Project Report:
Fossil Fuel Risk Bonds, No Tar Sands by Rail
- Investigates the causes of economic imbalances.
- Investigates causes tending to destroy or impair the free-market system.
- Explores and develops market-based solutions.


CSE's Fossil Fuel Risk Bond program addresses the hidden subsidies we all pay in the form of externalized costs of fossil fuel extraction, transport, storage and combustion. In line with the internationally recognized “polluter pays" principal, our work on fossil fuel risk bonds is an effort to get these costs borne by the polluter. In addition, we are engaged in an attempt to halt the transport of tar sands by rail in two ports in the Portland, Oregon area.


Project update: Fossil Fuel Risk Bonds

In 2020 and with generous support from the Alex C. Walker Foundation, CSE scored major national, regional and local victories on our fossil fuel risk bond work. Key successes include:

Portland, OR

On October 31st, 2019, Multnomah County unanimously passed a resolution initiating the Phase I risk assessment component of our fossil fuel risk bond program. In addition, the County declared opposition to new fossil fuel infrastructure and committed, along with the City of Portland, $100,000 for a risk assessment of fossil fuel infrastructure at the Critical Energy Infrastructure Hub in northwest Portland. We expect a final risk assessment in early to mid-2021. During the intervening period, the County and stakeholders will develop fossil fuel regulations that will likely be adopted in 2021. CSE is currently engaged with the risk assessment process to ensure that it is robust and adequate to form the basis for regulatory requirements put in place in 2021 and 2022.

King County, WA

As a result of this successful work in Multnomah County, and in collaboration with the nonprofit, 350 Seattle, CSE succeeded in securing unanimous support from the King County Commission for a resolution on July 20th, 2020, that called for the County to update its 2020 comprehensive plan to evaluate how best to proceed with a full fossil fuel risk bond assessment, including the climate change impacts. King County's resolution in support of a more expansive form of fossil fuel risk bonds is closer to what we had proposed for Multnomah County and Portland (namely, a review of both the point source risks and the climate risks of fossil fuel infrastructure). King County also added some strong new language around updating this policy as costs change and new information becomes available, and looked at a 50-year time horizon, which is not included in the Portland language. As with Multnomah County, CSE is currently engaged with monitoring the risk assessment phase to ensure it is robust and

Eugene, OR

CSE is now working with the 35O Eugene and the Eugene Sustainability Commission around a possible fossil fuel risk bond for the City of Eugene and possibly for Lane County. We are scheduled to present to the City in April of 2021. We are also exploring a possible collaboration with activists at 350 Deschutes in Bend, OR who have expressed interest in implementing the policy in their jurisdiction.

Washington State

In the aftermath of an in-depth article by Sightline Institute (WA) reviewing our seminal work in Portland and King County, Washington State Representative Mia Gregorson announced that she intends to introduce legislation calling for statewide implementation of fossil fuel risk bonds in the next session. She has been joined by other members of the state legislature in drafting the legislation and CSE and its partner Sightline Institute are working with her office to fine-tune the legislation to expedite its ease of implementation.


Natural Resources Defense Council and a small non-profit, Elected Officials to Protect America (EOPA), are also intrigued by the potential of fossil fuel risk bonds. EOPA briefed their California members on the policy using the attached document prepared by CSE on our "2.0 version" of fossil fuel risk bonds in May 2020. On August 28, 2020, we briefed the Bay Area Climate Emergency Mobilization Task Force on the potential for putting in place fossil fuel risk bonds. On the briefing, several elected officials and activists expressed interest in following Washington state’s lead on putting in place fossil fuel risk bonds in California.


Public Citizen's office in Texas has applied for funding to work on fossil fuel risk bonds with us in Houston. Should we partner with them, this would prove to be both the most challenging and the most exciting place to begin to implement this concept: In the heart of the oil and gas industry.

Presidential campaigns

At the federal level, two former presidential candidates, Senators Elizabeth Warren and Bernie Sanders, pledged to federalize fossil fuel risk bonds if elected president (see mention of fossil fuel risk bonds on Bernie's Green New Deal page here.) This puts us in an excellent position, with their help, to brief the Biden-Harris administration in 2021.

Federal legislation

The following federally elected officials have expressed an interest in federalizing our fossil fuel risk bond concept: Sen. Merkley, Sanders, and Warren; and Congressman James Raskin (D-MD). Congressman Raskin requested and has now forwarded a legislative concept note from CSE that is now being reviewed by legislative counsel. We expect a draft bill by early January 2021.

In addition, CSE has been successful in recruiting national and regional partners to assist us with a full-fledged campaign. At the national level, Natural Resources Defense Council (NRDC) has partnered with us. NRDC’s role will be to help draft and promote federal, state, and local legislation and help us navigate legal issues that may arise during program implementation such as the looming tidal wave of fossil fuel industry bankruptcies and challenges based on the Interstate Commerce Clause. Friends of the Earth is discussing how best to partner with us. FoE is especially interested in the public bank dimensions of this work (public banks could be the third-party holders of financial assurance trust funds). At the regional level we have a growing list that includes 350 Seattle and Eugene, Portland Audubon, 350 PDX, Oregon Physicians for Social Responsibility, Portland Climate Action Coalition, and Sightline Institute.

Finally, we have also received extensive media exposure on our Pacific Northwest work. Sightline Institute published an excellent, in-depth piece following our successes in Portland and King County. Following the Multnomah County victory, the Portland Mercury published a piece here, with an emphasis on the potential costs to taxpayers should the Critical Energy Infrastructure Hub be destroyed by a major earthquake. Daphne Wysham and John Talberth appeared on public radio and presented during a recorded one-hour segment on Locus Focus which airs on radio stations throughout the Pacific Northwest. Locus Focus aired a separate interview, at our suggestion, with Jay Wilson, one of our strongest allies inside the Oregon state government, who works on disaster preparedness and has warned that the tank farms in Portland are a ticking time bomb that could cause the largest oil spill in the world.

Project update: No Tar Sands by Rail

Since spring of 2019, CSE and our allies have been fighting Zenith Energy’s plans to bring crude oil by rail to a terminal in Portland, OR, in flagrant disregard for the City’s groundbreaking 2016 ordinance calling for an end to all new fossil fuel infrastructure. Zenith managed to get this crude-oil-by-rail terminal up and running by taking advantage of a prior permit that had been granted by the City in 2014 to the previous owner, Arc Logistics, to ship bitumen, also known as “tar sands,” much of it sourced from Alberta, Canada. (Zenith claims on its website it no longer stores bitumen on its Portland premises, but it does store dilbit crude, which is bitumen blended with mixtures of flammable and noxious chemicals to make it less viscous, for export to West Coast refineries.)

Since purchasing the terminal, the number of crude oil by rail trains arriving in Portland rose to 9,167 rail cars in 2019, three times the 2,836 rail cars that came in 2018, according to statistics from the Oregon Department of Transportation. As the price of tar sands has plummeted, activists have observed that Zenith has switched to importing highly explosive Bakken crude – the same oil that was carried by train and exploded in a rail accident in the Lac-Megantic, Quebec disaster in 2013 which killed 47 people.

On Monday, May 11, 2020, Zenith withdrew its application for a key chemical pipeline permit and emphasized a commitment to “renewable fuels” moving forward. Within the broader context –of the oil economy in free fall, a barrel of tar sands selling for less than a Barrel of Monkeys, Zenith’s credit rating downgraded to B-, and Zenith’s parent company, Warburg Pincus, announcing their plans to sell Zenith — this permit withdrawal signals that the grassroots-driven and City-executed strategy of putting any and all available pressure on Zenith’s crude oil-by-rail operations is proving successful in forcing the company to pursue alternative strategies.

However, it is common practice for oil companies to request a permit for “renewable” fuels, and once that permit is authorized, to flip the terminal back to transporting crude oil. So we remain vigilant about this “renewable fuel” permit, regardless, and intend to keep the pressure on Portland’s lone crude oil terminal until it is closed for good. CSE and its partners are currently monitoring Zenith’s activities at the terminal and have documented apparent violations to its operating permits and a potential Clean Water Act violation. While CSE will continue to participate in these efforts work on our Fossil Fuel Risk Bond program is now taking precedence since, if successful, it will no doubt provide the financial disincentive for Zenith to continue operating. This will free up a significant portion of the Critical Energy Infrastructure Hub for clean up and restoration to make it available for beneficial uses in the future.


The fossil fuel industry is exacting a growing cost on the lives of all people, and the planet overall. The costs of climate change alone is as Lord Richard Stern noted in his "Stern Review of Climate Change" in 2006, the "greatest and widest-ranging market failure ever seen, presenting a unique challenge for economics." This market failure means that the market for oil, gas and coal is distorted in favor of these polluting energy resources over carbon-free and low carbon energy solutions. One way of preventing this market distortion from continuing is to put a price on carbon at the national level. Our project is exploring an alternative approach - fossil fuel risk bond programs. These programs would empower state and local governments to enact a range of financial assurance mechanisms to ensure that fossil fuel corporations, and not taxpayers, bear the full costs catastrophic accidents, leaks, spills, and climate change.


We are partnering with a variety of local nonprofits in advancing fossil fuel risk bonds, including Portland Audubon, Oregon Physicians for Social Responsibility, 350PDX and a local environmental justice group, Portland,OR Harbor Community Coalition (PHCC). In order to ensure that our work is grounded in the concerns of frontline communities, we are working with PHCC in developing:
1) a shared set of short-term priorities to ensure that the Portland Harbor community is safeguarded;
2) a shared narrative around a Superfund site in the Portland harbor, its cleanup and how to avoid yet another toxic spill that experts say could cause the largest oil spill in world history;
3) a shared vision around how to transform a low-income community, populated largely by immigrants and people of color, from a highly contaminated region to a healthy, economically vibrant one; and
4) a plan for operationalizing fossil fuel risk bonds (FFRB) to begin a just transition away from existing fossil fuel infrastructure and toward a cleaner Harbor Community, a safer city and a fossil fuel-free Oregon.
We are also now reaching out to other jurisdictions and exploring FFRB partnerships with national groups including Public Citizen, with offices in TX and DC.

Information Dissemination

The greatest test that we have yet to pass is to make this work comprehensible and supported by frontline communities. The challenge in this work is to make an obscure concept like “fossil fuel risk bonds” comprehensible to the average person. In partnership with PHCC, we are sharing an intern this summer who will help us develop a website with the story of the CEI hub, the injustices that led us to this point, and what we propose to do to solve them. Among the methods of communication we plan to employ: A billboard or bus advertising campaign that says, "Coming soon to Portland: the largest oil spill in world history" with QR codes that lead to a website with all of the information and calls to action we want to share, including the environmental justice history and superfund history in the vicinity of the CEI hub.

Until and unless we get the fossil fuel infrastructure cleaned up in the vicinity of the CEI hub, our demands will focus on:
• An industrial fire brigade for the CEI hub
• Transparency around risk insurance for CEI hub industries
• Greater public right to know about air and water hazards in the area
• Greater transparency around seismic safety issues of existing infrastructure
• Fossil fuel risk bonds
• A just transition
• A transformation of the CEI hub to a public park, community garden, etc.

Through all of these efforts, we will work to ensure that the risk bonds program becomes commonly understood as one means by which to pay for the imminent dangers of existing fossil fuel infrastructure and/or the dismantling of existing fossil fuel infrastructure, while ensuring no further fossil fuel infrastructure is built.

Once the prototype of a media and social media campaign has been developed for Portland, developing the tools and graphic images for people living near fossil fuel infrastructure elsewhere in the Cascadia subduction zone in Pacific Northwest cities will be relatively straightforward. As in Portland, we will work to reveal graphically just how large the risk is to public health and safety should a 9.0 earthquake hit their region. CSE will begin discussion with other communities on how best to pay for the dismantlement of existing fossil fuel infrastructure, making their cities safer, while meeting climate emergency targets and the need to halve GHG emissions by 2030 as part of a state-level Green New Deal in Oregon and Washington.

In addition to Portland partnerships, CSE is making progress in moving the FFRB concept along in Eugene, OR, where we will be giving a presentation to elected officials; in Tacoma, WA, where grassroots activists have requested our support in getting a risk bonds off the ground; in Whatcom County and in Burnaby, BC, Canada. Whatcom County has passed a similar moratorium on new fossil fuel infrastructure, which includes reference to a risk assessment.

CSE developed a white paper describing the steps we took in the Portland area to put the FFRB program in place, which we are sharing with fellow activists.

Our second step will be to work with partners in developing strong visuals as part of a social media campaign that reveals just how much risk people are exposed to as a result of fossil fuel infrastructure in their communities. We will disseminate critical information through a social media campaign targeting communities at greatest risk from existing fossil fuel infrastructure.

Our third step will be to share what we have learned in webinars and then, where there is interest from specific communities, share our toolbox, including our white paper, and our social media package, to allow them to work with us on a potential coordinated campaign on this work in their region. The Walker Foundation's investment in this initiative will help us develop the media, social media and outreach tools and then use them to solidify a set of partnerships that we view as most promising in the Cascadia earthquake subduction zones, as well other regions around the country where fossil fuel infrastructure is a serious concern to local community members and elected officials.

Project Link

Fossil fuel storage tanks in Portland's Critical Energy Infrastructure Hub. Should catastrophe hit as a result of an earthquake or industrial accident, a fossil fuel risk bond program would ensure that the owners pay the costs not taxpayers. Image courtesy of the Portland Mercury.


1016 Madison Street
Port Townsend, WA 98368

(510) 384-5724
(703) 667-0208
(360) 344-2080


Dr. John Talberth
President and Senior Economist, Center for Sustainable Economy

Posted 3/27/2020 5:58 PM
Updated   5/16/2021 5:45 PM

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