There are a lot of problems with this video, and the main problem is this--the Portland Police Department is refusing to acknowledge that citizens have a right to protest.
As far as being a savvy piece of public relations, this is an attempt by this police department to justify the use of pepper spray on a protesting citizen. This is the press release for the video above. In it, the department claims that it was justified in using pepper spray on Elizabeth Evon Nichols because she would not disperse.
Her right to protest was violated because the order to disperse had nothing to do with maintaining public safety. The police, in their riot gear and in their numbers, were the ones creating the public safety issue. Had the police surrounded and contained the protesters and had they not pushed against or tried to disperse the protesters, there would be no reason to use pepper spray against Nichols.
So, the real question is--do these people have a right to assemble peacefully and protest? Absolutely. And if you accept that, then there is no justification for any police officer to use pepper spray against a protester. If these were Tea Party protesters, the police would let them walk around with their weapons and their signs and they wouldn't go near them. But these are people from the left side of the political spectrum, and that means that they must be crushed with the violent power of the police. See: American History 101.