In May, the New Jersey Department of Environmental Protection proposed new rules to regulate underground storage caverns for holding “any natural or artificial gas, or any petroleum product or derivative of any petroleum product.” At first glance, the changes seemed benign and long past due: It is a measure intended to update a law enacted more than 70 years ago.
But to some advocates, the proposed new regulations, if passed as currently written, would be deeply antithetical to the Murphy administration’s efforts to reduce greenhouse-gas emissions and to become a national leader in the environmental justice movement. Instead, they say the rules change offers an invitation for the oil and gas industry both to expand in New Jersey and to further exacerbate pollution and the burdens of climate change in some of the state’s most vulnerable communities.
“One of the things that we are concerned about in terms of environmental impacts, and also public health and safety community impacts, is that (New Jersey’s) going to become a hub for these things if we set up a regulatory regime that basically tells the industry how to get their approvals and build them,” said Tracy Carluccio, deputy director of the Delaware Riverkeeper Network.
The original 1951 law addressed the use of underground storage caverns for liquefied gas, petroleum or chemical storage and only required any entity interested in excavating a cavern to obtain a permit from the DEP. The statute noted that the department would prescribe “rules and regulations to effectuate the provisions of this act,” but, Carluccio said, “they just never did it.”
Storage caverns on the map
Currently, there are only two locations in New Jersey where underground storage caverns exist.
The state’s original and largest site is in Linden, Union County, at the Bayway Refinery. Between 1954 and 1958, the Esso Standard Oil Co. built five separate caverns to store propane and butane. Today, the refinery is owned by Phillips 66, which utilizes the caverns for the same purpose.
Underground storage caverns have been in use for more than a half-century across the United States. The majority are in the Gulf Coast states.
The second site is in Gibbstown, Gloucester County, at the former DuPont Repauno factory, which produced chemical and dynamite products throughout the 20th century. DuPont constructed only one cavern and used it to hold anhydrous ammonia. After the Gibbstown site was purchased by Delaware River Partners LLC and renamed the Repauno Port & Rail Terminal, the cavern was repurposed to hold butane.
While most New Jerseyans may find surprising the existence of underground chemical and liquefied petroleum-gas caverns in their state, the use of such structures is nothing new. Underground storage caverns have been in use for more than a half-century across the United States. The majority are in the Gulf Coast states and have been mined out of natural salt domes; the most notable being the U.S. government’s Strategic Petroleum Reserve. There are at least 70 hard-rock caverns, most of which are in the eastern states.
The five caverns at the Bayway Refinery were mined out of a shale/siltstone/sandstone formation and “consist of honeycombs of tunnels separated by large rock pillars to maintain overhead stability,” according to the New Jersey Geological and Water Survey. Each cavern is 15 feet wide by 18 feet high. In total, the five caverns can hold 29.61 million gallons of butane and propane. Gibbstown’s single, 7.81-million-gallon cavern is far beneath the ground — its floor ranges from 340 feet to 357 feet below the surface. It is carved out of gneiss, a solid metamorphic rock.
No leaks thus far
Underground storage caverns, including New Jersey’s, are unlined. In the Bayway Refinery caverns, pressure from the weight of the liquid prevents leaching out of the cavern walls, according to the Geological and Water Survey. The hard rock walls of the Gibbstown cavern have so far kept its stores of anhydrous ammonia and butane from leaching or leaking.
While the New Jersey caverns have never been implicated in groundwater contamination or experienced explosions, several serious incidents have occurred elsewhere in the United States. The closest occurred in 1978 in Marcus Hook, Pennsylvania — just across the river from Gibbstown — when an underground storage cavern leaked butane, causing five nearby homes to burn down. In California in 2015 and 2016, a 100-day methane and ethane leak from an underground storage cavern led to the evacuation of 8,300 homes and the sickening of many residents. The incident was the worst natural gas leak in U.S. history.
One reason there are so few caverns in New Jersey, Carluccio said, is that, until recently, there was never much need for storing such large quantities of liquid petroleum gas underground. But with the advent of hydraulic fracking and the surplus of natural gas from the Marcellus and Utica shale fields in Pennsylvania, companies in the region now have a glut of product, often with nowhere to immediately go.
“Pennsylvania went from being a modest gas producer, mainly producing coal and oil, for instance, to being the second-largest producer of natural gas in the United States,” said Carluccio. “But we’ve reached a point now in the United States where the consumption of gas and oil is going down, so right now a lot of it is still sitting in the ground.”
‘Given current market trends and international energy needs, underground storage caverns present a unique opportunity to serve as a driver of local and regional economic growth.’ — Attorney David Miller writing on behalf of Delaware River Partners LLC
Carluccio recalled attending a 2019 stakeholder meeting held by the DEP to determine interest levels in finally writing rules for the regulation of underground storage caverns. There were “a lot” of industry representatives at the meeting, she said, including some on behalf of Delaware River Partners LLC, owners of the Repauno Port & Rail Terminal, also known as the Gibbstown Logistics Center.
“We know that the Gibbstown Logistics Center — Delaware River Partners — wants to expand their cavern system,” Carluccio said. “So that could be one reason why (the DEP) all of a sudden has issued the rulemaking after doing nothing since 2019.”
A spokesperson for the DEP declined to comment because the department is currently reviewing comments from a virtual public hearing, held on June 9, concerning the proposed rules change.
While emails and calls to the Repauno Port & Rail Terminal went unanswered, NJ Spotlight News did receive, through an Open Public Records Act request, a copy of a public comment submitted on June 13 to the DEP by David Miller, an attorney for the law firm Giordano, Halleran & Cielsa, who was writing on behalf of Delaware River Partners LLC.
“The proposed Cavern Rules are the culmination of a considerable and concerted effort by Department staff and those in the regulated community to craft a protective and workable regulatory framework,” Miller wrote. “Given current market trends and international energy needs, underground storage caverns present a unique opportunity to serve as a driver of local and regional economic growth.”
Miller went on to underscore Delaware River Partners LLC’s position that the DEP should consider all liquefied petroleum gas (LPG) products “as a single regulated substance.”
One LPG rule fits all?
“As a result,” Miller wrote, “if geologic conditions are found to be suitable for one LPG product, that determination can be safely applied to all LPG products provided the cavern is designed to accommodate the maximum operating pressure for any LPG product.”
With such a growing need for oil and gas storage, Carluccio said, it is problematic that the department’s current definition of what products can be stored in the caverns — currently defined as “any natural or artificial gas, or any petroleum product or derivative of any petroleum product, with the exception of liquefied natural gas (LNG)” — is so broad.
“It could be a lot more than what you would think,” she said. “It says liquid petroleum gases and their derivatives. What does that exactly mean? It’s very vague. They don’t say what derivatives are.”
And while the proposed regulations would exclude liquefied natural gas from the list of products that can be stored in underground storage caverns — since it must be kept at minus 259 degrees Fahrenheit — the prohibition would not impact the construction of nearby LNG plants or export terminals. Fracked natural gas can still be pumped or transported from an underground storage cavern to a nearby facility and ultimately converted to LNG.
That highlights another consequence of expanding underground storage caverns. Many of New Jersey’s petrochemical plants are located in or adjacent to environmental-justice communities, including Bayway Refinery and Repauno Port & Rail Terminal.
Marcus Sibley, chairman of the New Jersey Progressive Equitable Energy Coalition, views the expansion of underground storage caverns as an affront to the state’s landmark Environmental Justice Law, which requires the DEP “to evaluate the environmental and public health impacts of certain facilities on overburdened communities when reviewing certain permit applications.”
In the current rules-change proposal, there is no mention of buffer zone requirements from environmentally sensitive areas, like wetlands, or vulnerable low-income, minority communities recognized by New Jersey’s Environmental Justice law — all of which directly abut or are adjacent to the Bayway Refinery and Repauno Port & Rail Terminal. (The proposed rules ask only that a potential cavern owner and operator prepare an environmental and health impact statement.)
‘Underground storage raises valid concerns among citizens, especially when storage is in densely populated areas like Linden or Gibbstown.’ — Kenneth Miller, Rutgers’ Department of Earth & Planetary Sciences
“On top of your normal Environmental Justice community issues with these projects, like increased traffic, increased diesel fumes, and increased noise pollution, now we have a potential for explosion,” said Sibley. “And that’s even more significant when you look at the volume of flammable gases that we’ll be dealing with.”
The environmental-justice law Gov. Phil Murphy signed in September 2020 is touted as the nation’s strongest. But the rules to apply the law are still not final; rules were published earlier this year ahead of a series of planned public meetings on them.
In his public comment to the DEP on the caverns rule, Miller noted: “There is a decades-long history of safe operation of underground storage caverns in New Jersey at Repauno and at (Bayway Refinery).”
Kenneth Miller, distinguished professor and graduate school program director at Rutgers’ Department of Earth & Planetary Sciences, agrees with Sibley and Carluccio that the fate of the proposed regulations need to be closely watched by residents of communities where the caverns are, or could be, located.
“Underground storage raises valid concerns among citizens, especially when storage is in densely populated areas like Linden or Gibbstown,” Kenneth Miller said in an email. “These concerns must be addressed before geological storage, whether fuels or waste carbon dioxide, is continued or implemented.”
Sibley said that the state, through its aggressive environmental justice and emissions reduction initiatives, “is understanding the necessity of being on the right side of history.” But, he continued, creating regulations that would pave the way for more underground storage caverns “is a contradictory message to your constituents and it causes confusion.”
“The impact — especially on low- and moderate-income communities that have already been impacted by environmental issues — is tremendous,” Martin Levin, a concerned South Jersey resident said at the June 9 public hearing on the rules change. “And so in the interest of equity, I believe that this permit should be denied.”
Both Sibley and Carluccio pointed out that the proposed rules would require any potential owner and operator of an underground storage cavern to hire a third-party evaluator “to independently review the feasibility study, cavern design, construction submittals, and process hazard analysis as part of the application process.”
That the third party must sign a conflict-of-interest statement and not accept employment by the cavern owner and operator for at least two years, Sibley and Carluccio said, does not go far enough.
Jobs versus environment?
Carluccio argues that the employment clause should be in line with federal rules, which require third parties to not be employed for at least five years or more, and that third parties should also have never been employed by the owner and operator of a proposed underground storage cavern.
Sibley’s concern is access to information for both activists like him and the vulnerable communities he represents.
“With a third party, that means we can’t OPRA them,” he said, referring to the state’s Open Public Records Act, which allows the public to request government reports and other information on projects evaluated by state agencies. Private companies’ independent evaluations are not obtainable. “There are far too many things that we have concrete examples of how things have gone wrong when we didn’t have adequate oversight, we didn’t have specific language, we didn’t have adequate community engagement. We’ve seen this movie too many times to not change the process.”
While the argument remains that facilities like the Repauno Port & Rail Terminal provide jobs and, with expansion, the potential for the creation of even more, Sibley argues it is the wrong kind of employment for a state interested in improving the environment for all its residents.
“There will always be an argument for how something can make money, and we’re not anti-commerce, we’re not anti-profit,” Sibley said, speaking for himself and the New Jersey Progressive Equitable Energy Coalition. “But the way we’ve been making money has literally been killing people. And we know — we know — there are other, more sustainable, ecologically friendly projects that can be worked on that can generate income but also can preserve the health of the citizens. That’s what we should be focusing on.”
— Graphic showing location of underground storage caverns in relation to environmental justice communities by Genesis Obando