Pembina’s proposal to transport propane through Portland moves on to City Council; carbon fund established to offset effects of greenhouse gas emissions
On Tuesday, April 7, after a six-hour meeting (including four hours of testimony), Portland’s Planning and Sustainability Commission voted 6 to 4 in favor of recommending zoning code and map amendments to City Council that would accommodate Pembina’s proposal for a propane export facility at the Port of Portland’s Terminal 6.
The Zoning Code and Map amendments included:
- Amend the Environmental Overlay Zone to allow for the transport of propane through a pipe across an environmental overlay zone on sites zoned Heavy Industrial and only when the transporting is part of a river-dependent industrial use.
- Amend the zoning map to extend the existing environmental conservation overlay zone boundary to some of the currently unprotected significant natural resources identified in the adopted 2012 Citywide Natural Resources Inventory.
- Adopt a City-Port intergovernmental agreement (IGA) to address other issues not covered by the Zoning Code.
The IGA Framework covers a wide range of issues. It formally documents many of the commitments made by Calgary-based Pembina and the Port of Portland during the PSC hearings process. Some of the proposed terms address policy issues related to Portland’s Climate Action Plan; others address safety and community relations.
The key terms of the IGA include:
Community Advisory Committee (CAC): Provide a public forum to address operational issues that may affect the surrounding community, i.e. noise, lighting and other nuisance issues.
Safety: Ensure the Port and Pembina implement all of the safety measures, including providing the Portland Bureau of Fire and Rescue with the specialized equipment or training necessary to respond to an incident at the facility.
Onsite Energy Use: Require the facility meets 100 percent of its energy needs for onsite operations from Oregon renewable energy sources.
Grassland Habitat Mitigation: Ensure that the features and functions of the grassland special habitat area affected by the facility are fully replaced.
Environmental Impact Mitigation: Pembina to contribute $6.2 million annually to the Portland Carbon Fund to offset the greenhouse gas emissions (GHG) from the propane itself. The fund will be used for projects that reduce energy consumption, generate renewable energy and sequester carbon.
Liability: Provide insurance and other financial assurances to cover damages from a catastrophic event.
Much of the public testimony and discussion was about safety. Prior to the hearing, the Bureau of Planning and Sustainability provided extensive information to the PSC about safety, including detailed reports from technical experts. The City hired an independent consultant (Arkana) to evaluate Pembina's Quantitative Risk Analysis (QRA) performed by DNV GL, a Norwegian company that specializes in safety reviews for the world gas and oil industry. The final analysis put the odds of an injury to the nearest residents at about one every 10 million years. These and other documents from the April 7 meeting are posted on the PSC website.
Portland Carbon Fund
To account for carbon emissions from the propane, the PSC recommended an annual carbon mitigation contribution of $6.2 million/year to the City. This amount is estimated based on the life cycle of GHG emissions from the exported propane, including the processing, transport and end use of the fuel. These emissions have been discounted to account for some use of the propane in plastics manufacturing and as a transition fuel that will displace dirtier sources of fuel, such as coal and fuel oil.
Pembina’s contribution will be based on the market price for GHG emissions (roughly $6.77/metric ton CO2-equivalent or roughly a penny per gallon) in Europe, which has one of the most well-established trading programs in the world. If propane exports become subject to a carbon fee or pricing mechanism, the contribution will be re-evaluated.
The Portland Carbon Fund will be a separate fund administered by the City of Portland with oversight from an advisory board, much in the same way the City’s Children’s Levy is administered. This fund is different from the Community Investment Fund announced by Pembina and will fund projects across the city that reduce energy consumption, generate renewable energy, and sequester carbon.
With the PSC vote, the amendments and IGA move onto to City Council for another public hearing and a vote, tentatively scheduled for April 30 (time TBD). Check the Council agenda page about a week before to confirm the date and time.
For a recap of the April 7 public hearing and vote, please visit the PSC news feed.