Drilling Permits Cancelled For Underground Natural Gas Storage Project

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MONROE COUNTY, Ohio (OVR) — Ohio environmental regulators have canceled key permits needed for an underground natural gas liquids storage facility proposed along the Ohio River.

Gas infrastructure is common in Panther Wildlife Management Area.
Gas infrastructure in Panther Wildlife Management Area. [Benny Becker | Ohio Valley ReSource]
According to an order from the Ohio Department of Natural Resources, permits to drill three three Class III solution mining wells in Monroe County, Ohio were cancelled on Sept. 21. Cancellation was requested by Powhatan Salt Company LCC. The proposed wells are associated with the Mountaineer NGL Storage project, a multi-million dollar underground natural gas liquids storage project.

Experts say natural gas liquid storage — like the proposed Mountaineer project — is crucial to building out the Ohio Valley’s petrochemical industry.

In July, Mountaineer finalized an agreement with the developers of a proposed petrochemical plant in nearby Belmont County, Ohio. The plant would use natural gas liquid ethane to produce the feedstock for plastics and chemicals. Earlier in July, one of the plant’s investors pulled out of the project. Last week, the plant’s developers signed a contract with gas supplier Range Resources to provide the yet-to-be-built plant with ethane feedstock.

A coalition of environmental groups challenged Powhatan’s drilling permits arguing ODNR did not follow proper administrative procedure before issuing them.

The groups include Concerned Ohio River Residents, FreshWater Accountability Project, Buckeye Environmental Network, Ohio Valley Environmental Coalition and the Sierra Club.

In a statement, Tom Sanzillo, director of finance at the Institute for Energy Economics and Financial Analysis, a left-leaning energy think tank, characterized the request by Powhatan to cancel the permits as a signal the project may be in jeopardy.

“This is a solid market signal that plans for a petrochemical buildout in Ohio and western Pennsylvania are on shaky ground,” he said. “Local and state economic development officials would serve the public better by looking for jobs and taxes in other areas of the economy that are actually profitable and growing and can be good neighbors to the communities that host them.”

According to the ODNR order, the company can reapply for the permits.