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Chairman to Chairman

Fagan's letter to his Yates counterpart about the LPG storage project,
before the Yates Legislature opposed the plan

October 9, 2014

Chairman Timothy Dennis
Yates County Legislature
417 Liberty Street
Penn Yan, NY 14527

RE: Proposed Yates County Resolution Opposing the LPG Project in the Town of Reading.

Dear Chairman Dennis:

At the recent Yates County committee meeting with Crestwood, one of your legislators questioned the disconnect between the home (Schuyler) County's support for the LPG storage project and the opposition of Schuyler County residents and businesses. The purpose of this letter is to explain the Schuyler County Legislature's support for the project and I ask that you share this with your entire board.

Our original position was to remain neutral and let the technical experts at NYSDEC approve or deny the permit based on the merits of this project. The Legislature was also concerned about jumping on the Gas Free Seneca (GFS) bandwagon since many of their initial concerns were false. The Legislature did their homework and visited the Crestwood Seneca Lake Natural Gas Storage Facility and their LPG storage and transfer operations in Savona, NY. In fact some legislators visited these facilities twice As a consulting environmental engineer with 41 years of experience, including 34 years in NYS, I have developed extensive contacts in DEC, both in Region 8 (Avon) and the central office in Albany. During the early part of 2014, my technical contacts at DEC told me that they had signed off on the technical approval of the project and that it was sitting on the DEC Commissioner's desk for months awaiting the green light from the Governor's office. At that point it became apparent that DEC's review of the project had changed from a technical review to a political one. This prompted our Legislature to pass a Resolution (Vote: 5-3) in favor of granting a permit for this project in accordance with the approval of DEC's technical staff.

At our committee meeting earlier this week, there was concern about chlorides from these storage caverns leaking into Seneca Lake. It is my understanding that these storage caverns do not leak brine into the lake. There have been salt caverns under pressure with brine that have been abandoned for decades with no loss of pressure. Past failures of salt caverns involved old casing failures, valve failures, packer failures, or salt creep. The Crestwood casings have newly cemented casings which will include future NYS mandated inspections. Each casing well head has redundant valves and Crestwood utilizes no packers for their wells.

DEC/FERC permits require detailed mechanical integrity testing (MIT) of all wells on a regular maintenance schedule to be observed by these agencies. Also, due to the depth of the Crestwood salt caverns (2,000 feet below lake), salt temperatures are low resulting in negligible salt creep. Based in part on the aforementioned considerations, the Acting Associate State Geologist of the NYS Geological Survey wrote a letter on March 15, 2013 to DEC as part of the SEQR record for this project which states in part, "At the time of this application, there does not appear to be any geological reason to deny their request to utilize geologic formations specified for the storage of liquefied petroleum gas. Their demonstration of both cap rock and cavern integrity is complete, and with a properly developed monitoring program, Finger Lakes' proposed use of the Salt Point caverns is geologically sound. Further, in our review of the application materials, it has been demonstrated that the caverns in this salt formation have a long standing operational record as a gas storage facility without any geologic evidence of incompatibility for this intended purpose."

As to the issue of the increased chloride content in Seneca Lake, I am sure that permitted discharges from the two salt plants in Watkins Glen in the 1960's and 1970's contributed to this condition. However, the likely major contribution to the increase in chlorides to Seneca Lake can likely be attributed to the Morton Salt operation in Himrod in the 1970's and its subsequent inadequate closure.

One of the early GFS charges was a tremendous increase in propane truck traffic both delivering propane to the facility and distributing it from the storage facility to end users, thereby adversely affecting the tourism industry. This assertion is patently false. During the tourist season, relatively few propane truck deliveries occur. Propane coming into the facility during the summer is via pipeline (the proposed project has no propane truck unloading facilities). Truck traffic during the propane delivery season should not increase without a corresponding increase in the regional demand. The new excess propane storage capacity will serve propane shortage areas which last year occurred in the eastern part of the State (Selkirk/Albany area). Propane is delivered from the proposed project to Selkirk by pipeline and not by propane trucks.

Much has been stated by the project's opponents about the adverse impact this project will have on tourism. As you are well aware, tourism is the cornerstone of each of our local economies and as such, the Legislature has devoted energy and resources to promoting and expanding this industry. The last thing we would ever do is take action that would in any way diminish the tremendous growth we are experiencing. That being said, LPG and/or natural gas has been stored and delivered out of Schuyler County since 1964. During this time period, the local wineries and tourism industry have experienced significant growth. I believe now we have over 30 wineries along Seneca Lake. The proposed LPG storage project will have minimal impact on the aesthetics, noise and viewsheds from Seneca Lake and State Route 14. The proposed brine ponds will employ state-of-the-art dual liners with leak detection facilities. Three feet of freeboard will contain the largest storms. If a leak occurs in the ponds, they can be emptied by a pipeline connection to US Salt, where the brine can be utilized in their salt production operations. Our research supports the fact that if the facility were fully operational today, there would be no noticeable impact to our residents and tourists alike.

Another concern voiced by GFS is Crestwood plans for Watkins Glen to become an industrial energy hub which would run counter to the tourism promotion efforts in the area. This industrialization is overstated as it relates to their Schuyler County facilities which only include the proposed LPG storage project and a recently approved expansion of their natural gas storage facility by the Federal Energy Regulatory Commission. Other Crestwood energy facilities in the region include the Savona LPG storage facility in Steuben County, the Stagecoach natural gas storage facility in Tioga County, and the Woodhall and Adrien Field natural gas storage facilities in Steuben County.

Opponents to this LPG storage project state that the primary beneficiary of this project is the Houston-based Crestwood Corporation. Although the permanent jobs growth is modest with 10 new employees, the construction jobs will total some 50 employees. The potential $25 million assessed value for the project will add to the tax base of Schuyler County. Even more important is the jobs retention aspect of this project; Crestwood is Schuyler County's largest taxpayer, employing 145 people. While it can be argued that the aforementioned growth is still not significant, our position is that since it doesn't come at the expense of other community benefits such as health and safety, economic, or environmental we see no reason not to support it.

I believe the Schuyler County Legislature has completed their due diligence in evaluating the impacts of this project. During our site visits, we were impressed with the safety track record of the Savona LPG and Watkins Glen natural gas storage facilities. Emergency procedures and equipment include redundant shut off valves that can be activated from multiple (including remote) locations involving storage, loading and unloading facilities. We find it incongruous that a major energy company such as Crestwood would undertake a $40 million project that had major safety concerns. It is also difficult to believe that the Federal Energy Regulatory Commission (FERC), which coordinated directly with the geological staff of the NYSDEC, would approve the expansion of Crestwood's natural gas storage facility if there were inherent risks associated with the spent bedded salt caverns of US Salt.

One of the reasons for the apparent disconnect between the Schuyler County Legislature's support for the project and the local opposition to the project can be answered in part by the well-funded and organized nature of the opposition. The opposition employs bullying and intimidation tactics. Some of their more radical supporters call for civil disobedience. I have had numerous constituents tell me of their support for the Legislature's position backing this project. However, they are reluctant to state their views in public as they are concerned about intimidation and retribution. An example of this "silent majority" can be seen in the recent Republican primary for County Legislative District 6 which encompasses the Village of Watkins Glen. The incumbent candidate, Legislator Phil Barnes, supports the LPG project, while his opponent supports the opposition to the project. Phil won the Republican primary by a 60% to 40% vote.

I have personally come under attack by the opposition as having a conflict of interest. Up until the end of 2012 when I retired, I was the owner of Fagan Engineers, a 20-person Environmental Engineering consulting firm who does, in part, consulting work for natural gas development projects in New York and Pennsylvania. Neither my firm, which I sold to my employees, nor I personally have ever worked for Crestwood or any of their subsidiaries. For over the past five years, I have publicly stated on numerous occasions my opposition to fracking the Marcellus Shale for natural gas development in Schuyler County and the Finger Lakes watershed. This opposition is based on technical concerns (the Marcellus Shale is too shallow to be feasibly fracked) and tourism related concerns that would be adversely impacted by the inevitable traffic congestion. Given the above considerations, I am still attacked as having a conflict of interest with threatening phone calls and verbal abuse.

I hope this detailed response helps to answer your Legislature's question as to why the majority of the Schuyler County Legislature passed their Resolution this past June in support of the LPG storage project proposed by Crestwood.

Regards,

Dennis A. Fagan
Chairman, Schuyler County Legislature

 

 

 

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