Add Bulk Fuel Terminal Capacity Reduction Regulations Code to reduce Critical Energy Infrastructure Hub fuel storage by 2036 in support of hazard mitigation (add Code Chapter 17.112)

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 and January 2026. 
• The concept of a storage capacity reduction program emerged from community feedback during the Discussion Draft phase of the CEI Hub Policy Project but was not developed into draft Title 17 regulations until Spring 2026. At that time, BPS staff re-engaged with a broad range of stakeholders, including Bulk Fuel Terminal operators and related fuel industry organizations, to review the proposed implementation framework. The draft regulations were available for public comment in June 2026, and the City provided information sessions and an online comment portal to support stakeholder review and feedback.
• The engagement included small group meetings, one-one-one meetings and email exchanges in response to specific questions.
• Appendix A of the Title 33 Amendments Recommended Draft and the Community Engagement section in the Title 17 Bulk Fuel Terminal Capacity Reduction Regulations report include a detailed summary of the public engagement activities.

What feedback was shared? How did it shape the proposed legislation?

• Strong community support for a storage capacity reduction requirement, but stressing need for the reduction to be greater than 20 percent and to begin sooner than 2036. BPS balanced these requests with concerns about maintaining adequate fuel supply and operational flexibility. Based on the available fuel demand analysis, the proposed regulations retain the 20 percent reduction by 2036.
• Several stakeholders questioned whether sufficient operational data existed to support establishing a 20 percent reduction requirement. In response, the proposed regulations were revised to require Bulk Fuel Terminal operators to report three years (2024–2026) of throughput data as part of the baseline inventory requirements (Section 17.112.070.A.3.c).
• Strong concerns from the Port of Portland and other stakeholders that the Title 17 reduction requirement could constrain aviation fuel supplies. In response, the proposed regulations exempt in-service storage tanks used exclusively for aviation fuel from the reduction requirement (Section 17.112.060.C).
• Strong community concerns about the near- and long-term risks to the community and environment from not reducing fuel storage at the CEI Hub. This testimony reinforced support for including a fuel storage capacity reduction requirement as part of the proposed regulations while balancing those objectives with the need to maintain projected fuel supply.
• 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.
• NW Natural raised concerns that the reduction requirements would not be feasible for its regulated utility operations. In response, the proposed regulations exempt regulated public utilities from the storage capacity reduction requirements (Section 17.112.060.A).

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 requiring a 20 percent reduction in in-service fuel storage capacity by 2036. Existing bulk fuel terminals may need to modify future capital investment plans, take fuel storage tanks out of service, or adjust terminal operations to comply with the new regulations. However, the proposed regulations are intended to allow existing terminals to continue operating while providing operational flexibility. The reduction requirement applies only to in-service fuel storage capacity and includes exemptions for regulated public utilities, breakout tanks, aviation fuel storage, and additional storage capacity approved through a Title 33 Fuel Storage Tank Capacity Transfer Review or Aviation Fuel Storage Expansion Review. 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 requiring a 20 percent reduction in in-service fuel storage capacity could constrain fuel supplies and indirectly increase the cost of doing business in Portland. 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 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 and the Title 17 Bulk Fuel Terminal Capacity Reduction Regulations 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 would continue to have sufficient storage capacity to meet projected fuel demand following the proposed 20 percent reduction in in-service fuel storage capacity. The model indicates that, after the required reduction, projected fuel demand remains within the CEI Hub's estimated storage and annual throughput capacity through the planning horizon, with estimated utilization increasing from approximately 81 percent today to approximately 96 percent in 2036. Aviation fuel is the primary exception to the overall declining demand trend, with demand projected to increase over time. As a result, the proposed regulations exempt aviation fuel storage from the reduction requirement to help accommodate those projected needs. Based on the available information, the City does not expect the proposed reduction in in-service fuel storage capacity to constrain projected fuel supply or materially affect the overall cost or timeline of business 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 a mandatory storage capacity reduction would not be compatible with the operation of its facility, which relies on a single large liquefied natural gas (LNG) storage tank. In response, the proposed regulations exempt regulated public utilities from the storage capacity reduction requirements.
• Existing Bulk Fuel Terminal operators may incur compliance costs associated with reducing in-service fuel storage capacity, taking fuel storage tanks out of service, and modifying future investment plans. Additional operational costs are also possible if reduced storage capacity requires more frequent fuel replenishment or other 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 requiring a 20 percent reduction in in-service fuel storage capacity could reduce fuel supply, 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 Title 33 Amendments Recommended Draft and the Title 17 Bulk Fuel Terminal Capacity Reduction Regulations report. 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 Title 33 regulations include a limited allowance for aviation fuel storage capacity expansions to address projected increases in aviation fuel demand and the Title 17 regulations exempt aviation fuel storage from the reduction requirement. The Parametrix model shows that even after implementation of the proposed 20 percent reduction in in-service fuel storage capacity, the CEI Hub is expected to retain sufficient storage to meet projected Oregon fuel demand through to 2050. Based on the available information, the City does not expect the proposed reduction in in-service fuel storage capacity to constrain projected fuel supply or materially affect business competitiveness, affordability, costs of goods, or household income through fuel price increases.
• The independent review by ECONW concluded that the Parametrix analysis provides a necessary starting point for evaluating future storage needs while also identifying uncertainties that prevent definitive conclusions about potential fuel price impacts. Specifically, the review found that storage capacity alone is unlikely to determine future fuel prices. Instead, price impacts would more likely depend on operational and market factors, such as the costs associated with increasing throughput and potential risk premiums associated with reduced operational flexibility, for which sufficient data were not available. As a result, the available analyses do not indicate that the proposed storage capacity reductions would necessarily result in higher fuel prices, although they also cannot rule out that possibility if operational constraints prove to be more limiting than assumed. 
• 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 useslocated 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 the reliability of critical fuel infrastructure. To mitigate potential operational impacts, the capacity reduction requirement includes several exemptions and allowances.

1. The reduction requirement does not apply to in-service storage tanks that exclusively store aviation fuel as of January 1, 2027. This exemption was included in response to testimony regarding projected growth in aviation fuel demand.
2. The reduction requirement does not apply to regulated public utilities or to tanks used exclusively as surge or breakout tanks associated with interstate pipelines that are regulated by the Federal Pipeline and Hazardous Materials Safety Administration.
3. Any additional storage capacity approved through a Title 33 Fuel Storage Tank Capacity Transfer Review or Aviation Fuel Storage Expansion Review is exempt from the reduction requirement.
4. 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.
5. 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 to the program are warranted.

• While the proposed regulations reduce in-service fuel storage capacity, they do not regulate fuel throughput or fuel volumes. Bulk fuel terminals therefore retain flexibility to manage fuel inventories and throughput in response to changing operational needs and market conditions.