Appalachian Basin

Experts Back Inergy’s Proposed Finger Lakes LPG Storage Facility

This fall will mark the four year anniversary since the New York Department of Environmental Conservation exercised its right to take over as lead agency for the proposed Inergy Finger Lakes LPG Storage Facility. Frustratingly, and despite approval from various experts, including the New York state geologist, a decision still has not been made.

We have been following the Inergy Finger Lakes LPG Storage Facility for awhile now, from the public hearings that took place almost two years ago to EarthJustice’s recent decision to step in and stop the project. In an effort to halt all natural gas development in New York, activists have targeted this project proposed by Schuyler County’s top taxpayer and employer – which will store clean-burning propane – despite expert approval, cooperation of the company, and a long history of propane storage in the region.

Here’s a bit of irony: residents in nearby Tioga County, N.Y., recently celebrated a 15 percent reduction of their taxes thanks to an Inergy storage facility operated by Central New York Oil And Gas Company. Meanwhile, counties neighboring Schuyler County (including Ontario, Seneca and Yates Counties) have ceremoniously passed resolutions against propane storage around Seneca Lake, all based on unsubstantiated concerns.  Are these counties more informed about the geology and other environmental matters than state regulators, including the state’s geologist who said this about the project two months ago (emphasis added)?

Dear Mr. Briggs,
In response to your request of January 18, 2013 for a final determination regarding the application of Finger Lakes LPG Storage, LLC for an underground storage permit for the Salt Point Storage Field in Schuyler County, we reviewed the Permit Application and all supplemental responses to the Department of Environmental Conservation‘s Notices of Incomplete Application submitted by Finger Lakes LPG Storage. At the time of this application there does not appear to be any geological reason to deny their request to utilize the geologic formations specified for the storage of liquefied petroleum gas. Their demonstration of both cap rock and cavern integrity is complete, and with a properly developed monitoring program, Finger Lakes’ proposed use of the Salt Point caverns is geologically sound. Further, in our review of the application materials, it has been demonstrated that the caverns in this salt formation have a longstanding operational record as a gas storage facility without any geologic evidence of incompatibility for this intended purpose.

Based on my reviews of the application materials and subsequent filings, I hereby grant approval of the project based on my findings that the project will have no adverse impact on the existing geologic environment. Please provide me with a copy of the Underground Storage Permit when issued.

Andrew Kozlowski
Acting Associate State Geologist

Or perhaps they’re more informed on the science and engineering of the project than nationally-renowned Professor Donald Siegel of Syracuse University, who also has explained why the project would be a safe addition to the region. See for yourself below (emphasis added):

Dear Commissioner Martens,

I am a hydrogeologist and professor at Syracuse University’s Department of Environmental Sciences. I am writing in regard to the proposed Finger Lakes LPG storage facility in Reading, NY.

I gather that state Senator Michael Nozzolio, members of the Seneca County government, and citizens opposing to the proposed LPG storage project have encouraged the Department to help find an alternative location for the proposed storage facility.

I have testified on behalf of the DEC and worked with Staff on various environmental projects over the last 30 years since I came to Syracuse University and I trust that Department and Staff understand the unrealistic nature of this suggestion. Nonetheless, as someone who practices and educates students on science, I want to voice my endorsement of the project’s environmental safety based on my review of the DSEIS and supporting documents.

Geologically, the proposed site actually has unique geologic attributes to protect the environment. I can think of no better geological environment in New York State to store liquid gas than salt caverns filled with brine. Indeed, if “proof is in the pudding”, brine-filled salt caves near Seneca Lake already have been used to store liquid gas for decades and have had no problems. Why?

There is no plausible change for collapse of the caverns because water and LPG fill the cave completely and liquids can’t compress (why hydraulic brakes work). And, I understand from the DEIS that the water and propane will be continuously under modest pressure to further counterbalance the weight of rock above the caves as additional protection against a collapse. And salt naturally quickly seals cracks that develop in it for whatever reason.

The engineering design of the brine pits is more than sound, including multiple lines of both protection and monitoring against leaks and spills. Indeed, the design approaches that required by a municipal waste landfill! Moreover, the brine pits at existing LPG facilities in salt in the Southern Tier have less engineered controls than this proposed one. They do not leak—after decades of use. Leaks can’t be catastrophic as some are saying, and even if they were (for reasons I can’t imagine), Seneca Lake would not be affected, given its enormous volume, quick replenishment time and mixing characteristics.

I teach students in all my classes to ask of every environmental concern: “Compared to what problem of similar kind?” In the case of potential brine spills, the amount of salt stored (not released) in a brine pit is similar to the amount of salt released every year into Seneca Lake watershed by people from their water
softeners and road deicing. Rainfall and mixing easily dilutes this large amount of salt to harmless levels.

There are many environmental problems people should be concerned about, but I see no plausible scientific or engineering reason why this proposed LPGstorage facility should be one of them.

Donald Siegel
Laura J. and L. Douglas
Meredith Professor

Trains transport LPG at nearby Bath Storage facility.

Trains transport LPG at nearby Bath Storage facility.

The fact is, these counties clearly do not know more than the individuals who have made it their career to study and teach on the subject and whose views are grounded in science.  Sadly, it really boils down to fears induced by misinformation, which is being fed to people by others with an agenda. Frankly, this is all too common in New York and other areas where gas development is not occurring, or where much-needed infrastructure such as the Finger Lakes storage project has not been added in recent years.

In reality, this type of project is nothing new to the Finger Lakes region.  The salt deposits here are ideal for propane storage, and propane has in fact been transported and stored safely in the area for decades. Local officials have recognized the need for the project, which will create jobs, generate much-needed tax revenue and help make energy more affordable for hundreds of thousands of residents and businesses.

As Schuyler County legislator Phil Barnes, a former County Undersheriff, wrote in a letter to DEC in March:

“This $40 million capital investment will put New Yorkers to work. The project will create 50 skilled construction jobs, high quality permanent jobs and scores of additional jobs through local vendors and suppliers. In addition, the new tax revenue generated can be used to support our schools and critical government services.”

Local officials again last month acknowledged their need for the Finger Lakes project and the tax revenue it would generate.  Just read the press release issued by Schuyler County and the Town of Reading relating to the settlement of a property tax appeal involving one of Inergy’s other storage properties in Watkins Glen (emphasis added):

May 9, 2013

To: Local News Media
For Immediate Release
Additional Information Contact: Legislative Chairman, Dennis Fagan (607) 292-3687

Schuyler Governments / Inergy Midstream Settle Tax Certiorari Case

Schuyler County officials today announced an agreement with Inergy Midstream that resolves a property tax appeal and provides financial certainty for Schuyler County and its residents. Inergy had protested the assessed value of its Seneca Lake natural gas storage facility located in Watkins Glen.

According to Legislative Chair Dennis Fagan, the taxing jurisdictions have agreed to an incremental reduction over a three year period that will result in local property tax payments in excess of 1.7 million dollars per year by Inergy Midstream, money that will support critical government services and strengthen our local schools.    Fagan, in explaining the rationale for the settlement commented “The Real Property Tax system is predicated upon parity among all taxpayers. Our position from the onset was that we would vigorously defend any action that sought to unfairly shift the property tax burden. Through the course of our review of data associated with this action we are in agreement that a reduction is in order to maintain equity in assessments.” The local taxing authorities have agreed to an incremental reduction over a three year period to a final assessment of 22 million dollars. Inergy had originally sought a reduction from the current assessed value of $29 million to $15 million. The agreement stipulates no refund of prior payments and will result in a 3 million reduction in 2013 followed by subsequent reductions of 2 million over each of the next two years.

In commenting on the  settlement, Town of Reading Supervisor Marvin Switzer stated  “We are appreciative of Inergy’s recognition of the fiscal duress facing our local governments and their sensitivity to the adverse impact a significant reduction in assessed value would impose on our tax payers. Their willingness to spread the reduction over three years and relinquish their right to refunds will positively impact local budgets”.

Chairman Fagan also reflected on Inergy’s role from the employment perspective adding, “This action helps to ensure the retention of our local workforce and recognizes the significant contribution to the community by one of our largest employers and taxpayers”. Inergy is in fact the largest taxpayer in Schuyler County according to Real Property tax records.  “The revenue certainty from this settlement, and the potential future tax revenue expected from Inergy’s Finger Lakes LPG storage project, is invaluable at a time when our budgets are stretched,” said Chairman Fagan.

Inergy Midstream also reflected positively on the settlement in stating “Inergy strives to be a responsible business owner in the communities in which our employees live and we operate,” said Ron Happach, Senior Vice President of Inergy. “We share the same vision for Schuyler County as our communities and neighbors – quality schools, a strong economy and a pristine environment.”

After four years, we can only hope the DEC will listen to the experts (including its own) to permit a project that creates a win-win for everyone. And hopefully we won’t have to wait another four months, let alone four years, to see it happen.


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