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RCA refuses to change CINGSA decision Inlet Entities want stipulations that address their concerns about gas storage leaks; commission upholds certificate decision Alan Bailey Petroleum News
The Regulatory Commission of Alaska has denied a petition by Inlet Entities to modify the terms under which on Jan. 9 the commission approved a certificate of public convenience and necessity for Cook Inlet Natural Gas Storage Alaska’s planned gas storage facility on the Kenai Peninsula. CINGSA is trying to fast track the development of its facility to head off projected shortfalls in utility gas deliveries during the winter of 2012-13.
In hearings in both RCA and the Alaska Oil and Gas Conservation Commission, Kenai Peninsula businessman Vincent Goddard has consistently argued that CINGSA has not taken adequate account of the possibility of gas leakages from its planned storage reservoir in the Cannery Loop gas field on the south side of the city of Kenai. Goddard owns two fish processing businesses with facilities on land directly over the planned gas storage reservoir. Goddard and his companies, collectively referred to in CINGSA hearings as Inlet Entities, want CINGSA to remediate some old gas wells that penetrate the planned reservoir and have expressed particular concern about the potential of gas leakage through one well, the KU 13-8 well, that surfaces within property leased by Goddard.
At the hearings, CINGSA has presented data from the Cannery Loop field that, CINGSA says, demonstrate that there are no leakage points from the proposed storage reservoir.
AOGCC permit In November AOGCC, the state agency with prime responsibility for regulatory oversight of the integrity of gas storage reservoirs, granted CINGSA a permit to inject gas into its reservoir. AOGCC said that CINGSA’s testimony regarding the integrity of the reservoir was more credible than that presented by Inlet Entities. However, the commission does require CINGSA to place a gas detection and alarm system in buildings near the KU 13-8 well.
Inlet Entities have argued that the reservoir integrity question is pertinent to RCA certification of CINGSA’s facility, in that a lack of reservoir integrity would undermine the successful operation of the storage facility, in particular causing the facility’s customers to lose gas. Following the issuance of the CINGSA certificate, Inlet Entities petitioned RCA to add stipulations requiring inspection or remediation of the KU 13-8 well, or alternatively requiring CINGSA to provide Inlet Entities with daily data regarding the storage facility operation and requiring periodic soil testing on land above the reservoir, to monitor for any escaping gas.
Majority decision In a majority decision, the RCA commissioners rejected the Inlet Entities request.
“We conclude that the Inlet Entities have not demonstrated that our decision … was unreasonable, erroneous, unlawful or otherwise defective,” the commission said in a March 17 order. “Therefore, we deny the petition for consideration.”
In a minority dissenting statement, Commissioner Janis Wilson said that, although she would deny Inlet Entities’ request for remediation or inspection of the KU 13-8 well, preferring instead to defer to AOGCC expertise, she would grant requests for soil testing and the disclosure of reservoir pressure data.
“AOGCC is not accustomed to considering ratepayer interests in public gas storage facilities,” Wilson said. “We have the responsibility to protect ratepayer interests and ensure that utilities maintain safe service and facilities.”
In its response to the Inlet Entities petition, CINGSA had told RCA that the petition “simply reiterates requests for relief that have been made, without success, before both the commission and the Alaska Oil and Gas Conservation Commission.”
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