 to 9.0. Portland is expected to experience seismic events in the future.Most of Portland's industrial districts, especially those areas with river access, are located in areas with a high probability of soil liquefaction, as documented by the 2018 DOGAMI Earthquake Regional Impact Analysis, during an earthquake. Fuel storage and associated transloading infrastructure pose considerable risks in the event of a major earthquake as documented by the Portland Bureau of Emergency Management's 2016 Critical Energy Infrastructure Hub Study; the 2012 DOGAMI Earthquake Risk Study for Oregon's Critical Energy Infrastructure Hub report; the 2019 Portland State University Critical Energy Infrastructure Hub Fuel Tank Seismic Assessment, and the 2022 Multnomah County/City of Portland Impacts of a Cascadia Subduction Zone Earthquake on the CEI Hub.The Portland Bureau of Emergency Management's 2021 Mitigation Action Plan identifies how natural hazard events like floods, landslides, and earthquakes might affect the City of Portland. The Portland area has experienced numerous earthquakes in the past, ranging from Magnitude 4.5 to 9.0. The plan defines mitigation as "actions to reduce potential hazard effects or risk."Tribal communities in Oregon have expressed the importance of protecting the river, a life sustaining and sacred water. They have shared their support for efforts to reduce risks associated with the storage of fuel in natural hazard areas near the river and the related threats to human health, cultural heritage, and environmental quality.Regulating and reducing the quantity of fuel storage capacity in a natural hazard area will mitigate the risk to the surrounding community, industrial district, the Willamette River, and Portland as a whole.The Bulk Fuel Terminals (BFT) Capacity Reduction Regulations mitigate risk by advancing the City's understanding of fuel storage conditions and reducing fuel storage capacity in the CEI Hub. The regulations balance risk reduction from fuel storage in a natural hazard area with the need to allow for the continued supply of Oregon's fuel. These regulations in conjunctions with other city and state regulatory requirements can help reduce risk from the terminals and support increased safety and resilience for the community and environment.The BFT Capacity Reduction Regulations feature:Inventory requirements to establish existing storage capacity, and understand material storage conditions and trends in usage and needs;Storage tank capacity reductions by December 1, 2036;Inventory verification processes, including public notification and opportunity for comment;Process and fines for violations;Establishment of a CEI Hub Mitigation Improvement Sub-Fund for receipt of any violation penalties for use toward impact mitigation investments; andEstablishment of administrative fees to cover staff costs of implementation. Administrative fees are required for the processing and verification of the required inventories and for a possible appeal of an inventory's verification. The fees are based on an estimate of the number of staff hours required to complete the work and the billing rates of the staff assigned to complete the work.On June 3, 2026, a draft version of the Title 17 BFT Capacity Reduction Regulations report was released for public review and public comments were accepted through June 30, 2026. BPS received over fifty (50) written public comments submitted through the Map App.On August 17, 2026, the Bulk Fuel Terminal Capacity Reduction Regulations, Amendments to City Code Title 17, dated August 2026, was released for public review.On September 16, 2026, the Finance and Governance Committee of the Whole held a hearing on the Bulk Fuel Terminal Capacity Reduction Regulations, Amendments to City Code Title 17, dated August 2026, and invited public testimony.The City Council held a hearing on the Bulk Fuel Terminal Capacity Reduction Regulations, Amendments to City Code Title 17, dated August 2026, on October 21, 2026, and invited public testimony.The City Council finds that large bulk fuel terminals at the CEI Hub represent a risk to people, property and the natural environment that the City Council finds as a compelling reason to limit future risk by requiring documentation of fuel storage tank status, materials stored, and fill levels to have as complete a picture as possible of BFT operations and reducing the future fuel storage tank capacity at existing terminals. Reducing fuel storage capacity at BFTs in a moderate- to high-risk area will mitigate the risk to the community, environment and economy.The Council recognizes that there is a need for an actual reduction in demand for liquid fuel. Therefore, it is incumbent on the City to do what it can to reduce demand. Accordingly, Council expresses our commitment to work with the PCEF committee and other stakeholders to ensure that in the next Climate Investment Plan we bring our investments in transportation more in line with the 40% of emissions coming from the transportation sector, and increase the percent of Portland Clean Energy Fund dollars spent on transportation measures to promote transit, biking, walking, transition to electric cars, and the reduction of diesel emissions.Bulk Fuel Terminal Capacity Reduction Regulations, Amendments to City Code Title 17, dated August 2026, are not intended to implement the Comprehensive Plan, apply regardless of whether there is a pending land use application, and are consistent with the City's interest and authority in protecting public health and safety.NOW, THEREFORE, the Council directs:Add City Code Chapter 17.112 as shown in Exhibit A.The City Administrator is authorized to implement procedures and administrative rules as necessary to implement these regulations.The Bureau of Planning and Sustainability will provide a report to City Council in 2028, 2031, and 2036 on the status of Oregon DEQ Risk Mitigation Implementation Plans (RMIPs), updated fuel demand projections and the capacity reduction program.The City Administrator shall present a report to Council no later than September 30, 2027, outlining the City's public health and natural hazards risk reduction plan for the CEI Hub. The City Administrator will present an interim update to Council on progress toward this deadline no later than March 31, 2027.This report must include, at a minimum, prevention, mitigation, and response measures from the Bureau of Planning and Sustainability, Portland Permitting and Development, Portland Bureau of Emergency Management, and Portland Fire and Rescue, such as:Evacuation plans from Linnton and other affected areas of Northwest Portland;Evacuation plans from North Portland west of the railroad cut, including at a minimum plans for seismically resilient bridges across the railroad cut;A proposal for Industrial Firefighting Capacity that can access the broader CEI Hub / Linnton area without the use of infrastructure which is likely to be unusable in the case of a major natural disaster (e.g. bridges across the Willamette River);A proposal for Fire & Rescue capacity for North Portland west of the railroad cut that can access the area without the use of infrastructure likely to be unusable in the case of a major natural disaster (e.g. sufficient capacity for the area at Fire Station 22);A proposal for emergency supplies and resources (e.g. BEECN, NETs) needed for all areas that may be affected by various disaster scenarios involving the CEI Hub. City Council recognizes that the risk posed by the CEI Hub to Portland communities will not be fully mitigated by this proposal by 2036. Council commits to continued engagement with CEI Hub terminal operators, the Oregon Department of Energy, the Oregon Department of Environmental Quality, and community stakeholders, and directs that the status of this continued engagement be included in each of the Bureau of Planning and Sustainability's annual reports to Council, alongside updates on RMIP status and fuel demand projections. Council further commits to continue working to reduce the total fuel stored at the CEI Hub and reduce risk to Portland over the coming decades, beyond the requirements established by this ordinance. Council will continue stakeholder engagement after 2036. The City Administrator shall submit to Council an initial draft available for public comment no later than June 30, 2027 and an updated draft to City Council by September 1, 2027, recommendations for replacement approaches to the fuel reduction program based on the data that the bulk fuel terminals report to the City by March 31, 2027. Section 2. If any section, subsection, sentence, clause, phrase, diagram, designation, or drawing contained in this Ordinance, or the plan, map or code it adopts or amends, is held to be deficient, invalid or unconstitutional, that shall not affect the validity of the remaining portions. The Council declares that it would have adopted the plan, map, or code and each section, subsection, sentence, clause, phrase, diagram, designation, and drawing thereof, regardless of the fact that any one or more sections, subsections, sentences, clauses, phrases, diagrams, designations, or drawings contained in this Ordinance, may be found to be deficient, invalid or unconstitutional.