NY Seneca Lake at Risk of Gas Storage Eruptions

FERC Approves NY Methane Storage Project at Seneca Lake

From a News Article by Peter Mantius, Natural Resources News Service, October 3, 2014

Brushing aside warnings of dangerous geological risk, federal regulators say construction can start immediately on a methane gas storage project next to Seneca Lake that has galvanized opposition from wine and tourism businesses across the Finger Lakes in upstate New York.

The  decision by the Federal Energy Regulatory Commission represents a major breakthrough for Houston-based Crestwood Midstream. The company has been waging a five-year campaign for permission to convert long-abandoned lakeside salt caverns into a regional storage hub for both methane gas and liquid petroleum gas, or LPG, from fracking operations in Pennsylvania.

FERC has jurisdiction over the methane gas storage portion of the project, while the state Department of Environmental Conservation has the final say over the storage of LPG, mostly propane and butane. The company has been trying to persuade both agencies that the old caverns are ideal storage sites for highly-pressurized, volatile hydrocarbons. Scientists who are not paid by the company disagree and have warned of the caverns’ unstable geology.

In May, after 14 months of review, FERC granted conditional approval of Crestwood’s request to expand its existing methane storage into a cavern that has a history of instability. Meanwhile, the NY-DEC has been evaluating the LPG portion of the project since 2009. It announced in August plans to hold an “issues conference” to further weigh the evidence before ruling.

Crestwood’s storage hub would be located in a cluster of several dozen salt caverns on the west shore of Seneca Lake less than three miles north of the village of Watkins Glen, population 1,859. The company continues to mine salt at the site, and it already uses a former salt cavern to store methane gas. FERC has allowed it to expand its working gas capacity from 1.45 billion cubic feet to 2.0 bcf.

Typically, methane gas is transported to the caverns by pipeline, while LPG storage would require truck and rail transport. If Crestwood wins DEC approval, it would store LPG in two other caverns less than a quarter mile away from the compressed methane.

The company has asserted that the history of the storage caverns, including details of their flaws, is a trade secret. And state and federal regulators have complied with the company’s requests to keep most cavern information out of the public eye. But reports dating back decades by engineers employed by the caverns’ owners — tracked down in Internet searches — candidly spell out their defects.

Opponents of Crestwood’s proposed storage hub have expressed alarm over FERC’s brisk dismissal of potential risks, but safety issues are not their only concern. They also fear increased air and noise pollution, a steep increase in LPG truck traffic through the village of Watkins Glen and new LPG rail traffic over a spindly 80-year-old trestle that spans the Watkins Glen gorge, one of the state’s Top 10 tourist destinations.

In March, two internationally renowned vintners who recently purchased 65 acres directly across Seneca Lake from Crestwood’s property wrote Gov. Andrew Cuomo to urge him to block the LPG portion of the plan.

“The potential for accidents, the threat to fresh water quality and the visual impact of a 60-foot flare stack with massive compressors is not compatible with developing the tremendous potential of the region,” wrote Paul Hobbs, owner of the Paul Hobbs Winery in Sonoma County, California, and Johannes Selbach of the Selbach-Oster estate in Germany’s Mosel Valley.

“For the past several years we have explored the vineyards and wineries of the Finger Lakes in search of an ideal parcel for growing world class Riesling,” Hobbs and Selbach wrote the governor. The site chosen on the east side of Seneca Lake just outside Watkins Glen, which features steep slopes, low-PH scale shale and slate soils and a cool growing season, “is unquestionably one of the premier places in the world for high quality winegrowing,” they added.

The Seneca Lake Wine Trail already has about three dozen member wineries. Michael Warren Thomas, who helped recruit Hobbs and Selbach to join them, recently met with a top aide to Cuomo to point out that their arrival could easily stimulate significant new investment in the Finger Lakes wine industry. Already, Thomas noted, Louis Barruol of Chateau St. Cosme and Master Sommelier Christopher Bates have floated the idea of building a visitor center near Watkins Glen in a bid to draw from around the world.

“These are not bulk wine producers,” Thomas said of Hobbs and Selbach. “They are people looking to make the best wine in the world in small quantities. We ought to pay attention when we have the best in the world deciding to make wine in our backyard.”

While Hobbs and Selbach arrived without invitation, hoopla, political backing or government incentives, Crestwood has been backed — both overtly and quietly — by a coalition of politicians

More than 400 people participated in a mass protest at a legislative hearing.

FERC’s decision to grant a green light for construction on the methane storage cavern preceded any public announcements of approval from the state. By law, the DEC must agree to modify Crestwood’s current underground storage permit for methane gas, and the state geologist must certify that the storage cavern is safe. However, as a practical matter, the state does not have the legal authority to block the methane storage project, if legal precedents involving federal-state jurisdiction are any gauge.

The best the public can hope for in the future is diligent monitoring of the methane storage facility for leaks and roof and wall collapses, said H.C. Clark, a Houston geologist who has sharply criticized FERC’s analysis of the cavern.

Clark pointed out in January that FERC had neglected to assess the safety implications of a massive roof collapse in the cavern. He learned about the event in a detailed report written in the late 1960s by Charles Jacoby, an engineer who worked for the cavern’s owner at the time.

During its analysis of the project, FERC had pointedly asked Crestwood if it knew of any cavern roof or wall collapses anywhere within its Seneca Lake cavern field. The company issued a qualified denial. If fact, a 400,000-ton chunk of rock — roughly the size of an aircraft carrier — had given way in the very cavern that the company proposed to use for methane storage.

After Clark disclosed the roof collapse to the public and DCBureau.org and other media outlets publicized it, FERC addressed the issue. It attributed the roof collapse to the fact that LPG and brine had been cycled in and out of the cavern at the time, eating away at its salt walls and weakening its structure. LPG has not been stored in the cavern since 1984, and it is now mostly filled with brine.

In its May 15 order conditionally approving the reopening of the cavern for methane storage, FERC concluded that after all brine has been removed and methane gas is added, “dissolution of the salt in the gallery will not occur.”

But Clark, who holds a Ph.D. in geophysics from Stanford and taught the subject for many years at Rice University, said in an interview October 1 that it would be “absurd” for FERC to imply that removing brine from the cavern removes all risk of further collapse. “This is an old — ancient by now — cavern sitting there with a broad, flat rock top, which is not what salt cavern folks want to hear,” he added. “The compressed natural gas will work its way up through any kind of abnormality.”

In August, Dr. Rob Mackenzie, a retired CEO of the Cayuga Medical Center, a hospital about 20 miles east of Watkins Glen, sought to quantify the safety risk of Crestwood’s methane gas storage operation to Schuyler County residents. An experienced risk analyst, Mackenzie prepared a formal quantitative risk analysis of the Crestwood methane gas proposal.

Mackenzie analyzed accident events — major fires, explosions, collapses, catastrophic loss of product, evacuations — at salt cavern storage facilities in the United States dating back to 1972. He concluded that the risk of an “extremely serious” salt cavern event within Schuyler County over the next 25 years is more than 35%.

Citing data from the Energy Information Administration, Mackenzie noted that in 2012 there were 414 underground gas storage facilities in the United States, including 40 in salt caverns. Aquifers and depleted oil and gas reservoirs are much more commonly used for hydrocarbon storage, and they have dramatically better safety records than salt caverns. “Worldwide, the percentage of incidents involving casualties at salt cavern facilities as a percentage of facilities in operation in 2005 was 13.6%, compared to 0.63% for depleted reservoirs and 2.5% for aquifers,” Mackenzie reported, citing a 2008 study by British health officials.

Between 1972 and 2012, there have been 18 “serious or extremely serious incidents” at U.S. salt cavern storage facilities, Mackenzie wrote, citing EIA data. “With the average number of (salt cavern) facilities in operation through most of the last two decades at close to 30, the U.S. incidence is about 60% (compared to 40% worldwide), and the frequency is about 1.4% per year,” he said. “Most other regulated industry sub-segments with a persistent serious to extremely serious facility incident rate of over 30% would be shut down or else voluntarily discontinued, except in wartime.”

Mackenzie also found that nine of the 18 salt cavern incidents involved large fires and/or explosions; six involved loss of life or serious injury; eight involved evacuations of between 30 and 2,000 residents; and 13 involved extremely serious property losses.

FERC, the regulatory agency, saw no need to further question the suitability of Crestwood’s salt cavern storage.

Tagged as: air pollution, butane, drilling, eruption risk, explosions, Finger Lakes, fires, fracking, gas storage, grapes, LPG, marcellus shale, natural gas, NY, propane, Seneca Lake, water pollution, wet gas, wineries