Crestwood Propane Project Remains Stuck in Limbo

A proposed propane storage facility that could help stabilize supply in the Northeast remains on hold, as the New York State approval process drags on.

Crestwood is seeking to store up to 2.1 billion gallons of propane and butane in underground salt caverns in Reading, N.Y., but the review process that begin in 2009 drags on with no known end date.

The permit request now rests with the New York State Department of Environmental Conservation (DEC). A draft permit was issued last November, which stipulated the project go through what is called an issues conference, which occurred in February 2015. A DEC administrative law judge is currently reviewing the arguments made in that proceeding, and is expected to determine within a month or two whether any of the issues raised by project opponents will require an Adjudicatory Trial. If the judge finds that any of the issues raised by opponents at the issues conference are substantive and significant, there will an Adjudicatory Trial, in which sworn testimony is taken from experts on the issues.

“We are waiting for an administrative law judge to determine whether any technical aspects of our storage project require more review,” said Crestwood Vice President Brad Bacon. “The pending decision brings to conclusion the issues conference started earlier this year, where DEC staff made clear that they support the merits of the project and rejected or rebutted every single argument made by Gas Free Seneca and other project opponents. We’re hopeful the pending decision reflects the positions reached by the technical expertise of the DEC staff and the New York State Geologist, which approved the project almost three years ago.”

There is no timetable on the judicial review and trial, but that process will eventually conclude with a judge’s recommendation to the DEC Commissioner, who will then issue a decision on the final permit.

A Hot Topic

The project has been a hot-button issue in New York’s Schuyler County, where the facility would be located. During campaigning for local and county elections last year, many candidates took a stand for or against the Crestwood project. When the elections were held on November 3, the results were favorable for Crestwood, as several candidates who opposed the project were defeated. The Finger Lake Times reported that Incoming Reading Supervisor Gary Conklin won more than 70 percent of the vote over his anti-LPG storage opponent, William DeSarno. “Meanwhile, LPG proponent Stephen Miller won one of two available Town Board seats by a wide margin,” the newspaper reported.

“Voters in Schuyler County sent a clear message Nov. 3 by voting down local candidates who staked their campaigns on opposing our proposed [LPG] storage facility,” Crestwood said in a statement. “We’ve spent time talking with officials, residents and business owners in the area, and we know that the community appreciates our effort to create jobs and invest here,” Bacon said at the time. “Most folks understand that propane has been stored safely around here for decades and feel a favorable decision on this project is long overdue.”

The facility would use brine (salty water) injection and removal to control the inflow and outflow of gas from the sealed, pressurized cavern. As propane is injected, brine is forced out and stored in adjacent brine ponds or sent to the plant for salt production. To remove propane, the facility operator re-injects brine to force the propane out. Propane is lighter than brine, so the brine inside the cavern resides as a separate layer below.

Crestwood has made adjustments to its proposal to address concerns from the community that one of the brine ponds could leak or overflow. The company reconfigured the brine pond designs to reduce the aggregate brine pond size and use two smaller brine ponds rather than one larger one. The revised plan relocates the larger of the two brine ponds farther away from Seneca Lake and locates the smaller brine pond where the original brine pond was located. The company also voluntarily obtained a quantitative risk assessment for the project by a national expert, Quest Consultants, as recommended by project critics.

Once the state grants a permit, it is expected that Crestwood could get the facility up and running in nine to 12 months. Propane would arrive primarily by pipeline and would be shipped out by pipeline to the Selkirk terminal near Albany.

Industry insiders say that the Crestwood facility could benefit LPG marketers and customers by stabilizing price and supply in a region that now lacks adequate propane storage capacity.

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