Underground gas storage faces local opposition

May 19, 2011

In 2008 a Kansas City-based energy company entered the salt business in upstate New York.

For a company that primarily deals in the storage and transport of various types of fuel, it may have seemed like an odd move: Why bother with producing 300,000 tons of salt every year?

But for Inergy, the real prize in U.S. Salt's Schuyler County mines wasn't the salt.

Building a "hub"

What Inergy was really interested in at U.S. Salt was the underground storage space offered by its depleted salt caverns. The company had already bought up a similar facility in nearby Bath, which stored liquefied petroleum gas (LPG, or liquid propane) in underground caverns. Expanding along the southwestern shore of Seneca Lake fit into a bigger strategy.

As Inergy CEO John Sherman said at the time of the U.S. Salt acquisition, the move, along with an earlier purchase of a facility in Owego, was "yet another example of the successful execution on our plan to build an integrated natural gas storage and transportation hub in the Northeast."

But now - as the company is seeking regulatory approval to store two million barrels of liquid propane in a pair of salt caverns just north of Watkins Glen - a group of Finger Lakes business owners is voicing its opposition.

"Wine not brine"

"Any economic benefit that is offered by this pales in comparison to what the economic benefit off of tourism and wineries [will be]," says Lou Damiani.

The co-owner of Damiani Wine Cellars is currently circulating petitions against the project. He says industrialization will hurt the area's bustling tourism and wine industries. He also says it poses environmental risks, and could ultimately encourage natural gas exploration in New York state.

"It sounds innocuous enough, but what [Inergy] really wants to do is make this the heart of Northeast gas distribution," Damiani says. "They also want to make it the heart of hydrofracking."

Damiani and a group known as Gas Free Seneca hosted two information sessions earlier this week. At Tuesday night's meeting, Damiani says roughly 125 people showed up to voice their concerns.

One of Gas Free Seneca's main objections is the creation of a new 14-acre brine pond. The pond would store the saltwater that's pumped out of the underground caverns as the liquid propane is pumped in.

The pond is also the source of the group's slogan: "Wine not brine."

Nothing new

Inergy says those concerns are overblown.

Debbie Hagen, a company spokesperson, tells the Innovation Trail via email that "many local residents have not realized that underground storage of LPG and natural gas has occurred on this property for decades and is currently occurring."

According to Hagen, liquid propane was stored in salt caverns on U.S. Salt's property from 1964 through 1984. Hagen says there's currently an LPG facility "across the street" from U.S. Salt's property.

"The community does not realize this because such storage has been done in a safe and unobtrusive manner," says Hagen. "Given this fact, the proposed facilities will not have a negative impact on tourism."

Regulatory hurdles

The New York State Department of Environmental Conservation (DEC) has to sign off on Inergy's environmental impact statement before plans move forward. But late last month, the agency notified the company that their first draft was "inadequate for public review."

A DEC spokesperson says the agency is waiting for more information from Inergy.

Here's a letter DEC sent to Inergy that outlines what the agency still needs to see: 

2011.04.28 Final dSEIS Review