READING, NY (WENY) – Plans to store liquid petroleum gas in underground salt caverns near Seneca Lake were dealt a blow Thursday.

The New York State Department of Environmental Conservation Commissioner, Basil Seggos, denied the application for an Underground Gas Permit for Finger Lakes LPG Storage, LLC; a subsidiary of Crestwood Equity Partners.

Finger Lakes LPG was seeking state approval to store up to 1.5 million barrels of propane in the vacant salt caverns in the town of Reading, in Schuyler County. According to Crestwood executives, the location for the underground storage is ideal, given the site is situated adjacent to an existing LPG pipeline.

Crestwood owns and operates a similar facility in Savona in Steuben County, where LPG and butane are brought in by truck and rail, and stored in underground caverns.

In his decision issued July 12th, Commissioner Seggos cited a letter by the applicant in May 2018, where Finger Lakes LPG acknowledged it planed to perform pressure testing after recent development of a well discovered “potential communication” with nearby wells. Pressure testing is done to help determine the integrity of the caverns and determine their suitability for gas storage.

The May 2017 letter requested Commissioner Seggos hold off on any decision on pending appeals until the results of the pressure testing were reported to the DEC.

Just this week, the Schuyler County legislature voted unanimously to rescind its support for the project, citing the May 2017 letter as cause for concern.

Finger Lakes LPG changed the scope of its plans from its original application. In 2016, the company modified its application, removing plans to store butane, as well as build a rail car siding, and haul gases in and out of the facility via truck.

Seggos also cites the “community character” of the surrounding area, which includes a the physical and economic character of the region, which includes a multi-billion dollar wine, beer and tourism industry. Many surrounding businesses, communities, neighboring counties and environmental groups have publicly opposed the project, attributing not just safety and environmental concerns, but how the project could have potential negative economic impacts.

The application denial by Commissioner Seggos goes on to state “Although I am denying the permit applications at this time and on this record based on adverse impacts on community character, my review of the record indicates that, absent the denial on SEQRA grounds, several issues would otherwise require adjudication.” Those issues include impacts on land, water resources, noise, traffic and transportation, and public safety, among others.

In a 2017 interview with WENY, Crestwood executives say they understand those concerns. The company says it has made investments into local groups and organization, and works directly with local emergency responders to be prepared in the event of any type of incident.

The LPG storage proposal has been under review by the NYS DEC for several years. In 2015, the state held an issues conference, and the matter was under review by Administrative Law Judge James McCLymonds, who issued a 75-page ruling in September 2017.

In his conclusion, DEC Commissioner Seggos states he gives weight to environmental considerations, as well as social, economic and other essential considerations, and cites several other cases regarding SEQRA requirements.

Based on past related projects under SEQRA, as well as other concerns, Seggos says “The project before me involves significant adverse unmitigated impacts with respect to local and regional community character in this area of New York State. Based on my review of the record and final supplemental environmental impact statement in this matter, it is clear that this project is not permittable.”

Seggos goes onto say even if the issues regarding cavern integrity, public safety preparedness, alternative sites and the bring pond were adjudicated with a favorable outcome, he would still not be able to issue a SEQRA findings statement in support of the proposed project on community character grounds, and is therefore denying the permit applications.

WENY News reached out to Crestwood for comment; we have not received a response as of Thursday evening.