On Monday evening, the state Department of Environmental Conservation released draft permit conditions for a proposed underground liquid petroleum gas (LPG) facility adjacent to the western shore of Seneca Lake. The lake is a major tourist destination in the Finger Lakes region. It also serves as a source of drinking water for an estimated 100,000 area residents.

The DEC stressed that, “the release of these draft permit conditions in no way indicates that the project will ultimately be approved.” Nonetheless, the state review process for the project has reached a major milestone.

The facility would be situated within a 576-acre site in the town of Reading, Schuyler County. The site is about 2.5 miles north of the village of Watkins Glen. The state DEC noted that, “associated surface facilities would extend uphill to the west with compressors, brine ponds, and distribution operations along Route 14… and Route 14A.”

According to FingerLakes.com, “Seneca Lake, once part of the proud Seneca Nation, is among the most popular of the Finger Lakes due to the natural and scenic beauty of the lake as well as its many attractions…

The hills that surround Seneca Lake are dotted with vineyards that cover hundreds of well-tended, picturesque acres, and its beautiful waters draw sports enthusiasts from all over… Small towns and villages line the shores of Seneca Lake, including beautiful Geneva and the popular Watkins Glen.”

Gas in Underground “Caverns”

Proposed Finger Lakes LPG Storage Facility. View a larger version of this graphic here.

The storage facility would utilize existing underground caverns in the Syracuse Salt Formation. These caverns were originally excavated by U.S. Salt and other mining companies.

Texas-based Crestwood Midstream already has a methane (natural gas) storage facility in two caverns within the formation. The existing facility connects with the Dominion and Millenium pipelines, which deliver gas from the Marcellus Shale formation in Pennsylvania and other drilling sites. Crestwood has received approval from the Federal Energy Regulatory Commission to expand methane storage within the caverns.

While the feds have jurisdiction over the methane gas storage portion of the project, the state DEC has final say over the storage of LPG, mostly propane and butane. Crestwood is also seeking permission to store about 88.2 million gallons of LPG in the caverns.

The Albany Times Union pointed out in a blog post Tuesday “that the caverns at Watkins Glen could provide key storage infrastructure should natural gas hydrofracking be allowed in the state.”

A spokesman for Crestwood, who asked not to be identified by name, said that he did not know how much space would exist between the methane storage and LPG storage areas within the salt formation.

According to Crestwood, the salt formation’s underground caverns are currently filled with salt brine. As propane is injected into the caverns, the brine is withdrawn and will be contained in lined holding ponds nearby.

The company says that “the caverns are impermeable, and have the structural strength of steel, meaning no fluid or gas can escape through the surrounding salt deposit.”

Moving Propane by Pipeline, Truck and Rail

The Crestwood facility would connect to the existing TEPPCO Liquid Petroleum Gas interstate pipeline. The facility would ship LPG by pipeline, by truck via Routes 14 and 14A, and by rail via the existing Norfolk & Southern Railroad.

As proposed, the project involves construction of a new rail and truck LPG transfer facility, which “would be capable of operation on a 24-hour basis, 365-days a year.”

Construction would also include “surface work consisting of truck and rail loading terminals, LPG storage tanks, offices and other distribution facilities, and storm water control structures.”

The proposed facility, which has been under review for five years, has become highly controversial in the Finger Lakes. The draft permit conditions were released by the DEC less than a week after Governor Cuomo’s re-election.

“Unacceptable” Risk

Organizations like Gas Free Seneca point to a risk analysis by Rob Mackenzie, MD, which found that, “under the proposal in question the likelihood of an LPG disaster of serious or extremely serious consequence within the county in the next twenty-five years is greater than 40 percent.”

Mackenzie’s analysis, which was apparently requested by the Schuyler County Legislature, pointed to the possibility of a truck or rail accident in which LPG was released into the surrounding environment.

The bigger risk, said Mackenzie, was a structural collapse or other problem within the caverns themselves. Between 1972 and 2012, “there have been 18 serious or extremely serious incidents in salt cavern storage facilities,” he said.

“Nine of the salt cavern incidents were accompanied by large fires and/or eight explosions. Six involved loss of life or serious injury. In eight cases evacuation of between 30 and 2000 residents was required,” reported MacKenzie. “The likelihood of a serious, very serious, or catastrophic incident [in the formations themselves] over twenty-five years is 35 percent,” he concluded. This was “unacceptable,” Mackenzie said.

Over twenty residents from surrounding counties were arrested for performing acts of civil disobedience related to the project on October 29th and November 3rd. Those arrested included a 90-year old woman who stated, “I am here because of water and the climate. They are being threatened, and they are connected.”

The Crestwood spokesman who responded to our questions said that propane had been safely stored in the Seneca Lake caverns for twenty years, from 1964 to 1984, without incident.

Solving a Distribution Problem

Proponents of the LPG facility, like the New York Propane Gas Association, say that Crestwood will be addressing a major liquid petroleum distribution problem for upstate New York and New England.

“New York simply does not have enough propane stored here to prevent price spikes and supply constraints,” Rick Cummings, incoming NYPGA president and president of Mulhern Gas in Hudson, told LP Gas in an interview.

“As a result, New York residents and businesses are paying 40 percent more for energy this winter,” Cummings stated. He argued that lack of storage capacity was making fuel prices higher than they would normally be.

“Households that rely on propane for heating will pay $377 more to stay safe and warm. That adds up to [an] $84 million cost burden on New Yorkers that could have been avoided if New York had more safe propane storage infrastructure like the Finger Lakes project.”

Local Wine Industry Raises Questions

Sunrise over a Finger Lakes vineyard. Photo credit: Visit Finger Lakes.

Concerns about possible pollution of soil and water, and industrialization of the area, have led to pushback from many local breweries and wineries.

“What’s being proposed here is massive,” Lou Damiani, owner of Damiani Cellars, told NYER. He said that there were other locations, besides next to Seneca Lake, which would be more appropriate for propane storage. “If they really want to do this, dig a cavern away from the lake…this is cheap storage.”

Damiani said that it had taken “decades” to turn the Finger Lakes into a “world class” tourist destination and wine region. He said that many local growers were “frustrated” that Governor Cuomo and the DEC did not fully appreciate the risks posed by increasing gas and petroleum infrastructure in the area.

“You can’t have it both ways,” said Damiani, referring to the state’s interest in supporting the oil and gas industry, along with tourism and local wine and food production.

Crestwood’s spokesman told us that the concerns of local wineries -that gas and petroleum storage would impact wine and tourism activities- were unfounded.

He pointed to the fact that the local wine and tourism industries grew and flourished while propane storage was already taking place in the immediate area. A propane storage facility has been located across the road from Crestwood’s proposed facility for some time, he stated.

According to the New York Wine and Grape Foundation, there are 133 wineries and tasting rooms in the Finger Lakes. The specialties of Seneca Lake growers include sparkling wines, Riesling, Pinot Noir, and Ice Wine.

The Finger Lakes Wine Alliance, a membership organization, declined our request for comment.

This summer, however, a reported 60 vineyard owners wrote to Governor Cuomo asking that DEC reject the gas storage plan. Among the vineyards signing the letter were Heron Hill. In an earlier letter to the DEC, Heron Hill owner John Ingle noted, “agriculture and tourism are the lifeblood of our economy…And now as we are finally reaping the rewards that come with international respect, we come face-to-face with a threat to our way of life and our livelihood.”

“Noise, truck traffic, pollution, and an industrial landscape are not why people choose the Finger Lakes as a vacation destination,” Ingle wrote.

State Decision Imminent

The Times Union reports that lawmakers in Seneca and Ontario counties, which border Seneca Lake, have voted against the project. Schuyler County lawmakers have voted in favor, while the remaining lakeshore county, Yates, has filed a letter of concern.

The next step in the review process is an “Issues Conference” to be held on Thursday, February 12, 2015, in Horseheads, New York. The state DEC says that the purpose of the conference is “to define the scope of issues, if any, that require adjudication with regard to the [gas storage] application.”

Participation at the issues conference is limited to DEC staff, Crestwood, and members of the public who request “party status.” All requests for party status must be received by the DEC’s Office of Hearings and Mediation Services by 5:00 p.m. on Wednesday, December 10.