UARB submission raises safety concerns about Alton Gas project

A retired geologist who worked for the province of Nova Scotia as well as the mining giant INCO says he has safety concerns about the proposed Alton Natural Gas Storage Project.

Robert Grantham’s letter to the Utility and Review Board (UARB) states not enough information has been made public about the rock formation near Alton where underground salt caverns will be hollowed out to store natural gas. Grantham is worried about potential gas leaks. The company proposes hollowing out two caverns — each with a diameter of 60-70 metres — to store a winter’s worth of natural gas about 800 metres undergound.

Alton is owned by AltaGas headquartered in Alberta; it is also the parent company of Heritage Gas, the natural gas distribution company in this province. Grantham lives in Stewiacke not far from the proposed development the Utility and Review Board approved in 2013 and which Alton Natural Gas is requesting a five-year extension to complete.

In its filing to the UARB last Friday, the company states 2022 will be the new in-service date and that it has spent $70 million so far, the first instalment of a total $130 million project price tag*.

Construction has stalled for the past two years during which local residents protested the potential impact on their wells and court challenges arose from the neighbouring Sipek’natik First Nation concerned about the impact on fish from flushing brine from the proposed salt caverns into the Shubenacadie River.

Are the caverns safe?

“I am neither in favour nor against the proposed development of a gas storage facility in Alton,” writes Grantham in a letter to the UARB, the regulator for natural gas storage in Nova Scotia. “I am whole heartedly in favour of it being done right and according to all accepted professional procedures. The project potentially poses a threat to safety. The geological formations drilled do not permit immediate acceptance for the development of a storage cavern.”

Grantham goes on to say he was concerned the regulator issued the original Approval to Construct in 2013 based on just one hole drilled by Alton in 2006. Geologists with the province’s Natural Resources department were not provided with that data. Grantham says a minimum of three wells are required to determine the underlying geology of a formation.

The same conclusion was reached by the engineering company the Utility and Review Board hired as its independent expert and “Certifying Authority” to interpret the results of the first hole Alton drilled back in 2006. BGC Engineering Inc. told the regulator although there wasn’t enough information to approve a specific design for the storage caverns, Alton had enough evidence to warrant further drilling, so that BCG could analyze the additional results. In 2013, the UARB approved the Alton project, attaching 13 conditions and 28 compliance milestones, including the drilling of more holes for stress testing.

In 2014-2015, Alton drilled two additional wells and forwarded the results to BCG. But BCG’s review of the additional data has not been made public.

A spokesperson for the UARB says that in early 2018 BGC Engineering “withdrew from the Project because of retirements.” The regulator is in the process of hiring another expert. UARB executive director Paul Allen says this change will not affect the ability of the Board to grant an extension because any future cavern construction is still dependent on the review of Alton’s compliance by the next Certifying Authority.

This is essentially the same point Alton Natural Gas made Friday in its response to safety concerns.

“Alton submits the Extension Request should not necessitate a wholesale reevaluation of the safety of the cavern development as that evaluation has already been performed by the Board with the assistance of the Certifying Authority (CA). Moreover, the safety of the cavern development is subject to the ongoing regulatory oversight of the NSUARB and its CA as a result of the detailed conditions included in the Board’s original Approval to Construct, which Alton is not proposing to alter.”

The UARB has received three letters in support of Alton’s request. One is from Ray Ritcey, the CEO of the Maritimes Energy Association representing 70 companies who work in both fossil fuel and renewable energy businesses. Nova Scotia sits at the end of a single pipeline. The purpose behind the proposed storage caverns is to fill them with natural gas during the summer when the price is low and withdraw gas during the winter when the price is high.  Savings of $17 million a year were  projected when the project was proposed over a decade ago.

“An underground natural gas storage facility will help stabilize natural gas costs year-round for thousands of businesses and homes in Nova Scotia and across the Maritimes and beyond, including many of the province’s largest employers as well as major public institutions (hospitals, schools, universities & government buildings),” says Ritcey.

Ritcey compares the caverns to “a battery” and notes Alberta has been storing gas undergound for 50 years. With natural gas no longer being produced offshore at Sable Island and Deep Panuke, Ritcey notes that “storage will play an ever more critical role” in maintaining supply and keeping fuel prices stable.

Alton has made one key change in its proposal since the Project was greenlighted in 2013. Instead of developing three caverns where three wells have been drilled, Alton now says it will develop only two. Senior communications advisor Lori MacLean said two are enough to meet the requirements of its only customer, Heritage Gas. In its filing to the UARB Friday, company president Tim Church suggested the change was made to ease concerns raised by the Project’s nearest neighbours.

“Some letters of comment raised concerns about the proximity of the cavern locations to residential homes. Alton will not utilize the well that is close to the edge of the property, closest to the Brentwood Road and residents, for cavern development. As such, cavern wells will now be developed further (sic) away from residents on the Brentwood Road than was previously planned by Alton. Any well that will not be used will be properly decommissioned according to regulatory requirements and industry best practices.”

Larry Harrison, the MLA for Colchester-Musquodoboit Valley, had also asked the UARB for an independent study of the safety of the project.

Although it’s not the regulator, Nova Scotia Department of Energy and Mines spokesperson JoAnn Alberstat says geologists with the province did see the “logs” from the wells drilled in 2014-2015 as required by regulations in the company’s lease.  Bob Grantham told the Halifax Examiner that although he’s relieved to learn someone other than the proponent has viewed the data from the three holes, he still has concerns about the suitability of the area to store natural gas securely.

“In speaking with an Alton company geologist at the site several years ago, I was informed that they were drilling in a half-graben structure containing a “pillow” of salt. That concerned me. Half grabens are bounded by a fault (breaks in the rock formations caused by ancient earthquakes) on one side. That makes for a potentially high risk of leakage.

“I received a call from a vice-president of Alton Gas on September 28, 2016. During the call, I was informed that the proposed caverns would be pressure tested before any storage of high pressure gas would take place. I also was told that there were layers of dolomite (similar to limestone) in the drill holes. If the dolomite is interspersed with the salt, then a tight seal may not be possible and the developed caverns would fail the pressure testing.”

The reply evidence from Alton states the Maritimes is a “low risk” earthquake zone and “there are no dolomites” in the Stewiacke salt formation. The company did not respond to a direct question from the Examiner about whether salt deposits in the three wells are continuous or interrupted.

The 2013 report from the Board’s experts flagged anhydrite, a gypsum-like mineral, often present as part of salt deposits that needed more study.

“Subsequent borehole drilling, sampling and laboratory testing, and modeling analysis must focus on carefully characterizing the anhydrite layer material and evaluating its impact on cavern development/evolution and performance,”said the BGC report.

“If the Alton caverns fail the pressure test, that would result in the loss of the entire project and make the proposed dumping of salt into the Shubenacadie River completely unnecessary,” continues Robert Grantham.

Even though the UARB has no authority when it comes to environmental concerns, it still received dozens of  letters  from people arguing the project  should not proceed because the company has not complied with a condition of an approval from the provincial Environment minister in 2016 to allow the hollowing salt caverns and discharge of brine into the Shubenacadie River. Alton takes issue with that in its submission to the UARB.

“Several of the letters incorrectly assert that Alton is not in compliance with the “Fish and Fish Habitat” sections of its provincial Environment Assessment… Alton must be in compliance with all federal, provincial and local requirements… in particular, DFO has said that as designed, the Project is not likely to contravene the fish habitat protection provisions of the Fisheries Act, or the Species At Risk Act.”

Alton says the brine from the caverns will mirror the salt content of the river and will not be flushed during  low tide nor spawning periods for striped bass.

Environment Department takes no position

Dalhousie University student Danielle Stewart urges the UARB to reject the Project extension for other reasons.

“As the IPCC (Intergovernmental Panel on Climate Change) has told us, we are on route to a 3 degree rise in temperature worldwide by the year 2100, unless we work within the next 12 years to make drastic changes. The report makes it clear that rather than expanding fossil fuel infrastructure, we should transition to renewable energy sources at unprecedented speed.”

Stewart also writess “The project would take place on unceded, unsurrendered Mi’kmaq territory, and the company has failed to adequately consult with local First Nations groups”.

In 2017, the neighbouring Sipekne’katik First Nation at Indian Brook convinced Justice Suzanne Hood to quash the Environment Minister’s decision to deny its appeal to proceed with the brining of caverns. The judge said the decision was “procedurally unfair” to the First Nation because it had not seen a report the province used to inform its decision. A spokesperson with the Environment Department says the Warner Report has been available to Sipekne’katik.

Today, a full year after that court decision, Environment Minister Margaret Miller has provided no explanation for why she has neither supported nor rejected the First Nation’s appeal. Alton Natural Gas argues what happens on that front has no bearing on the UARB’s decision with respect to whether natural gas can be safely stored undergound. The company says it is open to  negotiate agreements with the Mi’kmaq around safety, environmental protection, and economic benefits connected with the proposed development.

* the originally published version of this article mischaracterized the price of the project.