FERC Approves Methane Storage Project in Finger Lakes Region of New York
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 Sept. 30 decision by the Federal Energy Regulatory Commission (FERC) 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 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.
In July 2013, state Sen. George Maziarz, R-Newfane, the chairman of the Senate Energy and Telecommunications Committee, wrote DEC Commissioner Joseph Martens to urge him to promptly approve Crestwood’s LPG proposal.
This past June, Dennis Fagan, the Republican chairman of the Schuyler County Legislature, drafted a resolution supporting the LPG project. Skipping the customary committee process, he pushed for a vote and won 5-3. That vote incensed many in Watkins Glen, the county seat. The town council later voted for a resolution opposing the project.
Fagan’s promotional role prompted more than 400 people to mass in protest at the subsequent legislative hearing. Several local residents called for him to withdraw the resolution and recuse himself from discussion of the matter due to potential conflicts of interest. He declined both requests.
The company he had founded, Fagan Engineers, has done extensive work with companies involved in oil and gas production and pipelines. Fagan recently sold his firm to his brother and other partners, but he said he continues to receive payments from them as part of the sales agreement. Fagan Engineers is currently building a facility 15 miles south of Watkins Glen for Access Midstream, a joint venture partner with Crestwood in a Wyoming project valued at well over $100 million.
Fagan has long touted Crestwood’s planned storage hub. In an October 2011 letter of support to the DEC, he predicted that the LPG project would expand Schuyler County’s tax base by $20-30 million. Two years later, he announced that the property Crestwood plans to use for its methane gas storage would have its assessed value reduced from $29 million to $22 million by 2015, despite plans for extensive development.
Inergy, Crestwood’s predecessor company, negotiated the assessment cut with Schuyler County’s Town of Reading, where the Crestwood property is located. Inergy and Crestwood merged in 2013.
State Supreme Court records show that Congressman Tom Reed, R-Corning, had a hand in the court case that led to the company’s slashed assessment. Reed had served as Reading’s attorney for several years before being elected to Congress in 2010, and he was not officially replaced as the town’s lawyer until January 2012, according to Rita Osborne, Reading’s deputy clerk. Reed’s replacement, Thomas Bowes, had worked in Reed’s Corning law office for four years before leaving in December 2011.
In 2012—after Reed had officially been replaced by Bowes—Inergy petitioned in the State Supreme Court for the assessment cut. However, a State Supreme Court filing dated July 12, 2012 lists “Thomas Reed II, Esq.”—not Bowes—as “attorney for the respondents,” which included the town, its assessor and its board of assessment review.
In an interview with DCBureau.org last August, Reed acknowledged his past role as Reading’s attorney, but denied any role in the Inergy/Crestwood assessment case. Reed said his name may have been placed on the court document by mistake. Fagan, the county chairman, said in a more recent interview that he was not aware of any role Reed had in cutting the tax assessment for the methane storage property.
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 an interview Oct. 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.”
FERC attached several conditions to the methane storage expansion permit. One requires the company to provide fresh data on the current dimensions of the cavern and the volume of the huge rubble pile on its floor. But Clark said the results will probably never reach the public or independent scientists qualified to evaluate them. That is due, he said, to the understanding between the company and its regulators that flaws in caverns used to store volatile hydrocarbons are not to be disclosed to the public.
That policy may increase risks of catastrophic events, he added. “Bayou Corne illustrates the folly of trying to keep this stuff secret,” Clark said in reference to the Louisiana salt dome collapse in 2012 that has created a giant sinkhole about 30 miles south of Baton Rouge. Hundreds of residents have been evacuated and the state’s top natural resources official was forced to resign.
“By keeping it secret, look what happened in Louisiana,” Clark said. “(Gov. Bobby) Jindal is trying to figure it out after the fact. The state has had to spend a fortune … and the sinkhole’s getting larger.”
Both methane gas storage and LPG storage in salt caverns have been prone to severe accidents. Major fires and explosions struck at salt caverns holding compressed natural gas in 2001, 2003 and 2004. Catastrophic accidents hit LPG storage caverns in 1980, 1984, 1985 and 1992, killing or seriously injuring people in three of those cases.
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 U.S. 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 percent, compared to 0.63 percent for depleted reservoirs and 2.5 percent 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 percent (compared to 40 percent worldwide), and the frequency is about 1.4 percent per year,” he said. “Most other regulated industry sub-segments with a persistent serious to extremely serious facility incident rate of more than 30 percent 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.
Here's an independent high-level quantitative risk analysis completed in August 2014:
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Disasters stemming from hazards like floods, wildfires, and disease often garner attention because of their extreme conditions and heavy societal impacts. Although the nature of the damage may vary, major disasters are alike in that socially vulnerable populations often experience the worst repercussions. For example, we saw this following Hurricanes Katrina and Harvey, each of which generated widespread physical damage and outsized impacts to low-income and minority survivors.
Mapping Social Vulnerability<p>Figure 1a is a typical map of social vulnerability across the United States at the census tract level based on the Social Vulnerability Index (SoVI) algorithm of <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/1540-6237.8402002" target="_blank"><em>Cutter et al.</em></a> . Spatial representation of the index depicts high social vulnerability regionally in the Southwest, upper Great Plains, eastern Oklahoma, southern Texas, and southern Appalachia, among other places. With such a map, users can focus attention on select places and identify population characteristics associated with elevated vulnerabilities.</p>
Fig. 1. (a) Social vulnerability across the United States at the census tract scale is mapped here following the Social Vulnerability Index (SoVI). Red and pink hues indicate high social vulnerability. (b) This bivariate map depicts social vulnerability (blue hues) and annualized per capita hazard losses (pink hues) for U.S. counties from 2010 to 2019.<p>Many current indexes in the United States and abroad are direct or conceptual offshoots of SoVI, which has been widely replicated [e.g., <a href="https://link.springer.com/article/10.1007/s13753-016-0090-9" target="_blank"><em>de Loyola Hummell et al.</em></a>, 2016]. The U.S. Centers for Disease Control and Prevention (CDC) <a href="https://www.atsdr.cdc.gov/placeandhealth/svi/index.html" target="_blank">has also developed</a> a commonly used social vulnerability index intended to help local officials identify communities that may need support before, during, and after disasters.</p><p>The first modeling and mapping efforts, starting around the mid-2000s, largely focused on describing spatial distributions of social vulnerability at varying geographic scales. Over time, research in this area came to emphasize spatial comparisons between social vulnerability and physical hazards [<a href="https://doi.org/10.1007/s11069-009-9376-1" target="_blank"><em>Wood et al.</em></a>, 2010], modeling population dynamics following disasters [<a href="https://link.springer.com/article/10.1007%2Fs11111-008-0072-y" target="_blank" rel="noopener noreferrer"><em>Myers et al.</em></a>, 2008], and quantifying the robustness of social vulnerability measures [<a href="https://doi.org/10.1007/s11069-012-0152-2" target="_blank" rel="noopener noreferrer"><em>Tate</em></a>, 2012].</p><p>More recent work is beginning to dissolve barriers between social vulnerability and environmental justice scholarship [<a href="https://doi.org/10.2105/AJPH.2018.304846" target="_blank" rel="noopener noreferrer"><em>Chakraborty et al.</em></a>, 2019], which has traditionally focused on root causes of exposure to pollution hazards. Another prominent new research direction involves deeper interrogation of social vulnerability drivers in specific hazard contexts and disaster phases (e.g., before, during, after). Such work has revealed that interactions among drivers are important, but existing case studies are ill suited to guiding development of new indicators [<a href="https://doi.org/10.1016/j.ijdrr.2015.09.013" target="_blank" rel="noopener noreferrer"><em>Rufat et al.</em></a>, 2015].</p><p>Advances in geostatistical analyses have enabled researchers to characterize interactions more accurately among social vulnerability and hazard outcomes. Figure 1b depicts social vulnerability and annualized per capita hazard losses for U.S. counties from 2010 to 2019, facilitating visualization of the spatial coincidence of pre‑event susceptibilities and hazard impacts. Places ranked high in both dimensions may be priority locations for management interventions. Further, such analysis provides invaluable comparisons between places as well as information summarizing state and regional conditions.</p><p>In Figure 2, we take the analysis of interactions a step further, dividing counties into two categories: those experiencing annual per capita losses above or below the national average from 2010 to 2019. The differences among individual race, ethnicity, and poverty variables between the two county groups are small. But expressing race together with poverty (poverty attenuated by race) produces quite different results: Counties with high hazard losses have higher percentages of both impoverished Black populations and impoverished white populations than counties with low hazard losses. These county differences are most pronounced for impoverished Black populations.</p>
Fig. 2. Differences in population percentages between counties experiencing annual per capita losses above or below the national average from 2010 to 2019 for individual and compound social vulnerability indicators (race and poverty).<p>Our current work focuses on social vulnerability to floods using geostatistical modeling and mapping. The research directions are twofold. The first is to develop hazard-specific indicators of social vulnerability to aid in mitigation planning [<a href="https://doi.org/10.1007/s11069-020-04470-2" target="_blank" rel="noopener noreferrer"><em>Tate et al.</em></a>, 2021]. Because natural hazards differ in their innate characteristics (e.g., rate of onset, spatial extent), causal processes (e.g., urbanization, meteorology), and programmatic responses by government, manifestations of social vulnerability vary across hazards.</p><p>The second is to assess the degree to which socially vulnerable populations benefit from the leading disaster recovery programs [<a href="https://doi.org/10.1080/17477891.2019.1675578" target="_blank" rel="noopener noreferrer"><em>Emrich et al.</em></a>, 2020], such as the Federal Emergency Management Agency's (FEMA) <a href="https://www.fema.gov/individual-disaster-assistance" target="_blank" rel="noopener noreferrer">Individual Assistance</a> program and the U.S. Department of Housing and Urban Development's Community Development Block Grant (CDBG) <a href="https://www.hudexchange.info/programs/cdbg-dr/" target="_blank" rel="noopener noreferrer">Disaster Recovery</a> program. Both research directions posit social vulnerability indicators as potential measures of social equity.</p>
Social Vulnerability as a Measure of Equity<p>Given their focus on social marginalization and economic barriers, social vulnerability indicators are attracting growing scientific interest as measures of inequity resulting from disasters. Indeed, social vulnerability and inequity are related concepts. Social vulnerability research explores the differential susceptibilities and capacities of disaster-affected populations, whereas social equity analyses tend to focus on population disparities in the allocation of resources for hazard mitigation and disaster recovery. Interventions with an equity focus emphasize full and equal resource access for all people with unmet disaster needs.</p><p>Yet newer studies of inequity in disaster programs have documented troubling disparities in income, race, and home ownership among those who <a href="https://eos.org/articles/equity-concerns-raised-in-federal-flood-property-buyouts" target="_blank">participate in flood buyout programs</a>, are <a href="https://www.eenews.net/stories/1063477407" target="_blank" rel="noopener noreferrer">eligible for postdisaster loans</a>, receive short-term recovery assistance [<a href="https://doi.org/10.1016/j.ijdrr.2020.102010" target="_blank" rel="noopener noreferrer"><em>Drakes et al.</em></a>, 2021], and have <a href="https://www.texastribune.org/2020/08/25/texas-natural-disasters--mental-health/" target="_blank" rel="noopener noreferrer">access to mental health services</a>. For example, a recent analysis of federal flood buyouts found racial privilege to be infused at multiple program stages and geographic scales, resulting in resources that disproportionately benefit whiter and more urban counties and neighborhoods [<a href="https://doi.org/10.1177/2378023120905439" target="_blank" rel="noopener noreferrer"><em>Elliott et al.</em></a>, 2020].</p><p>Investments in disaster risk reduction are largely prioritized on the basis of hazard modeling, historical impacts, and economic risk. Social equity, meanwhile, has been far less integrated into the considerations of public agencies for hazard and disaster management. But this situation may be beginning to shift. Following the adage of "what gets measured gets managed," social equity metrics are increasingly being inserted into disaster management.</p><p>At the national level, FEMA has <a href="https://www.fema.gov/news-release/20200220/fema-releases-affordability-framework-national-flood-insurance-program" target="_blank">developed options</a> to increase the affordability of flood insurance [Federal Emergency Management Agency, 2018]. At the subnational scale, Puerto Rico has integrated social vulnerability into its CDBG Mitigation Action Plan, expanding its considerations of risk beyond only economic factors. At the local level, Harris County, Texas, has begun using social vulnerability indicators alongside traditional measures of flood risk to introduce equity into the prioritization of flood mitigation projects [<a href="https://www.hcfcd.org/Portals/62/Resilience/Bond-Program/Prioritization-Framework/final_prioritization-framework-report_20190827.pdf?ver=2019-09-19-092535-743" target="_blank" rel="noopener noreferrer"><em>Harris County Flood Control District</em></a>, 2019].</p><p>Unfortunately, many existing measures of disaster equity fall short. They may be unidimensional, using single indicators such as income in places where underlying vulnerability processes suggest that a multidimensional measure like racialized poverty (Figure 2) would be more valid. And criteria presumed to be objective and neutral for determining resource allocation, such as economic loss and cost-benefit ratios, prioritize asset value over social equity. For example, following the <a href="http://www.cedar-rapids.org/discover_cedar_rapids/flood_of_2008/2008_flood_facts.php" target="_blank" rel="noopener noreferrer">2008 flooding</a> in Cedar Rapids, Iowa, cost-benefit criteria supported new flood protections for the city's central business district on the east side of the Cedar River but not for vulnerable populations and workforce housing on the west side.</p><p>Furthermore, many equity measures are aspatial or ahistorical, even though the roots of marginalization may lie in systemic and spatially explicit processes that originated long ago like redlining and urban renewal. More research is thus needed to understand which measures are most suitable for which social equity analyses.</p>
Challenges for Disaster Equity Analysis<p>Across studies that quantify, map, and analyze social vulnerability to natural hazards, modelers have faced recurrent measurement challenges, many of which also apply in measuring disaster equity (Table 1). The first is clearly establishing the purpose of an equity analysis by defining characteristics such as the end user and intended use, the type of hazard, and the disaster stage (i.e., mitigation, response, or recovery). Analyses using generalized indicators like the CDC Social Vulnerability Index may be appropriate for identifying broad areas of concern, whereas more detailed analyses are ideal for high-stakes decisions about budget allocations and project prioritization.</p>
By Jessica Corbett
Sen. Bernie Sanders on Tuesday was the lone progressive to vote against Tom Vilsack reprising his role as secretary of agriculture, citing concerns that progressive advocacy groups have been raising since even before President Joe Biden officially nominated the former Obama administration appointee.