Those opposed to the build-up of fossil fuel infrastructure in the Finger Lakes, including hundreds of people arrested for trespass while protesting Crestwood Midstream Partners’ plans to build a methane storage facility, are celebrating the Houston-based energy company’s May 9 announcement that it is not moving forward.
Yet, reports of the project’s death may be premature.
Officially called the Gallery 2 Expansion Project, the facility would repurpose an existing liquefied petroleum gas storage facility located in salt caverns beneath Seneca Lake in Reading, New York to a methane (natural gas) storage facility and expand its capacity. The gas would travel to the storage facility via pipelines. Opponents contend the proposed project poses unacceptable risks of contamination to Seneca Lake, the source of drinking water for 100,000 people.
Less than a month after the Federal Energy Regulatory Commission (FERC) approved the project on September 30, 2014, the organization, We are Seneca Lake, kicked off a civil disobedience campaign. For almost three years, there have been regular demonstrations outside Crestwood’s compressor station and property. From time-to-time, protesters, including teachers, religious leaders, families, and business owners, have joined hands to create a human blockade preventing vehicles from entering and existing driveways leading to Crestwood’s facilities.
“The driveway upon which we were arrested became a theatre of ordinary people literally standing against trucks that were servicing a fossil fuel project that we felt was dangerous to drinking water, possibly explosive, and putting a lake at risk, and also absent all accidents, brings more climate killing product to market,” said Sandra Steingraber, distinguished scholar in residence at Ithaca College. She is also a biologist and author active in We are Seneca Lake’s campaign.
Over the course of the protests, there have been 657 arrests at the gates of Crestwood for trespass and disorderly conduct, according to We are Seneca Lake’s website. The Town of Reading court dismissed many of the cases in the interests of justice. However, several people, including Steingraber (who pled guilty to trespass in 2014) served jail time.
“It’s very hard to know” what role the protests played, said Deborah Goldberg, managing attorney of Earthjustice’s Northeast Regional Office. She represents Gas Free Seneca, an environmental organization playing a leading role in organizing wineries, bed and breakfasts, and other businesses that make up the area’s $4.8 billion tourism and wine economy.
“The protests and the economics are intertwined, “Goldberg said, noting that the widespread opposition to the project since it was first proposed could affect whether companies want to use the facility.
Opponents learned of the company plans to discontinue the project in a bi-weekly environmental compliance report from Arlington Storage, a subsidiary of Crestwood. Company officials did not respond to calls and emails requesting comment on its decision.
“Despite its best efforts, Arlington has not been successful in securing long-term contractual commitments that would support completion of the Gallery 2 Expansion Project,” and the investment required to complete the project, the report says.
One reason why the project is not moving forward may have to do with the price of natural gas. When Inergy (now Crestwood) first filed its application in February 2013, with FERC, the federal agency responsible for siting natural gas facilities, the price of natural gas for export was $3.84 per thousand cubic feet, down from $12.16 per thousand cubic feet price in 2008, according to the U.S. Energy Information Administration. By February 2017 (the most recent data available), the price had dropped to $3.23 per thousand cubic feet, making the project a less attractive economic investment.
In May 2014, FERC issued a certificate “of public convenience and necessity” for the project. Required by the Natural Gas Act of 1938, the certificate is essentially an economic test and determination by the FERC that there is a need for the project, that it will serve the public interest, and that the applicant is able to support the project financially without relying on subsidies from its existing customers.
The project is not in the public interest, said Goldberg. “We would like them to rescind the certificate of public convenience and necessity,” she said.
This is unlikely to happen, unless Crestwood decides to do this on its own. Under the Natural Gas Act, “only the certificate holder may seek to have that authority vacated by submitting a formal request to the Commission,” said Tamara Young-Allen with FERC’s Division of Media Relations in an email.
Arlington has until May 15, 2018, to complete and place its project into service, Young-Allen said.
A recent blurb in Marcellus Drilling News provides an industry perspective on Crestwood’s announcement. It says, “A small-but-dedicated group of nutjob antis are heralding this as some sort of “tremendous victory.” It is nothing of the sort. The main part of the project has always been about storing propane, not natural gas…”
Crestwood still wants to move forward with its plans to store 1.5 million barrels propane in salt caverns on the same property. Trucks and rail cars would transport the fuel to the storage facility. Because FERC does not have authority under the Interstate Commerce Act to site petroleum products facilities, the federal agency is not involved in the propane storage proposal, according to Young-Allen. Instead, the developer is awaiting approval from the New York State Department of Environmental Conservation (DEC).
“An Administrative Law Judge in DEC’s Office of Hearings and Mediation Services is currently reviewing the submissions from the parties to the issues conference and will issue a ruling on whether any issues require an adjudication (trial like hearing) and party status once that review is complete,” said Kevin O. Frazier, DEC Public Information Officer, in an email.
Held in February 2015 in Horseheads, the issues conference gave opponents and supporters opportunities to present their concerns. Project supporters criticize the DEC for the length of time the agency is taking to review the record.
However, Goldberg, the attorney representing Gas Free Seneca, thinks it is important that the administrative law judge take his time.
“We want Crestwood to recognize they are not wanted” at Seneca Lake, she said.