The Potential for Underground Storage of Natural Gas Liquids in Salt-Solution Mined Caverns in the Appalachian Basin Area

February 20, 2020

Initial development of underground storage of natural gas liquids (NGLs) and other “light hydrocarbons” began in the United States in the 1950s. By the 1960s and 1970s a number of underground storage projects had been developed across the United States that utilized both mined out rock caverns and salt-solution mined caverns in bedded and dome salt deposits. Development of underground storage in hard rock and solution-mined caverns the Appalachian Basin began in the late 1950s, with most of the storage cavern development occurring in the 1960s and early 1970s. NGLs stored in these caverns typically included: Propane, Butane, Ethane, Isobutane, and Propylene.

With the rapid development of the Marcellus and Utica-Point Pleasant unconventional shale plays since 2007 and the delineation of significant “Wet Gas” areas within the plays, NGLs (such as Ethane, Butane, Propane, Isobutane, and Pentane) have become an increasing important part of the production of oil and natural gas in these plays. The northeastern region of the United States has not been a large producer of raw-mix NGLS, producing only about 41,000 barrels per day (bpd) in 2010, but that production was expected to reach around 680,000 bpd by the end of 2018 and possibly as high as 1.1 million bpd by the end of 2019, with the continued Marcellus and Utica production and development of the midstream infrastructure.

Since NGLs are not liquid at standard temperature and pressure, injection and storage of NGLs are not regulated under the Underground Injection Control (UIC) Program. Regulatory authority for underground storage of NGLs across the states within the Appalachian Basin vary considerably from very limited regulatory authority to actual specific storage regulations that are in place in the state of New York. Development of solution-mined caverns in salt in this area will initially require Class III permits from either the primacy states or from direct implementation by U.S. EPA. Additionally, the brine produced during the cavern creation can be considered an industrial waste by U.S. EPA and require disposal into Class I non-hazardous injection wells. However, once the facility goes into storage operation, UIC regulations no longer apply, but state specific regulatory authority may have oversight.

Bedded salt deposits within the Appalachian Basin occur within the Silurian-aged Salina Group, with salt occurring predominantly in the F, D, and B units within the Salina. Depths of these salt beds can range from a little over 1,200 feet below the surface in New York to over 6,000 feet in depth in West Virginia. Aggregate salt thickness ranges from over 200 feet in Ohio to more than 500 feet in western New York. Currently, there is underground storage of NGLs in salt caverns in New York and Ohio and one ongoing pending application for storage in New York.

With the continued development of Marcellus and Utica upstream and midstream projects in the Appalachian Basin, the need for the underground storage of NGL products will be in demand. With the recent closing of the Todhunter Storage Facility in Middletown, Ohio in 2014, the region has lost 500,000 barrels of NGL storage capacity. Underground storage of NGLs in salt caverns in the Appalachian Basin will continue to play an important role in unconventional shale development.

Mr. Tomastik is the chief geologist and regulatory specialist for ALL Consulting, based out of Tulsa, Oklahoma. He is a certified petroleum geologist with over 37 years of diverse expertise and experience in the energy sector, government, and consulting in California, Louisiana, New Mexico, Ohio, Oklahoma, Pennsylvania, Texas, and West Virginia. He previously served as Lead Geologist in the UIC Program for the Ohio Department of Natural Resources for approximately 25 1/2 years and was a member of the National UIC Technical Work Group. He has been involved in the planning, drilling, permitting and development of oil and gas and Class II saltwater disposal wells, Class I permitting and feasibility studies, injection well audits, stray gas investigations, groundwater contamination investigation cases, underground gas storage, induced seismicity, seismic monitoring and installation, and expert witness testimony. During his career, Mr. Tomastik also has been involved with oversight of the permitting, drilling, conversion, and completion of numerous injection wells, which included all aspects of the permitting process, AFE development and contractor coordination, drilling, cementing, geophysical logging, acidizing, mechanical integrity testing, injectivity testing, and well workovers.