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Can Wine and Natural Gas Coexist?

Finger Lakes winemakers ask governor's help in denying permits for a proposed gas storage facility

by Linda Jones McKee
Crestwood Midstream Partners acquired US Salt LLC (above) in 2012 and wants to use abandoned salt caverns to store natural gas and liquid petroleum gas.
Albany, N.Y.—Winemakers and business owners from the Finger Lakes region have requested that Gov. Andrew Cuomo block the permits for proposed natural gas and liquid petroleum gas (LPG) storage facilities near Lake Seneca. The Houston, Texas-based energy company, Crestwood Midstream Partners, which acquired US Salt LLC in Reading, N.Y., two miles north of Watkins Glen in 2012, wants to utilize abandoned salt caverns to store the gas. The company has submitted permit applications with the New York Department of Environmental Conservation (DEC), and that department is completing an environmental review of the project.

The winery owners are concerned that the proposed storage facility would bring heavy industry and increased truck traffic and pollution to the area, create threats to local drinking water and, most of all, to local jobs and businesses that depend on tourism generated by the region’s thriving wine industry. Currently there are 86 wineries located in the four counties bordering Seneca Lake. The wine and grape industry in New York has an economic impact on the state’s economy that totals $4.8 billion.

Lou Damiani, owner of Damiani Wine Cellars in Burdett, N.Y., on the east side of Lake Seneca, commented that there is no justification for jeopardizing the Finger Lakes’ place as an international destination for agri-tourism. He believes there is no propane shortage, and so there is no need for the proposed gas-storage facilities.

Doug Hazlitt, owner of Hazlitt 1852 Vineyards in Hector, N.Y., on the east side of Lake Seneca, summed up the purpose of the gathering in Albany: “We thank Gov. Cuomo for helping to promote Finger Lakes wine and tourism that has helped us to achieve success. It is time for Gov. Cuomo to answer us: What is his vision for the heart of New York? We believe it is the same as ours: to see it as a world-class tourist destination.…The risk of an accident should these projects get approved is not an acceptable risk. It threatens my family’s livelihood and the jobs that we create. Even if there were a one in a million chance of an accident, the risk would be way too high. It would only take one accident to turn visitors away from our region, causing what could be an unrecoverable blow to the sustainable jobs in the Finger Lakes.”

“Gov. Cuomo has done an excellent job helping us to create a vibrant agri-tourism industry in the heart of New York. Now he needs to help us protect it. Will he jeopardize what we have all built, all for the promise of eight to 10 gas industry jobs? We cannot simply pull up our vines and move elsewhere. It has taken generations to produce the quality of wines coming out of the Finger Lakes region. We have turned into the Napa Valley of the East.”

Gas Free Seneca, a coalition of opponents to the proposed gas storage project, have retained Earthjustice, an environmental legal group with a background in defending fracking bans by local governments. An Earthjustice attorney, Deborah Goldberg, noted during the press conference that there are two storage facilities being proposed. One is for natural gas, which is regulated by the Federal Energy Regulatory Commission, but nevertheless requires an underground storage permit from the DEC; the second is for a LPG facility that is wholly within the state jurisdiction, and would also require an underground storage permit. Goldberg stated, “The LPG facility is in the hands of Gov. Cuomo. He can say no; there are certainly good grounds to say no, and he will have the final word.”

Salt: the Finger Lakes’ other natural asset
The salt reserves in New York were created by the evaporation of a large sea 300 million years ago and extend across New York state to Lake Erie, north to Ontario and south into Pennsylvania. The first salt production for commercial purposes in New York started near Syracuse on the shore of Onondaga Lake during the War of 1812, when it was difficult to get salt from abroad. Salt refining became Syracuse’s largest industry and supplied much of the country’s need for salt during the 19th century. The industry caused environmental damage to Onondaga Lake and stopped production in Syracuse in the 1920s.

While salt was first discovered underground in Watkins Glen in 1882, it took several years for brine-producing wells to be established in that area. The Glen Salt Co. first drilled wells in 1893 on the Watkins Glen property that is now owned by Crestwood Midstream and found salt at a depth of 1,841 feet. Water from Seneca Lake was utilized to dissolve the salt deposits; the brine water was then pumped up from a well and allowed to evaporate, leaving the salt as crystals.

Over the years, vast salt caverns were created about 2,000 feet below the ground surface. The website of the Seneca Lake Pure Waters Association estimates the size of the underground salt cavern storage facility near of Watkins Glen to be approximately 2.0 billion cubic feet. According to the SLPWA, “The caverns currently are filled with salt brine. The LPG would displace the salt brine, which would be stored in a 14-acre lined surface pond above Seneca Lake. As LPG is withdrawn, the stored brine from the pond would be used to displace the LPG in the cavern. Inergy (a company that merged with Crestwood Midstream in 2013) has also announced plans for a transfer station to transport propane and butane by truck from the site and butane by rail.” The Watkins Glen storage facility is also connected to pipelines that can deliver gas to cities such as Binghamton, N.Y.

Problems associated with salt cavern gas storage
Using salt caverns to store materials other than salt brine has not been without negative incidents. While none of the salt caverns storing natural gas or LPG near Seneca Lake have experienced a catastrophic event, problems have occurred. Fo r example, one of the caverns at Watkins Glen experienced a rock layer collapse from the roof of the cavern in the 1960s. The debris weighed approximately 400,000 tons, and the event raised questions about the integrity of salt caverns as a containment vessel for natural gas.

Another problem occurred March 12, 1994, when a minor earthquake caused the collapse of the Retsof Salt Mine outside Geneseo, N.Y. The mine, which had recently been closed, filled with water from a nearby creek and local springs after a 500-foot by 500-foot section of shale roof rock 1,200 feet below the surface collapsed into an area known as Room 2-Yard South. As a result, groundwater levels dropped, wells went dry and potable groundwater degraded. Land subsidence damaged roads and bridges, and methane and hydrogen sulfide gases were released from underground into the atmosphere near the site.

One of the worst disasters occurred near Hutchinson, Kan., on Jan. 17, 2001. Natural gas migrated from the salt caverns where it was stored, through rock faults and created a series of explosions. Two businesses in Hutchinson were burned down by one explosion. Another “gas geyser” ignited in a trailer park, killing two people.

Other viewpoints
One member of the Reading Town Planning Board told Wines & Vines that Crestwood Midstream plans to fill the salt caverns using railcars and pipelines, while the storage facilities will be emptied by railcars, pipelines and trucks. He is concerned about the transportation infrastructure and its ability to transport gas safely. “The rail line is relatively decent,” he stated, “but the company owning the rail line is separate from the applicant (for the storage permits), and the condition of the rail line is not a part of the process.”

Increased truck traffic on Route 14, which runs along the west side of Seneca Lake, is also a potential problem, especially in light of recent reports about the increasing number of accidents involving trucks.

The Planning Board member also questioned the ability of Governor Cuomo to make the decision about the salt cavern storage permits and whether New York’s DEC can override local laws that ban oil- and gas-production activities. In a case decided June 24, the Supreme Court of the State of New York, Appellate Division, Third Judicial Department, ruled that “The discrete issue before us—and the only one we resolve today—is whether the state Legislature eliminated the home rule capacity of municipalities to pass zoning laws that exclude oil, gas and hydrofracking activities in order to preserve the existing character of their communities. There is no dispute that the state Legislature has this right if it chooses to exercise it. But in light of ECL (Environmental Conservation Law) 23-0303 (2)’s plain language, its place within the OGSML’s (Oil, Gas and Solution Mining Law) framework and the legislative background, we cannot say that the supersession clause—added long before the current debate over high-volume hydrofracking and horizontal drilling ignited—evinces a clear expression of preemptive intent. The zoning laws of Dryden and Middlefield are therefore valid.”

If this decision is upheld, the DEC may not have the final say on the use of the salt caverns in Reading for gas storage. According to the Planning Board member, the salt caverns lie within the Seneca Lake Protection District within the town of Reading, and the Reading land use laws clearly state that gas cannot be stored.

According to one local winemaker, who asked to remain anonymous, gas has been stored in salt caverns for more than 50 years. “As long as we want to have gas for cars and gas to heat houses, we have to store it somewhere,” the winemaker noted, “but don’t do it until you can do it safely. If it’s not in my backyard, it has to be in someone else’s backyard.” 

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