Louisiana is known for its vast amount of natural resources onshore as well as offshore. While crude oil and natural gas are now both being produced in massive quantities right here in our state, storage for these resources has to be considered. Also, Louisiana is home to numerous salt dome storage caverns. While news stories have drawn some conclusions between the similarities of storage caverns used for natural gas and salt dome storage caverns used for salt mining operations, the differences are quite specific.
Recently, a four-acre sinkhole has formed beneath Bayou Corne in Assumption Parish, likely due to a salt dome storage cavern collapse. This event has caused some concern to the surrounding residents as to what caused it and how it can be further prevented. The media was quick to run a story comparing an instance that occurred decades ago beneath Lake Peigneur where a salt mine collapsed and the Bayou Corne incident. As technologies have drastically advanced, the two instances cannot be compared. Bayou Corne is a salt brining facility where the cavern is leached out and used for salt-water storage. The salt-water is later pumped out and used for industrial manufacturing.
There seems to be some confusion even by some elected officials as to the use of salt dome caverns, such as the one in Assumption Parish that is used for salt-water storage. Louisiana State Senator Fred Mills plans to again introduce a bill before the state legislature that would require companies to conduct an environmental impact statement (EIS) before expanding natural gas storage caverns beneath Lake Peigneur. He has proposed a similar bill before the legislature last year that failed.
Additional regulation for natural gas storage is clearly not the answer all due to an accidental leak at Bayou Corne that is unrelated to natural gas storage, or due to an event some 30 years ago. Additionally the information that is contained in an EIS has already been submitted to the Office of Conservation for this project, just in a different format.
As our country begins its quest to move away from solely depending on foreign resources to fulfill our demand, being able to store the abundant natural gas that Louisiana is producing is vitally important. According to the Federal Energy Regulatory Commission (FERC), “The underground storage of natural gas has historically been critical in assuring that overall demands and use specific requirements of natural gas customers are met.”
Natural gas storage facilities exist all across the lower 48 states of the US. According to the U.S. Energy Information Administration (EIA), there are currently close to 400 underground storage facilities. As the 20-plus shale plays in the US continue producing a massive supply of natural gas, the need for more storage is obvious.
Additional regulations for the natural gas industry will only increase cost, further hampering economic development. It is important to remember 2010 when the federal government irresponsibly called for a moratorium in the Gulf of Mexico, due to one accident. This additional regulation caused billions of dollars in lost revenue to an already flailing economy, and several thousand jobs were terminated.
While the oil and gas industry will be the first to agree that proper safety procedures need to be in place and some regulation is necessary, over-regulating natural gas storage today due to a salt mine leak some 30 years ago is a touch overboard.