Perceptions of propane can stymie storage projects, but tips and tools exist to accentuate the positive

June 6, 2013 By    

Joe Rose was called to testify before a New York state agency in November 2011 about the need for Inergy’s proposed propane storage project near Watkins Glen, N.Y.

About 250 people gathered in a high school auditorium for the public hearing. But before Rose could even utter a word about how safe the Inergy project was, many in the audience gave him a greeting unlike any other he’s received throughout his 29 years in propane.

“I didn’t open my mouth other than to say who I was and that I supported the project, and they booed and hissed,” says Rose, president of the Propane Gas Association of New England. “I never saw anything like it in my life.”

David Gelinas, president of the Penobscot Bay & River Pilots Association in Penobscot, Maine, is familiar with the kind of resistance Rose describes. Gelinas isn’t a propane proponent like Rose, but as an advocate for his port, he was close to DCP Midstream’s recent proposal to build a 14-story propane storage tank in Searsport, Maine.

DCP withdrew its application to build the 22-million-gallon tank in Searsport in April because preliminary votes by a local planning board indicated the proposal would ultimately be rejected. But DCP faced a daunting challenge, Gelinas says, because an anti-port community was active in Searsport long before DCP stepped foot there.

“It’s not just propane; it’s industry in general,” Gelinas says. “We have some very local, progressive grassroots organizations that have in the past come together to oppose port expansion. DCP’s project raised all of their red flags to continue to fight the port.”

Inergy’s and DCP’s efforts underscore the continued need for additional propane storage in the Northeast, but as Rose and Gelinas describe, there are some extremely passionate opponents in the region who will go to any length to keep industrial development away.

Despite opponent claims, the need for increased propane storage in the Northeast is still great. According to Rose, some northeastern marketers don’t even keep a day’s worth of storage on hand, precipitating a disaster during winter months when supply is often disrupted along pipelines and rails.

To offset disruptions, Rose encourages northeastern marketers to build their own bulk storage plants that are capable of keeping businesses running for one week. It is, after all, easier to obtain permits to add storage at existing bulk facilities than at new sites.

Still, large-scale propane storage projects like Inergy’s ongoing proposal, which would add about 88 million gallons of underground propane storage to salt caverns in the Finger Lakes region, would eliminate long-haul supply issues for many northeastern retailers during challenging winter months.

Establishing more storage is a major challenge, though. Inergy and DCP are just two companies that have found completing such projects isn’t a matter of dotting a few i’s and crossing a few t’s, but rather a process of continuously working with government and local communities to ensure all concerns are addressed.

Challenges mount

Originally, Inergy anticipated the permitting and approvals for its Finger Lakes project to be completed at the local level. But company President Bill Gautreaux says New York’s Department of Environmental Conservation (DEC) filed for primacy, creating a fundamental shift that has caused a significant delay in the project going online.

“That shift took place in the first year or so,” Gautreaux says. “It’s not unusual for the DEC to be the lead agency for underground storage projects, but the approval process really cannot begin until these types of fundamental procedural issues are resolved.”

Subsequently, Gautreaux says Inergy got caught in the middle of the hydraulic-fracking controversy in New York.

“That really started to preoccupy the DEC and the state of New York,” he says. “That was followed by a gubernatorial election that put things on hold even further. A lot can happen over the years – the DEC isn’t immune from changing priorities, resource constraints and employee turnover, and certainly felt the impact of these types of things.”

In the meantime, anti-fracking groups targeted Inergy’s project as an environmental detriment. Gautreaux says Inergy has no plans to hydraulically fracture in the Finger Lakes. It’s a message Inergy has had to convey repeatedly.

“All the gas in New York is dry gas,” he says. “Any fracking that takes place in New York is not going to produce anything that will relate to our facility. Propane storage facilities were needed long before fracking made shale gas more economical, and facilities like our Finger Lakes project continue to be needed whether or not shale gas provides an increasing portion of our domestic gas supply.”

To date, Inergy has invested about $40 million in its Finger Lakes project and hundreds of thousands of dollars on environmental assessments to meet the DEC’s needs. For example, Gautreaux says Inergy designed the brine ponds to heighten solid waste landfill standards, and it went as far as doing a quantitative risk assessment – something that’s generally reserved for projects like nuclear power plants, he adds.

“We have worked very closely with the DEC,” Gautreaux says. “We have been to town meetings where professional activists came in and raised issues you would not expect to address, such as tsunamis.”

Rather than dismiss such claims as if they couldn’t do damage to its proposal, Gautreaux says Inergy has been open to feedback from all parties throughout the process and worked with those in opposition to address any concerns.

“We feel like we’ve gotten to the point that we’ve done everything we need to do,” he says. “We still firmly believe we’re very close – we’re closer than we’ve ever been – and it’s only a matter of time before we get our permit.”

Denied locally

In the end, even after DCP developers received the federal and state permits needed to build their tank, the local planning board unanimously voted to deny DCP’s Searsport application because site plan and land-use ordinances were not met, according to The Free Press of Rockland, Maine. But DCP had good support as it embarked on the project several years ago.

“It was going fine and they got every permit they needed,” Rose says. “They got the state permit; they got the Army Corps of Engineers permit; they really had everything they needed except this final approval from the planning board. I really don’t know what stems the tide at the planning board other than a lot of community pressure. But apparently when they found out that a piece of this project was going to be on commercially zoned land – not industrially zoned land – that was the out they needed to make it go away.”

Although the planning board voted against DCP, Gelinas believes DCP had the majority of the local community’s support.

“If you asked every voting citizen, I think they had the majority in favor of their project,” he says. “It became the board’s decision. I can understand the way the board voted the way it did, but I think it points out a flaw in our fundamental structure.”

The flaw Gelinas references is the amount of time that passed between the project’s start and its unfortunate finish.

“There ought to be a mechanism in place to tell a company whether a project is going to fit in a given zone quicker than three years [two years of hearings],” he says. “The state puts a lot of public investment in the port and the taxpayers funded that dock. But here we have the state making infrastructure investments and then a [local] board making decisions?

“I realize a lot of states are strong on local control, but at some point it seems there ought to be more of a plan and vision.”

Takeaways

Regardless, as a person with a vested interest in DCP establishing a facility in Searsport, Gelinas has advice for those planning to embark on bulk plant projects of similar magnitude.

“The most important thing for a new business is to come in early and sit down with the people who know what’s going down in the state,” he says. “Find out background information. Find out where your opposition is going to come from; what they’re going to say; and who’s going to say it. Have a plan moving forward. Know the concerns that are going to be raised and how you’re going to address them.

“In our case, [opponents] are anti-port activists. They want the port gone. You need to be able to address the people who are open-minded and reasonable.”

The Propane Education & Research Council (PERC) is also offering propane retailers a helping hand in dealing with their communities as it relates to bulk plants.

PERC’s “Propane in Your Community” materials, released in 2010, include a bulk plant brochure and companion PowerPoint program that highlights the industry’s safety record. In fact, PERC’s materials are constructed in a way that retailers can customize them with their own company logo.

“The DCP piece is bringing to light a barrier of growth to the industry that could be some type of misunderstanding communities have,” says Stuart Flatow, PERC’s vice president of safety and training. “What is said on TV freaks them out. When you’re hearing testimony from neighbors saying things like ‘blast zones,’ they have a right to be concerned. They live in the community, and they have family in the community.”

The industry’s job, Flatow adds, is to be honest and frank with the public so they don’t have to feel unsafe having a propane plant in the community.

“This [PERC outreach] is for anyone looking to put a plant in a community,” Flatow says.

Although Flatow currently serves PERC, he is a former director of safety for a school board in the state of Maryland. In that role, Flatow says, he was up front with the community in providing information.

“Ultimately, [propane] is not only a safety issue, which is a primary concern for people, but it’s about their property values and things of that sort,” he says. “When you look at propane industry engineering controls associated with plants, the relationship the industry has with fire services, how many marketers volunteer with fire departments and the stringent regulations that go into it – when people start to understand that – they can feel a little better.”

Kevin Yanik

About the Author:

Kevin Yanik is the senior editor of LP Gas Magazine. Contact him at kyanik@northcoastmedia.net or 216-706-3724.

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