DEC Kills Crestwood’s Plan to Store LPG Next to Seneca Lake — Ending 8-Year Fight

ALBANY, July 12, 2018 — The state’s top environmental regulator on Thursday halted a controversial gas storage project proposed for caverns next to Seneca Lake, ending a fierce eight-year battle between midwestern fossil fuel interests and local residents and businesses.BasilSeggosready

Basil Seggos, commissioner of the state Department of Environmental Conservation, announced that he has denied a subsidiary of Houston-based Crestwood Midstream Partners LP a permit to store liquified petroleum gas, or LPG, in abandoned caverns on the U.S. Salt property two miles north of Watkins Glen.

“The record is compelling that the permitting this proposed gas storage facility on the western side of Seneca Lake is inconsistent with the character of the local and regional Finger Lakes community,” Seggos said in his 29-page decision.PDFussalt

The ruling was somewhat surprising in light of stances by the DEC staff and an administrative law judge, which tended to favor issuing the permit. After weighing extensive evidence from hearings and legal briefs, the ALJ had concluded that project opponents had failed to raise any issues warranting adjudication.

Seggos disagreed, saying the record showed that several matters would have been ripe for adjudication — including questions about cavern integrity and impacts on community character — had he not summarily denied the permit. “Adjudication of the cavern integrity issue would not only be warranted, but demanded,” he said.

Seggos’ decision, which came less than two months after Crestwood acknowledged possible cavern leaks and recommended further pressure testing, thrilled the local environmental group that spearheaded the opposition.

“This is truly a great day for our region,” said Yvonne Taylor, vice president of Gas Free Seneca, a group formed in 2011 to combat the project. “Don’t ever let anyone tell you that David can’t beat Goliath.”

Will Ouweleen, secretary of the Finger Lakes Wine Business Coalition, credited Seggos and Gov. Andrew Cuomo for siding with the Finger Lakes and its growing wine and tourism economy.  “We are not the gas and garbage dump for America. We are and will continue to be one of the most exciting wine regions of the world. Excelsior!”

Crestwood did not immediately respond to an email seeking comment.

The ruling comes more than eight years after an initial permit application was filed by Crestwood’s predecessor, Inergy LP, in the early days of the regional fracking boom. 

Even after Cuomo banned high-volume fracking in New York State in December 2014, Crestwood continued to pursue the LPG storage permits in the face of mounting opposition. Over the eight-year permitting effort, hundreds of protesters were arrested for trespassing at the company’s gates in Reading, and some went to jail.

A divided Schuyler County Legislature, led by Chairman Dennis Fagan, was a long-time staunch supporter of the project, even as other towns and counties in the area passed resolutions of opposition. 

But earlier this week, the Schuyler Legislature reversed course, unanimously rescinding its resolution of support less than three days before the Seggos announcement.

Cuomo had been facing political pressure to kill the LPG storage plan.GovCuomopdfNixonREADY

His challenger for the Democratic nomination for governor this year, Cynthia Nixon, had publicly criticized him for waffling on the high-profile industrial project that she promised to cancel. If the Cuomo Administration’s indecision on the LPG permit was a serious knock against the governor among Finger Lakes progressives, Seggos’ decision brushed away that political problem.

The initial permit application sought approval to store 2.1 million barrels of liquid propane and butane in abandoned caverns that had been formed decades earlier by solution salt mining. 

The original plan called for a rail and truck loading facility in Reading and a massive brine pond at the intersection of Routes 14 and 14a on a hill above the lake. 

The company trimmed the plan back in 2016, eliminating the rail-truck facility, butane storage and the giant brine pond, at least in part to mollify critics of the project.BernsteinREADY

But the company’s May 17, 2018 letter from attorney Kevin Bernstein to the DEC acknowledging possible new cavern leaks may have sealed the project’s fate. It tended to reinforce opponents’ arguments that the caverns were not reliable places to store explosive hydrocarbons (as reported in May on WaterFront).

The nonprofit environmental group Earthjustice represented Gas Free Seneca in legal proceedings related to the LPG permit. 

“We’re proud to have worked alongside the brave and spirited coalition and hope their success inspires and emboldens communities throughout the country that are fighting fossil fuel infrastructure projects,” said Earthjustice attorney Deborah Goldberg.

Earlier, Goldberg had played a key role in the legal battle to establish that New York communities have the right under local zoning law to reject fracking wells and other fossil fuel projects.

Gas Free Seneca and the Business Wine Coalition claim as members more than 450 Seneca Lake property owners, and 500 area businesses.

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