Wine and gas tend not to mix.
In upstate New York, a midstream oil and gas company is running into stiff local opposition for its plans to build natural gas infrastructure. Crestwood, a Texas-based company, has proposed plans to build natural gas storage facilities on Seneca Lake, a picturesque site in the heart of New York’s wine country.
Crestwood already owns several natural gas storage facilities in New York, storing natural gas and natural gas liquids produced from the Marcellus Shale.
Crestwood has proposed an additional site near the town of Watkin’s Glen on Seneca Lake. It would consist of millions of gallons of liquid petroleum gas (LPG), such as butane and propane, stored in old salt caverns. The company, through its subsidiary Arlington Gas Storage, also wants to expand existing natural gas storage from 1.5 to 2.0 billion cubic feet (bcf). It could potentially expand the site to handle up to 10 bcf. Crestwood’s plan is to turn Seneca Lake into a natural gas storage and transportation hub servicing the northeast.
But the company is encountering strong opposition from local communities who have resorted to civil disobedience to stop construction. About 92 people have thus far been arrested for blockading Crestwood’s facility. Among them is Phil Davis, a co-owner of Damiani Wine Cellars, a vineyard on Seneca Lake. “The statement's got to be made. It's intolerable what they're proposing. It takes a lot to make me boil over, but I'm boiling over now,” Lou Damiani, the other co-owner told Wine Spectator. Several of Damiani’s employees have also been arrested.
The Finger Lakes region is home to a growing wine industry. Tourists flock to the region’s 34 vineyards, which have built a global reputation for their Rieslings.
Damiani says Crestwood is going to ruin a region that has made major strides in developing a highly respected wine industry. “It's renewable; it's sustainable; you can pass it on to future generations. We feel you cannot do both things—you cannot industrialize the area and then still have a viable wine-tourist industry.”
But local grievances go beyond the negative effects on nearby vineyards. Several community groups have been assailing the plan because it involves the storage of methane and LPG in close proximity, raising safety fears.
Indeed there have been several significant explosions involving salt cavern storage in different parts of the country before. Alarmingly, the facility that Crestwood is proposing to use has had geological problems in the past, including a collapsed roof in the salt cavern.
Moreover, local groups, such as We Are Seneca Lake, are concerned about the contamination of Seneca Lake, which provides drinking water for around 100,000 people.
Upstate New York has become increasingly industrialized as the U.S. oil and gas industry has surged. New York is now home to a parade of trains carrying crude oil from the Bakken traveling through the state, on the north side of the Finger Lakes. Dozens of oil trains pass through the state on a weekly basis, creating a virtual crude oil pipeline that runs from North Dakota to Albany.
Separately, in early December the Federal Energy Regulatory Commission (FERC) approved the construction of the Constitution Pipeline, which will take shale gas from Pennsylvania through New York. The pipeline builder is running into trouble with local landowners who are refusing to turn over their land for the project, and the company has threatened to use eminent domain.
As the shale industry has expanded, the situation has become a political hot potato for Democratic Governor Andrew Cuomo. Gov. Cuomo has been unwilling to decide on whether or not to allow hydraulic fracturing in the state, having avoided a decision for several years. He is rumored to be running for President and will face pressure from the left as he enters a Democratic primary.
However, so far he has shown a willingness to allow Crestwood to move forward with salt cavern gas storage. His Department of Environmental Conservation even deleted references in a key USGS report on the risks of gas storage, a move likely intended to assist Crestwood’s proposal.
But that has only enraged towns near Seneca Lake. Feeling as if state and federal regulators have let them down – FERC approved Crestwood’s storage facility in September – citizen groups are increasingly turning to protest. The number of people who have been arrested continues to climb.
The Wall Street Journal reports that the backlash against a series of high profile pipelines across North America has spread beyond the infamous Keystone XL. At least six oil and gas pipelines totaling more than $15 billion have been delayed due to environmental opposition. As a result, costs are rising and some could ultimately be scrapped.
Nowhere is that more apparent than in the towns near Seneca Lake where opposition to Crestwood’s gas storage plan seems to be building momentum by the day.
By Nick Cunningham of Oilprice.com
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