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Handcuffed: NY gas storage project beset by protests, state inaction

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Handcuffed: NY gas storage project beset by protests, state inaction

Calling a stalled ArlingtonStorage Co. LLC expansion a "bad deal" for the FingerLakes area of New York, residents and other opponents have fiercely protestedthe natural gas storage project in a bid to stop the project before developmentresumes.

The series of protestsof the Arlington Storage Gallery2 expansion has rung up 585 arrests affecting 373 demonstrators, manybelonging to the group We Are Seneca Lake. Roughly 400 arrests occurred duringthe first year of opposition to the project.

Environmental and economic concerns have fueled theprotests, which began in October 2014, just after the Crestwood Equity Partners LP-affiliated ArlingtonStorage received FERC approvalto begin construction work.

"The gas is not for us," Sandra Steingraber, abiologist and activist who serves as spokeswoman for We Are Seneca Lake, saidin an interview. "It's leaving by pipeline, so we get none of the rewards,so it's just a bad deal for the Finger Lakes."

Steingraber said part of that deal could includecontamination of Seneca Lake, a source of drinking water for the area, andindustrialization of a region where the local economy is bolstered by over 30wineries on the lake. We Are Seneca Lake is also concerned thatthe project could hinder the state's attempt to turn to renewable energysources over fossil fuels.

Spokeswoman Elizabeth Suman said Crestwood had nocomment for this article.

Case of themissing geologist

Addressing concerns over environmental impacts in its orderto grant the project a two-year extension, FERC stood by its conclusions in theproject's environmental assessment. The commission found that "there willbe no significant impact on environmental resources due to geologic hazards orfrom the geologic framework." FERC on May 16 approved a two-year extensionto complete the Gallery 2 project.

However, under New York's Environmental Conservation Law,Arlington Storage must also obtain an underground-storage permit from the state'sDepartment of Environmental Conservation, or DEC. To date, the DEC has notissued the necessary approval for the project. The department hasnot acted because the permit can be granted only after an approval from thestate geologist, a position that has been vacant since the middle of 2013.Antonia Giuliano, spokeswoman for New York's Department of Education, which hasjurisdiction over the geologist position, confirmed that there is not even anacting state geologist on staff. According to the DEC, the missing stategeologist is the only thing standing between the storage project andconstruction.

"These circumstances are clearly beyond Arlington'scontrol," James Bowe Jr. and William Rice, attorneys for ArlingtonStorage, said in a letter to FERC related to the extension request.

Future options

The members of We Are Seneca Lake are worried that the FERCextension could give Arlington Storage time to find another way forward. Underthe Natural Gas Act, Arlington Storage could request FERC approval to begin toprepare for construction as a way to proceed while it waits on the state permitbecause the commission-approved project has all necessary federal permits.

"The … extension of time will allow Arlingtonadditional time to press the [DEC] for issuance of the storage permit, todetermine whether issuance of the [storage permit] is expected to occur anytime soon and, if not, to pursue legal alternatives that would enable it toconstruct and complete the Gallery 2 expansion project," counsel forArlington Storage said.

In comments filed with FERC, critics charged that theproject would only add to the glut of available natural gas. They pointed toArlington Storage's intent to host another open season as proof that theCrestwood subsidiary is waiting for a more favorable market environment beforebeginning construction.

While Arlington Storage did not enter precedentagreements prior to FERC approval of the project, the company claimed it hadreceived interest for additional storage capacity from potential customers. Thecompany relied on various arguments to support project need, including alocation in a competitive market area, Arlington's decision to assume allfinancial risk and secure all property rights, and the minimal constructionrequired to accomplish the project.

"Arlington … still believes there is sufficientcustomer interest to justify its expansion project, and it plans to holdanother open season in the first half of 2016," FERC observed in itsextension order. "It is likely Arlington will only commence constructionif it determines that there is sufficient demand for the expansion capacity tojustify the project's expense."

The project would convert two salt caverns fromliquefied petroleum gas storage to natural gas storage, increasing the facility'scapacity from about 1.45 Bcf to 2 Bcf of working gas. (CP13-83)