Murphy DEP Fossil “Cavern” Storage Rules Linked To Proposed Delaware River LNG Export Project

Posted on August 15, 2022 by Bill Wolfe

Fortress Energy LNG Export Lawyers Playing The Inside DEP Regulatory Game

Climate and Environmental Justice Advocates Are Duped

The Public Will Be Shocked To Learn Of These DEP Policies

Exactly three (3) months ago, we warned about proposed Murphy DEP regulations that would promote the expansion of underground storage of fossil fuels in “caverns”, see:

Today, better late than never, NJ Spotlight wrote about those DEP proposed rules, and they didn’t pull any punches with the headline, see:

The Spotlight story starts off on the wrong foot, seemingly falling into exactly the trap we warned about:

I suspect that DEP will spin these rules as updating or modernizing outdated permits or regulations based on an ancient 1951 law. DEP will use the LNG restriction to obfuscate and divert.

But make no mistake, just the opposite is the case: in fact, the proposed rules effectively promote expansion of fossil infrastructure, protect existing permits, and continue a dangerous practice that should be banned.

But the the rest of the content of the story – although missing the point on some big issues (see below) – is unusually good as well.

I) Documenting Fossil Industry Influence

To their credit, NJ Spotlight reporter Andrew Lewis did his homework – real journalism instead of the typical he said/she said crap.

Mr. Lewis filed an OPRA request for the public comments on the DEP rule proposal. That provides the actual industry position, not the spin from their press releases and media people.

Just as we warned, Lewis was able to document that Fortress Energy, the corporation proposing the Delaware River LNG export facility in Gibbstown, is playing the DEP regulatory game behind the scenes.

Lewis absolutely nails it with this quote, that connects all the dots. BOOM!

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.”

 Let’s break that down to emphasize what it really means:

1. “The proposed Cavern Rules are the culmination of a considerable and concerted effort by Department staff and those in the regulated community”

This exposes what is known as “regulatory capture”. The Fortress Energy lawyers are so smug and arrogant that they openly brag about their undue and corrupt influence on DEP regulators.

These are the kind of stunning admissions journalists can expose when they do real work and get inside the DEP game. Bravo!

2. “to craft a protective and workable regulatory framework”

Once again, we get an open admission that the DEP regulators are working to craft a regulatory framework that “works” for the industry.

Worse, this phrase can be interpreted – often accurately – that the DEP regulatory framework is designed to protect the industry and provide “regulatory certainty” that is necessary for private investment.

3. “as a single regulated substance.”

A single regulatory substance would mean that the rules would promote expansion of storage  “for any LPG product”, which means fracked gas and LNG export.

Just as we warned:

Don’t be fooled by the exclusion of storage of LNG. The DEP proposal would allow underground storage of fracked natural gas, which can easily be converted to LNG for export.

This means that DEP regulations will promote LNG export, just as the lawyers for the Fortress Energy LNG export project advocated.

While NJ Spotlight reports this concern, they do not fully emphasize the significance:

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.

II) Some Serious Omissions And Distortions On Climate and Environmental Justice

That’s all the good reporting, but unfortunately, the NJ Spotlight story misses the mark on climate and environmental justice issues, largely do to reliance on sources that just don’t know what they are talking about.

Here’s the worst:

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.”

This is not the first egregious error by Mr. Sibley, and they are not honest mistakes.

The “landmark environmental justice law” he’s been cheerleading for does not apply to DEP cavern regulations or to the DEP permits DEP will issue to caverns pursuant to the propose regulations (if they are adopted).

That EJ law is riddled with loopholes and technical flaws, as I’ve written about numerous times so won’t go into here.

To his credit, Sibley correctly blasts the privatization aspects of the DEP proposal as well as the potential risks to EJ communities (but with respect to climate, not so much).

The Spotlight story also goes very easy on Delaware Riverkeeper.

As we wrote, Riverkeeper actually supported the DEP proposal of regulations:

The folks at Delaware Riverkeeper played the inside DEP game and got duped. DRN actually supported the development of regulations, instead of just opposing the need for this practice and seeking decommissioning of existing caverns and a ban on expansion or promotion of new fossil infrastructure. Remarkably, they did this despite noting that the Gibbstown LNG project was seeking expansion of the current cavern capacity of 186,000 barrels to 3 million barrels! 

Riverkeeper now looks like they blew the whistle on this, while they failed to do that and instead played the inside DEP stakeholder game. AS a result, the public, who will strongly oppose this insanity, has been in the dark until today.

III) Finally, there are some large gaps in the story, including:

1) Failure to report that the: a) Gov.’s Executive Orders on climate and energy; b) the Global Warming Response Act; c) the current DEP regulations; d) the DEP cavern regulatory proposal; e) the environmental justice statute; and f) the DEP’s proposed environmental justice regulations ALL DO NOT APPLY TO THE DEP CAVERN REGULATORY PROPOSAL OR TO THE DEP PERMITS DEP WILL ISSUE PURSUANT TO THE PROPOSAL (if it is adopted).

This goes for the environmental impact assessment provisions in the DEP proposed cavern rule.

Do I make myself clear?

Mr. Sibley and Delaware Riverkeeper surely must know this. So why don’t they warn the public about it and pressure the Governor and DEP to close these loopholes?

2) failure to report the current DEP Commissioner’s prior legal work for Fortress Energy in securing DEP permits and his ethics recusal (Spotlight previously reported on that, based on our disclosures, bu with no attribution or link to Wolfenotes:

LaTourette’s [recusal] memo lists the matters before the DEP that he worked on while he was an environmental attorney with a Newark law firm immediately before joining DEP in September 2018. Those matters include the Repauno Port and Rail Terminal, a project on which he represented Delaware River Partners on “all remediation and permitting concerns” before the DEP, the Delaware River Basin Commission (DRBC) and two federal agencies, according to the document, which was obtained via an Open Records Act request filed by Bill Wolfe, a former DEP employee.

3) failure to report the special treatment and unusual regulatory approvals that the Fortress LNG project has benefited from. For example, just days ago, we wrote about the most recent one of them:

4) failure to report on the direct related energy policy and fossil infrastructure issues, and the role of gas infrastructure.

5) Lewis downplayed the California Aliso Canyon disaster we highlighted.

6) The long delay in reporting this May story and the fact that NJ Spotlight filed OPRA request to get the DEP regulatory source documents suggests the power of the fossil industry. Spotlight had to make their reporting bullet proof, largely because they likely feared the consequences of pushback from fossil.

We’ll keep you posted.

[End Note: I like to avoid race based and divisive arguments, but I should note that a reader just emailed me to note that I missed an important flaw in the EJ law. The definition of an EJ community ignores poor and working class white communities, he writes:

Gibbstown is not an EJ community- even though it has lots of industry super fund sites recra sites – it doesn’t not have enough minorities or people that speak other languages -Short Hills ,Alpine West Windsor are but working class white communities are not

Wow.

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