Multnomah County Commissioners Take First Step in Requiring Fossil Fuel Industry to Post Risk Bonds

For more information, contact John Talberth: 510-384-5724 or jtalberth@sustainable-economy.org

NuStar biofuel tank explosion in Crockett, CA, October 15, 2019. There are 31 similar NuStar tanks in Portland’s “critical energy infrastructure hub.” Credit: ABCNews7

(Portland, OR) On Thursday, October 31, Multnomah County Commissioners unanimously passed a resolution calling for the fossil fuel industry to take full financial responsibility for accidents, spills, and dismantling of fossil fuel infrastructure – costs now largely borne by taxpayers. County Commissioner Dr. Sharon Meieran introduced a resolution which begins the process of assessing the economic and financial risks now posed by existing fossil fuel infrastructure in Portland’s Critical Energy Infrastructure (CEI) hub so that an ordinance can be adopted in a year or less forcing infrastructure owners to post bonds or other forms of financial assurance to fully internalize those risks. Once implemented, this process could begin the nation’s first ever managed decline away from hazardous infrastructure that poses particular risks to low income communities and communities of color, and Multnomah County could be the first local jurisdiction in the country to adopt a “polluter pays” principle for dealing with its fossil fuel infrastructure. The resolution also declared the County’s opposition to all new fossil fuel infrastructure.

 “This is a potentially game-changing effort that, if done right, can be adopted readily by other governments around the world,” said Dr. John Talberth, CSE’s President and Senior Economist.

Up to 380 million gallons of fossil fuels and chemicals–including 90 percent of the state’s transportation fuel and 100 percent of the jet fuel used throughout the state of Oregon– are stored in the CEI hub in large, aging tanks on infill soil prone to liquefaction in a quake. Most of this infrastructure was built before the seismic hazards were known: The Portland region is situated on the Cascadia Subduction Zone and is overdue for a major quake that could register over 9.0 on the Richter Scale. A 4.5 quake may have triggered the collapse of two NuStar ethanol storage tanks in Crockett, CA.

The Multnomah County resolution calls for “fossil fuel risk bond requirements, which would fill a gap in other financial assurance mechanisms, [and] could respond to financial risks stemming from fossil fuel infrastructure faced by Multnomah County and other local government jurisdictions.” This resolution is based on a policy remedy proposed by the Portland non-profit, Center for Sustainable Economy, fossil fuel risk bonding. The City of Portland has voiced their intent to join the County in supporting the fossil fuel risk bonding efforts.

The County and the City are conducting a study to assess the economic and financial costs associated with existing infrastructure and to determine whether owners are adequately insured against costs that are now routinely passed on to the public. If not, the County intends to require the industries to post a bond or other financial assurance mechanisms equivalent to a worst-case disaster scenario as a condition of continued operation, putting the risk back where it belongs: on the balance sheets of the polluters.

In addition to CSE’s Dr. Talberth, those who testified in support of the measure included representatives of Portland Harbor Community Coalition, Sunrise PDX, Columbia Riverkeeper, Friends of the Columbia Gorge, and Raging Grannies. The resolution and full testimony can be found here, starting at 21:43: http://multnomah.granicus.com/MediaPlayer.php?view_id=3&clip_id=1934

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