SALAMANCA, N.Y. — The New York State Office of Parks, Recreation and Historic Preservation held a public information meeting Monday night on a lease renewal to continue natural gas storage operations in Allegany State Park with National Fuel Gas Supply Corp.
Under the terms of the proposed renewal, National Fuel Gas (NFG) will continue operating its existing underground natural gas storage facility within Allegany State Park, known as the Limestone Storage Field, for 15 years.
“The reason we are here tonight is to educate the public on this new lease with National Fuel Gas. We have reached an agreement to move forward with operations for the next 15 years but with some significant changes from the previous lease,” said Thomas Alworth, deputy commissioner for national resources for the New York State Office of Parks, Recreation and Historic Preservation (OPRHP).
The proposal would authorize National Fuel to maintain and operate existing storage wells, roads and pipelines associated with the storage field but would limit National Fuel’s activities on the surface of Allegany State Park to the footprint of existing wells and facilities.
“First and foremost, under the terms, National Fuel Gas’ footprint in the park will never expand. The operations are somewhat grandfathered in as it is, but cannot change,” said Alworth. “That was an important part in terms of protecting any further impact to the park.”
The previous 50-year lease expired in June 2014. OPRHP and NFG entered into a one-year extension that runs through June, to enable the parties to negotiate a long-term lease renewal. Initially, NFG pressed for an increase in gas storage capacity and expansion of the well field.
“National Fuel Gas wanted to maintain the opportunity to at least explore expanding their surface footprint and we would not go there,” said Alworth. “That took some time to work out including payments and gas agreements. A lot has changed in 50 years.”
As per the new agreement, OPRHP will receive nearly twice the amount of free gas to be supplied to Allegany State Park as well as an increased payment for use of the storage facility — approximately $84,000 annually. Park officials have not yet determined how additional park revenue will be spent.
National Fuel Gas will also be reducing its underground storage capacity by more than 1,000 acres.
The Limestone Storage Field has been operated in the park since 1964 under a lease, originally issued by New York State to the Felmont Oil Company and acquired by National Fuel in 1990.
The storage field currently contains 14 storage wells which provide gas service to several Western New York counties and largely serves the Olean area. Gas is pumped into the underground storage during warm weather months, and extracted as needed during cold winter months.
Alworth said that OPRHP acknowledged the vital services provided to the area as well as the potential implications of NFG pulling out operations entirely.
“If (NFG) were to leave there are impacts to them pulling out their infrastructure as well. There are impacts to the park in that way as well,” he said. “We think the status quo of the agreement is a good outcome all around and it continues to provide the community with a fuel source that they need.”
The New York State Office of Parks, Recreation and Historic Preservation will be accepting public comments on the proposed lease agreement until March 31. Those interested in submitting comments may do so by emailing alleganylease@parks.ny.gov.
