Spectra Energy’s Underground Gas Storage Field
Reduces Property Value in Bedford County, PA;
County Board of Assessment Should Consider Impact of Eminent Domain, Public Safety & Environmental Issues;
Threat from Underground Gas Leaks in PA
Subject of November Geologists’ Workshop in Pittsburgh
As Bedford County property owners know well, county officials launched the first property assessment to revise property tax valuations since 1957. As part of that, a company known as Tyler Technologies was reportedly paid nearly $2 million in taxpayer dollars to do on-site inspections of properties in order to set current values.
Our experience and that of every property owner I’ve talked with indicates that Tyler Technologies’ assessment forms are replete with errors. The formal appeal process is now filling meeting rooms at the Bedford County Commissioners’ offices on South Juliana Street.
Citizens who appeal are asked to sign a waiver because Pennsylvania law requires the board to issue a decision on each appeal within five days – which will be impossible, given the overwhelming number of appeals.
Part of our formal appeal is that Spectra Energy’s 12 billion cubic feet underground gas storage field – called Steckman Ridge – negatively impacts property values of those landowners who are on top of, or near, the Steckman Ridge field.
There are two primary reasons for this:
Eminent domain & the storage field reduces property owner rights & the use they can make of their own property
Public safety & environmental risks
Steckman Ridge Reduces Property Rights & Value
Many properties in the Clearville area (perhaps as many as 150 or more) now sit on top of, or near, a huge 12 billion cubic feet underground gas storage field. To do this, property rights were seized by Houston-based Spectra Energy under the threat of eminent domain, given to it by the Federal Energy Regulatory Commission (FERC). It is dubbed the Steckman Ridge project.
The seizure of property rights under the threat of eminent domain and the presence of this underground storage field with its pipelines and huge compressor station restricts the use that property owners can make of their own land.
For example, area property owners who possess mineral rights once enjoyed an annuity stream from royalties paid by Pennsylvania General Energy for the extraction of natural gas from the Oriskany formation.
Once Spectra Energy, under the badge of FERC, seized these property rights for its storage field, the possibility of further potential recovery from other formations (including but not limited to the Marcellus Shale) is virtually eliminated.
In fact, Spectra Energy filed motions with a federal judge in Johnstown that, in the event of a jury trial over just compensation, property owners should not be permitted to even argue lost economic value related to any potential recovery of native gas from the Marcellus Shale or other formations. Nor should they be permitted to question Spectra Energy or any of its expert witnesses on the subject.
In addition, buildings cannot be erected nor can trees be planted over right-of-way areas (e.g., pipelines). In some cases access is denied. All of this reduces economic value to the property owner.
Furthermore, property owners were not compensated in the same manner as Spectra Energy’s March 11, 2009 lease agreement with the Pennsylvania Game Commission for the neighboring game lands (#49, Tract 49A-01). Perhaps Spectra Energy can explain why “just compensation” for the state government is different than the “just compensation” it typically offers private property owners.
Threats to Public Safety & the Environment Reduce Property Value
Spectra Energy had a real-life opportunity to demonstrate its commitment to public safety and rapid response during an unexpected emergency shutdown on August 23. For details, see our blog post at this link: http://www.spectraenergywatch.com/blog/?p=372
The emergency shutdown occurred when the nearly 5,000 horsepower compressor sitting on top of the 12 billion cubic feet underground gas storage field shut down due to a gas leak. There was a blow off of natural gas and a spray of contaminant on neighboring homes and properties.
Spectra Energy’s operational response was so bad that the Pennsylvania Department of Environmental Protection (DEP) issued a “Notice of Violation” on September 16 to the company for its problematic response. To view a pdf copy of the DEP notice, click here: dep-violation-notice-p1 dep-violation-notice-p2
Spectra Energy’s Response to a Public Emergency
- It took three days for the company to officially notify residents of the incident and ask them not to eat their vegetables until the contaminant could be tested.
- Two days after the emergency, the company still had not contacted the Pennsylvania Department of Environmental Protection (DEP), or the Bedford Emergency Response. In fact, DEP contacted Spectra Energy first, after hearing from property owners.
- Spectra Energy had trouble finding the contaminant. First, they say they did not realize it had spread off site. Second, they told one property owner that she wasn’t hit, then later admitted her property had been hit by the contaminant and couldn’t explain why they didn’t identify it, according to a neighboring property owner.
None of this behavior is a reassuring benchmark for safety or operational excellence.
Finally, the reported air emissions for Spectra Energy in 2008 is measured in tons, according to DEP records. These emissions include: nitrogen oxides, volatile organic compounds, carbon monoxide and formaldehyde, among other pollutants. Here is the DEP link: http://www.ahs2.dep.state.pa.us/eFACTSWeb/searchResults_singleFacility.aspx?FacilityID=466924
Threat from Underground Gas Leaks in PA
As more folks are learning, gas migration can potentially cause serious problems to communities and property owners.
A recent article published in Environmental Science & Technology (© 2009 American Chemical Society), and written by Rebecca Renner, looks specifically at the issue in Pennsylvania. Following are two excerpts from that article which is dated Sept. 2, 2009 (Emphasis added):
“Natural-gas leaks are relatively common in Pennsylvania, which employs a full-time geologist to investigate such incidents. In recent years, some of these leaks have had devastating consequences, including home explosions and fatalities, according to an investigation by ProPublica, Inc., an independent nonprofit newsroom. Leaks are mainly a legacy of the state’s fossil fuel drilling and mining history; however, leaks from operating wells have caused explosions and even fatalities.
“Tracing the leaks is difficult, because sources include gas wells, natural-gas storage fields, pipelines, coal mines, and landfills – all of which can be either active or abandoned. Bacterial degradation of organic matter also produces methane. Stable-isotope analysis is an essential tool for identifying the source, according to Pennsylvania Department of Environmental Protection (PA DEP) geologist Fred Baldassare, who investigates stray gas leaks.”
Article pdf file: spate-of-gas-drilling-leaks-raises-marcellus-concerns-environmental-science-technology-acs-publications
The issue is serious enough to merit a two-day Stray Gas Workshop in Pittsburgh, November 4-6, 2009. Fred Baldassare, geologist for the Pennsylvania Department of Environmental Protection (PA DEP), will be a speaker.
The conference is co-sponsored by the U.S. Geological Survey and the Pittsburgh Geological Society, with the collaboration of the federal Office of Surface Mining Reclamation and Enforcement and the PA DEP. Website: http://pa.water.usgs.gov/stray_gas/
In Summary
The presence of a huge underground natural gas storage field subtracts from property values because of limitations on property rights, as well as demonstrated public safety and environmental threats. This should be recognized in the assessment of properties that are impacted by the presence of this storage field.
In addition, companies engaged in such operations, such as Spectra Energy, should be closely monitored and held to the highest standards of safety. The threat of migrating gas underground also needs to be understood so it can be addressed.
Photos of Steckman Ridge Compressor Station Complex — “looks like a small city,” according to one Clearville, PA, property owner. First photo shows a view of compressor station and nearby residence. Welcome to the Neighborhood Watch Group, Spectra Energy. [Click on photos to enlarge.]
