NGLs

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    Kentucky County Suing to Stop TGP from Reversing Pipeline for NGLs

    Rowan County, KY

    In February MDN told you that Kentucky antis went to court to try and block a plan by Kinder Morgan to convert a portion of the Tennessee Gas Pipeline that flows natural gas from the Gulf Coast to the northeast, to reverse the pipeline and flow natural gas liquids from the Marcellus/Utica region to the Gulf (see Kentucky Antis File Lawsuit to Stop TGP NGL Pipe Reversal). The reversal is part of a $4 billion project called the Utica Marcellus Texas Pipeline (UMTP) project. The first step in reversing the existing pipeline was approved by the Federal Energy Regulatory Commission last October (see FERC Advances Plan to Reverse Part of TGP to Haul M-U NGLs to Gulf). Antis in Kentucky got their bluegrass knickers in a twist over FERC’s action. They filed a request for “rehearing” of FERC’s decision, which is the first step in a process that typically ends up in court. Normally FERC has 30 days to decide on a rehearing, however, they have a tactic they call a “tolling order” which allows them to extend the amount of time to make a rehearing decision–indefinitely. FERC pulled out the tolling order card and played it last November (see FERC Frustrates Kentucky Radicals Seeking to Stop TGP Pipe Reversal). The ticked-off antis filed a lawsuit challenging the FERC tolling order. While all of that continues to play out, one of the Kentucky counties along the TGP route–Rowan County–is filing its own lawsuit to stop the reversal and conversion of the pipeline. No, Rowan County has no standing to file such a lawsuit, but apparently they’ll need to learn that the hard way…
    Read More “Kentucky County Suing to Stop TGP from Reversing Pipeline for NGLs”

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    ME1 Pipeline Shutdown in M-U Causing Propane Prices in TX to Drop

    Propane is one of the NGLs (natural gas liquids) that come out of the ground along with natural gas and oil–especially in “wet gas” areas like southwestern PA, eastern OH, and the northern panhandle area of WV. Ethane and propane have been flowing through the converted Mariner East 1 (ME1) pipeline for more than year–hauling propane (and ethane) from southwest PA all the way to the Marcus Hook refinery near Philadelphia. At Marcus Hook, the propane is loaded onto ships and sent around the world. The world is an important market for our propane. However, ME1 was suddenly switched off on March 3 by order of the Pennsylvania Public Utility Commission (PUC) after a sinkhole opened up under the pipeline, exposing some of the bare steel to the open air (see PA PUC Shuts Down Mariner 1 Pipeline Due to Mariner 2 Sinkhole). Sunoco Logistics Partners, the owner of ME1, is building a new set of pipelines called Mariner East 2 (ME2) close to the existing ME1. ME2 will also haul ethane and propane to Marcus Hook, greatly expanding capacity. As part of their construction work in Chester County, several sinkholes developed leading to the shutdown of ME1. You might think if the supply of propane suddenly stops, prices would go up. But that’s not what happened. Because the propane ME1 was hauling to Marcus Hook was exported, that supply is now staying here at home. The effect has been to drive DOWN the cost of propane–in Texas!…
    Read More “ME1 Pipeline Shutdown in M-U Causing Propane Prices in TX to Drop”

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    FERC Rejects Blue Racer Midstream Plan to Change NGL Pipe Rates

    We have to confess this story is a bit complex to understand. We will take a stab at making the complex understandable. Blue Racer Midstream has a subsidiary called Blue Racer NGL Pipelines LLC. The subsidiary operates the G-150 pipeline system, which provides batched propane and butane service. G-150 currently, located in West Virginia, connects a Natrium, WV processing plant to the TE Products Pipeline Co. (TEPPCO). The G-150 pipeline will also have a connection to the Mariner East 2 Pipeline when it goes into service, theoretically in June of this year. Currently the G-150 is flowing about 6,300 barrels per day of product through it–only 20% of its capacity. When the connection with ME2 is up and running, Blue Racer says it can handle 30,000 bbl/d through the G-150. However, Blue Racer itself signed up for most of the capacity (27,000 bbl/d). Blue Racer recently asked the Federal Energy Regulatory Commission (FERC) to allow it to have two different rate structures–a lower rate for “committed” shippers (Blue Racer itself with its 27,000 bbl/d) and a higher rate for uncommitted shippers. FERC rejected the request pointing out that existing shippers with contracts–namely Chesapeake Energy–would be left out in the cold in favor of Blue Racer moving its own volumes at lower prices. Yes, it’s complicated. Bottom line, Blue Racer can’t do what it wants and has to go back to the drawing board…
    Read More “FERC Rejects Blue Racer Midstream Plan to Change NGL Pipe Rates”

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    Range, CNX Look for Alternatives to ME1 Pipe Following Shutdown

    MDN reported yesterday that due to underground horizontal direction drilling (HDD) in Chester County, PA (near Philadelphia) for the Mariner East 2 (ME2) Pipeline project, a third sinkhole had developed (see PA PUC Shuts Down Mariner 1 Pipeline Due to Mariner 2 Sinkhole). ME2 is being built close to the existing Mariner East 1 (ME1) pipeline. The sinkhole exposed a portion of the ME1 pipeline to the open air. Not a good situation, which is why the state Public Utility Commission has temporarily shut down the propane and ethane flowing through ME1. The shutdown is for 10-14 days. Problem is, both Range Resources and CNX Gas pump propane and ethane through ME1. With the shutdown, both companies are “scrambling” to find alternative means to get their NGLs to market…
    Read More “Range, CNX Look for Alternatives to ME1 Pipe Following Shutdown”

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    Final State Permits Expected Soon for OH Mountaineer NGL Storage

    Some new details have emerged with respect to the Mountaineer NGL Storage facility proposed for Monroe County, OH, located just across the river (and border) from West Virginia. What did we know about the proposed project? The Colorado company behind the project plans to spend up to $500 million to build it; some 20 drillers have expressed interest in contracting with the facility to store ethane; and the nearby PTT Global cracker plant project (if it gets built) and the under-construction Shell cracker plant are both interested in connections to the facility. Last November, we learned there is a construction delay until mid-this year (see Yet Another Update on Stalled Mountaineer NGL Storage Proj in OH). Why the delay? Because of regulators in Ohio. At the “Emerging Opportunities Ohio Valley Conference” held yesterday in WV, Mountaineer NGL president David Hooker provided an update and some new-to-us details about the project. He said his company will file paperwork for “final state permits” in March. While “not a lot has changed” with Ohio regulators dragging their feet, here’s something that has changed. In order to pump out the NGLs from the underground storage cavern, brine (salty water) will be pumped down the bore hole, to force the NGLs back up to the surface. Original plans called for a single brine pond to store the liquid when it’s at the surface, waiting to be used. New plans call for two brine ponds. So far Mountaineer has spent $20 million on the project. If everything gets approved and demand develops as expected, the plan is to spend up to $130 million, which will build enough infrastructure to store 3 million barrels of NGLs. However, there is also a stretch goal of investing up to $500 million to store 10 million barrels. Here’s an update from our friends at Kallanish Energy, who attended yesterday’s event…
    Read More “Final State Permits Expected Soon for OH Mountaineer NGL Storage”

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    UTOPIA has Arrived! KM OH Pipe Flowing Ethane to Canadian Cracker

    UTOPIA Pipeline route – click for larger version

    In January 2016, Kinder Morgan (KM) committed to building the UTOPIA (Utica To Ontario Pipeline Access) pipeline, a 12-inch ethane pipeline that will run ~240 miles across the state of Ohio where it will connect with another pipeline and flow ethane all the way to a cracker plant in Canada (see Kinder Morgan Ready to Move Forward with UTOPIA East Pipeline). However, all was not utopia with UTOPIA–some Ohio landowners got a bumble bee in their bonnet and refused to deal. KM first sued them using eminent domain, then decided to alter the route instead and signed leases with more reasonable landowners (see UTOPIA East Pipe Re-Routes Around OH Antis, Drops Eminent Domain). Last June, KM’s vice president of public affairs, Allen Fore, said UTOPIA was under construction and due to go online in January 2018 (see UTOPIA NGL Pipeline Under Construction, Should be Online Jan 2018). And so it has! Yesterday KM announced UTOPIA is up and running and flowing ethane from the Utica/Marcellus all the way to a cracker plant in Canada…
    Read More “UTOPIA has Arrived! KM OH Pipe Flowing Ethane to Canadian Cracker”

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    Ohio Continues to Drag Feet Approving Mountaineer NGL Storage

    We’ve written plenty about Mountaineer NGL Storage hub project proposed for Monroe County, OH, located just across the river (and border) from West Virginia (see our Mountaineer NGL Storage stories here). What do we know about the proposed project? The Colorado company behind the project plans to spend up to $500 million to build it; some 20 drillers have expressed interest in contracting with the facility to store ethane; and the nearby PTT Global cracker plant project (if it gets built) and the under-construction Shell cracker plant are both interested in connections to the facility. In November, we learned there is a construction delay until mid-this year (see Yet Another Update on Stalled Mountaineer NGL Storage Proj in OH). Why the delay? The delay is because of regulators in Ohio. There is no one agency charged with reviewing and issuing permits for the entire project–it involves three OH agencies. There also seems to be an issue with one of the agencies, the Ohio Dept. of Natural Resources (ODNR), becoming comfortable with storing NGLs in a salt cavern (done all the time in other locations). ODNR is dragging its feet, and members of the Ohio Oil and Gas Association (OOGA) are beginning to publicly voice their dissatisfaction with the delays…
    Read More “Ohio Continues to Drag Feet Approving Mountaineer NGL Storage”

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    What is Condensate? A Closer Look at this Important Shale Hydrocarbon

    From time to time MDN mentions condensate. What, exactly, is condensate? We’ve seen it described as a “light” form of crude oil. Condensate is an important component of what comes out of wells drilled in southwestern Pennsylvania and eastern Ohio. Condensate can be sold for a higher price that plain old natural gas molecules. As we’ve often written, when you sink a hole in the ground looking for one hydrocarbon, like oil or gas, you get other hydrocarbons out of the ground along with it. Natural gas (methane) comes out of holes drilled looking for oil, and the reverse. And just about all of the holes drilled get some form of natural gas liquids–including ethane, pentane, butane and propane. So where does condensate sit in the constellation of hydrocarbons? Is it closer to crude oil? Or closer to natural gas and NGLs? Two ships collided in the East China Sea over the weekend–one of them loaded with condensate. The ship exploded and all 32 souls on that ship died in the blaze or are lost at sea. So Reuters posted an article to explain just what the heck condensate is. We found the article useful for our own understanding, and thought you might too…
    Read More “What is Condensate? A Closer Look at this Important Shale Hydrocarbon”

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    Propane Prices in the Northeast & ME2 Pipeline

    A lot of the talk and chatter this week has been about the spike in the price of natural gas (see today’s lead story, NatGas Trading in NYC Hits $175/Mcf – Highest Ever Recorded!). The other hot topic of the week is the decision by the Pennsylvania Dept. of Environmental Protection (DEP) to temporarily suspend all construction work on the Mariner East 2 (ME2) Pipeline. What antis in the Philadelphia area don’t realize is that ME2 is vital to their own region and their own pocketbooks. Yesterday we brought you one take on why Philly residents are missing the boat in opposing ME2 (see It’s Time We Stop Missing the Point About the Mariner East Pipes). In that guest post, MDN friend Garland Thompson makes the salient point that jobs and the Philly economy are tied to petrochemicals and the NGLs that will flow through the Mariner East pipelines. Today we bring you another article about why ME2 is so vital to the Philly area: the cost of propane. One of the primary NGLs that will flow through ME2 is propane, used in a variety of applications, but particularly used in places where there are not natural gas pipelines to deliver gas to homes (like the various suburbs around Philly, the ones opposing ME2). Propane prices are going up because (a) much of the propane produced by Marcellus/Utica drillers goes by railcars to Kansas, where it catches a ride on a pipeline to the Gulf Coast, and (b) the propane that does come to the Philly area also comes via rail cars, at a much higher price than if it were shipped via pipeline. Add to that other countries want our propane and are bidding the price up–and you have a prescription for spiking propane prices around Philly. The article below delves into the business of propane, explaining terms you may have heard but don’t know what they mean–like “contango” and “backwardation.” Buckle up–here’s a deep dive into the economics of propane, and why Philadelphia desperately needs the ME2 pipeline–without delay…
    Read More “Propane Prices in the Northeast & ME2 Pipeline”

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    Appalachian NGL Storage Hub Gets Serious with DOE Loan Guarantee

    Just yesterday MDN told you that Mountaineer NGL Storage wants to be THE main ethane/NGL storage hub for the Marcellus/Utica region (see Mountaineer NGL Wants to be THE Appalachian Storage Hub). There has long been talk of a major, $10 billion regional NGL storage hub. But until know it’s been just that–talk. A major hub is now much more of a possibility. Last June West Virginia’s U.S. Senators, Shelley Moore Capito (Republican) and Joe Manchin (Democrat), introduced Senate Bill 1337–the “Capitalizing American Storage Potential (CASP) Act”–a bill that would make a regional ethane storage hub (hopefully built in WV) eligible for the Department of Energy’s Title XVII loan guarantee program (see WV Sens. Capito & Manchin Introduce 2 More Ethane Storage Hub Bills). The bill didn’t go anywhere, but the intention of the bill certainly did. Yesterday it was announced that the DOE has invited those promoting the regional ethane storage hub to submit “Part II” of the application for a Title XVII loan guarantee of $1.9 billion. There’s a lot to unpack in the announcement below. First, the regional storage hub has an official name: The Appalachia Storage & Trading Hub (first time we’d read of it). Second, the project has an official backer: the Appalachia Development Group, LLC (or “ADG”). Third, ADG previously filed Part I of the application with the DOE, back in September. Fourth, since the DOE has invited ADG to supply Part II of the application, that implies Part I from September was/is approved. Fifth, $1.9 billion is far short of the eventual cost bandied about of $10 billion–but it can certainly get this project off the ground and running. And sixth, this is NOT a loan from the government, it is a guarantee. Someone else would make the loan, but the full faith and credit of the United States would back it up, in case of default. A Title XVII loan guarantee makes it much easier to find a loan…
    Read More “Appalachian NGL Storage Hub Gets Serious with DOE Loan Guarantee”

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    Mountaineer NGL Wants to be THE Appalachian Storage Hub

    When the topic of NGL (natural gas liquids) storage comes up with respect to the Marcellus/Utica region, there are two separate and distinct projects mentioned: A massive, $10 billion ethane/NGL storage hub with no specific location identified as yet (but West Virginia often named), and the much smaller Mountaineer NGL storage hub proposed for Monroe County, OH. Recently none other than the U.S. Dept. of Energy issued an NGL primer to call attention to the need for a large NGL storage hub (see DOE Publishes NGL Primer for Marcellus/Utica, Pushes NGL Storage). The Mountaineer project was mentioned in the DOE report. We’ve written plenty about Mountaineer NGL, located just across the river (and border) from West Virginia (see our Mountaineer NGL Storage stories here). What do we know about the proposed Mountaineer NGL Storage project? The Colorado company behind the project plans to spend up to $500 million to build it; some 20 drillers have expressed interest in contracting with the facility to store ethane; and both the nearby PTT Global cracker plant project (if it gets built) and the under-construction Shell cracker plant are both interested in connections to the facility. In November, we learned there is a construction delay until mid-this year (see Yet Another Update on Stalled Mountaineer NGL Storage Proj in OH). We are on record having previously said this: “Could the Mountaineer NGL Storage project end up being THE main NGL project for the entire region, being touted by so many? No. But it is an important project–one of the key pieces of the NGL storage puzzle that will serve our region.” It appears Mountaineer may not agree with our take. In an interview with the Pittsburgh Business Times, Mountaineer makes it clear they want to be THE NGL storage hub for the Marcellus/Utica region. Instead of building a huge $10B project from the start, Mountaineer’s strategy is to grow slow but steady–responding to market conditions along the way. Mountaineer says that’s how it was done in Texas, and that’s how they believe it can (and should) be done in our region…
    Read More “Mountaineer NGL Wants to be THE Appalachian Storage Hub”

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    DOE Publishes NGL Primer for Marcellus/Utica, Pushes NGL Storage

    The Trump Dept. of Energy is hopping on the natural gas liquids storage bandwagon. Yesterday the DOE published a 45-page report called, “Natural Gas Liquids Primer: With a Focus on the Appalachian Region” (full copy below). The DOE uses its own data along with data from the U.S. Energy Information Administration (our favorite government agency) to create an up-to-date picture of Appalachian NGL supply, demand, and infrastructure. What does that picture show? It shows we are in desperate need of our own regional NGL storage facilities. No doubt one of the reasons for the report is to goose China into investing in a proposed $10 billion NGL storage plan being pushed by many (see Tyler County, WV Mentioned as Candidate for $10B NGL Storage Hub). The report gives an important shout-out to the Mountaineer NGL Storage project. The report is a primer–it runs through the basics of NGLs (what they are, why they’re important). The DOE says this report is an important first step in preparing a more comprehensive report requested by Congress about the benefits of Marcellus/Utica NGLs. That comprehensive report will be ready sometime next year. In the meantime, this report will give you an important foundation of knowledge…
    Read More “DOE Publishes NGL Primer for Marcellus/Utica, Pushes NGL Storage”

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    Tyler County, WV Mentioned as Candidate for $10B NGL Storage Hub

    In May 2016, MDN brought you the news that a researcher at West Virginia University (WVU) believes a natural gas liquids (NGL) storage hub is what the Marcellus/Utica region really needs (see WVU Researcher Says Marcellus/Utica Needs an Ethane Storage Hub). According to Brian Anderson, director of WVU’s Energy Institute, without ethane storage (and pipelines) the Marcellus/Utica region risks seeing its abundant ethane leave the area, mostly heading to the Gulf Coast. We need that ethane here, in our area. Kevin DiGregorio, executive director of the Chemical Alliance Zone, also took up the cause in an editorial in July 2016 (see WV, OH, PA, KY Should Cooperate on $10B NGL Storage Hub). Since that time we’ve run a number of stories about the proposed $10 billion NGL storage hub for the Marcellus/Utica. In particular, West Virginia’s two U.S. senators, Shelley Moore Capito (Republican) and Joe Manchin (Democrat) have been pushing hard for such a hub (see WV Senators Ask Trump to Create NGL Storage Hub Commission). It has been thought that WV and PA and OH would need to cooperate to help fund such a project. Even the mighty Shell cracker is “only” costing $6 billion! So $10 billion is almost incomprehensible. But then everything changed last week when we told you we now have a pretty good idea of how the project will get funded–by the Chinese (see China Agrees to Invest Amazing $83.7 BILLION in WV Shale, Petchem). West Virginia has, from the beginning, been the state most often mentioned as the location for such a storage hub–but until now no specific site has come across our radar. That’s changed. With money flowing from China for a bevy of shale-related projects, different locations across the Mountain State are speaking up. Tyler County is the latest, saying they are under consideration for the $10B NGL storage hub, and they will do “whatever needs to be done” to win the project. There are, however, two other locations in WV also under consideration…
    Read More “Tyler County, WV Mentioned as Candidate for $10B NGL Storage Hub”

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    More on that Massive $83.7B Chinese Investment in WV Shale/Petchem

    We’re still reeling after yesterday’s announcement that China has agreed to invest $83.7 billion in the State of West Virginia–largely in shale and shale-related petrochemical projects (see China Agrees to Invest Amazing $83.7 BILLION in WV Shale, Petchem). Let’s put China’s promised investment in perspective. The GDP (gross domestic product, or the value of all of the state’s economic activity) for WV last year was $73.4 billion. One expert calculates the entire investment by the Marcellus/Utica industry in WV so far has been about $35 billion. The investment by China, which will be spread out over 20 years, is larger than all of the economic activity in WV for a single year, and 2.5 times the investment made by the shale industry so far! That’s massive. It’s huge. It’s mind-blowing. There really aren’t words big enough for this investment–IF it comes to be. You see, what was signed in China yesterday is a Memorandum Of Understanding (MOU). It’s a handshake–a gentleman’s agreement. And sometimes those agreements disappear. So this is far from a done deal. However, we’ll take it. If even half of the promised investment becomes reality, it’s game-changing. It is, according to WV Gov. Jim Justice, the single largest private investment in the state’s history. Now that we’ve had 24 hours to digest the news, a number of people are talking. While we still don’t have specificity about the projects that will get funded with this money, we do have more insight. The first couple of projects to get funded will be electric generating power plants–powered by Marcellus/Utica gas. And we know where those plants will most likely be located: “one in Harrison County and one in Brooke County” according to head of the WV Chamber of Commerce. Cracker plants (plural) are also being talked about for WV. We’ve been monitoring the news since yesterday’s announcement and have collected a number of excerpts below of what people (in the know) are saying about this historic deal…
    Read More “More on that Massive $83.7B Chinese Investment in WV Shale/Petchem”

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    Yet Another Update on Stalled Mountaineer NGL Storage Proj in OH

    Over the past six months we’ve run a steady string of stories about Mountaineer NGL Storage and its proposed underground NGL (mostly ethane) storage facility in Monroe County, Ohio, near Clarington, along the Ohio River (see our Mountaineer NGL Storage stories here). We’ve learned that the Colorado company behind the project plans to spend up to $500 million to build it, that 20 drillers have expressed interest in contracting with the facility to store ethane, and that both the nearby potential PTT Global cracker plant and the under-construction Shell cracker plant are both interested in connections to the facility. We’ve also learned there is a holdup with some of the necessary permits for the project before construction can begin–a situation that has delayed construction until mid-next year. This morning we ran across yet another update. This one goes into more detail about the permit situation, explaining where the holdup is happening (with the Ohio Dept. of Natural Resources’ chief Rick Simmers). The update also introduces us to a new spokesman for the project, a local who will be the project’s feet on the street, meaning we’ll likely hear a lot more about the project in the coming weeks and months…
    Read More “Yet Another Update on Stalled Mountaineer NGL Storage Proj in OH”

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    Crestwood Sells Salt Operation in Watkins Glen, Keeps LPG Storage

    Our heart stopped when we saw news from Crestwood Equity (used to be called Crestwood Midstream) yesterday that the company has sold its US Salt business on the shore of Seneca Lake near Watkins Glen to Kissner Group for $225 million. We thought, “Oh no! Crestwood has finally thrown in the towel on their Seneca Lake Propane Storage project!” But alas, our fears were unfounded. Background: In 2009 Inergy filed a request to convert a depleted salt cavern along the shore of Seneca Lake (in Schuyler County, NY, near Watkins Glen) into a propane/natural gas storage facility. Inergy was later bought by and merged into Crestwood Midstream, and Crestwood Midstream later renamed itself Crestwood Equity Partners. The New York Dept. of Environmental Conservation (DEC) has been sitting on its hands from the beginning, refusing to grant the necessary permits to allow the facility to open. Sound familiar? Same old delay and later deny strategy from our corrupt governor, Andrew Cuomo. As recently as May of this year, Crestwood remained committed to building the storage facility in depleted salt caverns originally drilled by US Salt, which is owned by Crestwood (see Crestwood Drops Seneca Lake Natgas Storage Plan, Keeps LPG Plan). Crestwood scaled back the plan, excluding storage of natural gas and instead sticking with storing just propane (or LPG, liquefied petroleum gas). So when we read the news in Crestwood’s third quarter update yesterday that the company has sold off US Salt–we thought that was the end of the LPG storage project. Apparently antis in the Finger Lakes region thought the same thing. A local news outlet published an incorrect story stating the LPG storage project is dead. But then Crestwood issued a follow-up statement to say no, the LPG project is still alive and kicking–they kept that part of the US Salt real estate and still intend to build the storage facility, when/if the corrupt Cuomo DEC issues the necessary permits…
    Read More “Crestwood Sells Salt Operation in Watkins Glen, Keeps LPG Storage”