It must be clearly understood that, while I am a member of the Federal Coal Mine Safety Board of Review, the views I express in this letter are my own and not those of the Board or the coal industry. Sincerely yours, EDWIN R. PRICE. BETHLEHEM STEEL CO., INC., ROBERT D. L'HEUREUX, Esq., Counsel, Subcommittee on Business and Consumer Interests, Washington, D. C. DEAR MR. L'HEUREUX: I returned to my office only yesterday from the trip to California, which I mentioned to you at the conference on April 9 I had in mind, and it is for that reason that I have not heretofore acknowledged the receipt of your letter of April 27, 1954, with which you enclosed a copy of a proposed amendment to S. 525. The proposed amendment, in the form in which it was enclosed with your letter, seems to me to be satisfactory. It does not seem to me that any fewer restrictions on the exercise of the right of eminent domain in connection with the underground storage of natural gas than are contained in the proposed amendment would properly safeguard the lives of men working in underground mines or the property interests of the owners and operators of those mines. I thank you for having given me an opportunity to see the draft of the proposed amendment. The matter is one in which we are vitally interested and I hope that you will keep me advised of any significant developments. Very truly yours, B. D. BROEK ER, Assistant to Vice President EQUITABLE GAS CO., Pittsburgh, Pa., May 21, 1954. Re Comments on testimony submitted before Subcommittee on Business and Consumer Interests of the United States Senate Committee on Interstate and Foreign Commerce, held March 3 and April 2, 1954, in connection with S 595 COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, Subcommittee No. 6 on Business and Consumer Interests, United States Senate, Washington, D. C. GENTLEMEN: I am submitting the following comments in my capacity as vice president and general manager of Equitable Gas Co., a Pennsylvania corporation, whose principal office is located at 420 Boulevard of the Allies, Pittsburgh 19, Pa. During the past 27 years I have held various engineering, supervisory, and official positions with Equitable Gas Co. and its subsidiaries. During the year 1930, I began the first intensive study of underground gas storage in respect to our company and was intimately connected with our storage operations which were started in 1934. Other locations were investigated and operations begun in succeeding years. During the period 1945-52, I was vice president and general manager of Kentucky West Virginia Gas Co., presently a wholly owned subsidiary of Equitable Gas Co. This company, principally a gas-producing company operating exclusively within the Commonwealth of Kentucky, owns and operates more than 1,400 gas wells and drills about 90 new gas wells per year. I have held my present position since 1952. I have been a registered professional engineer in Pennsylvania since July 1941. Equitable Gas Co. is engaged in the purchase, production, transmission, storage, distribution, and sale of natural gas, serving a territory embracing approximately 225 communities in western Pennsylvania and northern West Virginia, including principally, the city of Pittsburgh and surrounding municipalities in Allegheny County, Pa. Our company serves an area containing a population of 1,768,000 according to the 1950 census and approximately 55 percent of all residential and commercial natural-gas consumers in Allegheny County rely on our service. The company is a public utility subject to the jurisdiction of the Pennsylvania Public Utility Commission with respect principally to rates, service, and facili47560-54 -8 ties; the company is also subject to the jurisdiction of the West Virginia Public Service Commission. As a natural-gas company it is subject to the jurisdiction of the Federal Power Commission with respect to rates applicable to sales in interstate commerce for resale; extension and abandonment of facilities; obtaining certificates of public convenience and necessity for the construction, acquisition or operation of facilities including the certification of underground storage pools. Since as early as 1934, the company has been developing and expanding its underground gas storage facilities and by the start of the 1953-54 heating season had in storage approximately 26,200,000,000 cubic feet with a maximum daily delivery capacity from storage of about 466,000,000 cubic feet. We believe that the development of our underground storage has been a most important factor in enabling the company to meet rising demands of its customers for gas for space heating. At the present time we have 11 pools in operation, 7 of them being located in Pennsylvania and the remaining 4 in West Virginia. We are developing another pool in West Virginia and expect to place it in operation within the next few months. That is a very brief résumé of our company's business but should point out why we are very much interested in the proposed amendment to S. 525, a bill entitled "To amend Section 7 (h) of the Natural Gas Act." With each year we see more clearly the importance to us of underground storage. For instance, from December 31, 1946, until December 31, 1953 the number of customers using only gas for space-heating requirements increased from approximately 51,370 to 162,924 and this increase would have been greater had the company had sufficient gas to enable it to approve all applications for the use of gas for space heating, but conversely, would have been impossible without the underground storage pools. There are many reasons why our industry is interested in such legislation. The natural gas industry has been described as the "fast-growing industry" in the Nation. During the past 11 years, more than 10 million customers have added to the service lines of natural gas companies. Thus, its growth has provided one of the outstanding contributions to this country's individual expansion and has added considerably to America's wealth. A clean, economical fuel has been brought to every section of the country for a variety of uses in homes, stores, institutions, and industries. The speed with which this gift of God has been made available to the public, has been exceeded only by the overwhelming public demand for this fuel. Naturally, much of this public demand comes from urban communities whose residents want natural gas for space-heating use, which to a large extent means that the product is used on a seasonal basis rather than an annual one. Accordingly, like any other product for which there is a high seasonal demand, natural gas must be stored during the slack season in order that it may be adequately supplied during the peak season. Gas must be provided where it is needed when it is needed. Underground storage of gas provided the answer to this mandate. Actually, the idea of underground storage of gas is not a new or novel proposition and in the Appalachian area where gas has been produced during the past 70 years, it used to be the practice for the gas company to shut in some of its producing wells during off-peak periods and not turn them in until the demands usually reached during cold winter days called for additional gas and then these "shut in" wells would be turned into line. Following World War II, the demand for natural gas accelerated at such a rapid rate that the supply from the Appalachian field was inadequate to meet the increased demand and the only practical and economic solution ws increased use of the underground storage pool. As a matter of fact no forseeable supply from the Appalachian fields would be anywhere near adequate to meet the increased demand for natural gas today. Thus, there has been increased reliance or dependence upon natural gas produced in midcontinent States like Texas, Oklahoma, Kansas, and Louisiana. While you might logically ask, "Can't you arrange for the Southwest gas producers to store it in the States in which it is produced," you would run headlong into the transportation problem, which has definite limitations as to capacity and cost. During the winter you need at least five times as much gas as in the summer so you would need to have five times as many lines in the ground for carrying the gas. The cost to the customer would be prohibitive. By operating the pipeline at virtually the same capacity day in and day out during the year, an efficient economical method results and benefits not only the companies but the customers. In recent hearings before this committee, there has been a general recognition by all persons including spokesmen from the coal industry of the necessity and value of underground storage to the public but the representatives of the coal industry say in effect "But not under or near my coal mine." In my part of the country, western Pennsylvania and northern West Virginia, there are simply no storage areas not underlaid with coal. As a matter of fact, there are few potential gas storage areas east of the Mississippi that aren't in close proximity to coal mining. Our company has been operating in the same area for more than 60 years. We have drilled hundreds of oil and gas wells through workable coal seams during that time. We have been developing underground storage pools for the past 20 years. All these operations have been conducted in an area which has been extensively mined during the same period. During that time with respect to drilling and plugging activities, many of the same objections as stated before your committee were made by the coal operators—the uncharted or mischarted well, the improperly plugged well, the danger of leakage from a well-yet strangely enough these two great industries have managed to get along reasonably well over the years. During the long period that we have operated side by side there has never been any catastrophe or disaster directly due to or caused by an oil or gas well. Since 1934 we have expanded our underground storage operations in both southwestern Pennsylvania and northern West Virginia and they are all located in close proximity to operating coal mines. These pools have been operated steadily ever since 1934 without any objection from coal operators until last year when the coal industry started a concerted drive to prohibit the underground storage of gas in the vicinity of operating mines. Since that time some of the epithets hurled at our company by some of our neighbors in the coal business would rival a politician's comments during a hot political campaign. We have been accused of harboring a potential Frankenstein; yet to repeat a phrase attributed to the late Al Smith "Let's look at the record," the facts are that there is not one instance of a single accident attributable to storing gas underground or operating storage wells in connection therewith. One of the coal operators has asserted that an accident occurring in his mine several years ago was due to underground storage, but the evidence to the contrary conclusively rebuts and refutes his statement as shown by a coroner's inquest report and a board of mine inspectors. I am enclosing a copy of this report and would like to offer it along with this statement. To further look at the record in Pennsylvania, in 1952 it was estimated that approximately 70 percent of the gas in underground storage underlaid mineable coal measures and practically all of that 70 percent was located in depleted oil and gas fields in western and southwestern Pennsylvania. There has been the suggestion that we should investigate other methods of storage, such as surface gas holders. It has been estimated that in the very near future the underground storage requirements in Pennsylvania will exceed 215 billion cubic feet. The cost of providing surface storage holders for that volume of gas would exceed $40 billion. Likewise there was a reference to storing the gas farther from the market and therefore away from coal mine areas and reference was made to the proposed line from western Pennsylvania to New Jersey. My answer to this observation is this; there is a distinct scarcity of potential underground storage reservoirs and you take them where you can find them. The closer a pool is to the market, the better off the company is for providing the gas where it is needed, when it is needed. The gas must be stored in facilities convenient to the market. If you were to trace a cubic foot of gas from the time it leaves its birthplace in Texas until it arrives on the outskirts of Pittsburgh, Pa., you would find that it took at least 3 days to make the journey. On a cold winter day around breakfast time, we would be in sad shape if we had to wait for 3 days to get the necessary supply of gas. Thus, to provide adequate and continuous supply, the closer the pools are to the market, the more readily can the company perform its public service. Another objection placed on the record by the coal spokesmen refers to the accuracy of pool boundaries. I am advised by my company's geologists that it is possible to define with reasonable accuracy the boundaries of a storageg pool. A geological study to determine boundaries of a pool is an integral part of the development of any storage pool and the tremendous capital investments being devoted to this type of storage precludes any half measures in their design which might endanger either life or property. It is fundamental that the pool must be limited and the limits must be known in order that injected gas may not migrate and eventually be lost to the company utilizing the pool. We believe that geologists who are employed by our company and who have been in this work for years know what they are talking about and have a decided advantage by reason of their practical experience over the theoreticians who make wild statements that it is impossible to define pool boundaries. Then there is the objection that there are many, old abandoned uncharted wells. Here again in the development of a storage pool nothing is left to chance. The actual job of finding all wells in a depleted field under consideration for gas storage may be difficult, but we believe sincerely that it would be rash and imprudent on our part to invest in a storage project if all the wells in the pool were not located properly. Various methods are employed ranging from the use of modern technical apparatus to the accumulation of large amounts of information from old literature and contacting long-time residents of the area. Even in cases where all surface evidence of abandoned wells has disappeared all such wells can be and are discovered and located before starting underground storage operations. With reference to the possibility of either horizontal or vertical leakage of gas into coal mines from storage fields alluded to in the testimony of several of the coal witnesses, I can only reiterate that we are just as vitally concerned with the safe operation of a storage reservoir as any coal operator. Now the only possibility of leakage from a storage pool is from or through well holes, and if the wells in the storage pool are properly plugged or reconditioned, there is very little chance of any hazard being created to the coal mine. However, the coal operator has certain responsibilities to fulfill and his failure to leave sufficient support for the protection of the well or his negligence in cutting into the well are certainly not attributable to the gas company. These two hazards are not by any means limited to storage operations but apply with equal force to active production wells. These potential hazards have been with our industry as long as there has been drilling activity in any area in which both industries have operated together. They are not new potential hazards created by storage. While on this subject, I would like to mention what I believe to be a common misstatement by coal operators. They are always talking about our man-created conditions in the use of the substrata. I think it should be recognized that coal mining is equally a man-created use of the substrata. One other objection made by the coal industry to this proposed amendment concerns the operation of storage pools at high pressures. We have recognized from the start that in any storage operation, so long as you operate your pool at pressures not exceeding the original rock pressure on the field that there is absolutely no additional hazard or for that matter any hazard to the coal measure. You are in effect merely restoring to the interstices in the storage sandstone the volume of natural gas that was stored there in its original state. The coal representatives have been unanimous in opposing Federal legislation on the subject under consideration and since their appearance before your committee on April 2, 1954, have submitted a substitute proposal which as I read it would make it impossible to condemn substrata for the storage of gas anywhere in the world. If that is too literal a translation, their proposed amendment would certainly prevent us from exercising the power in the States in which we operate. There is no objection on our part to reasonable restrictions on the exercise of the power of eminent domain, short of those which would in effect negate the power. Likewise we do not see any objection to the Federal Government conferring this power by amendment to the Federal Natural Gas Act. Such a move seems consistent with the spirit of that act, which as originally passed, was intended to fill a gap not covered by State law. The underground storage of gas is just as much a public necessity as the transportation of gas in interstate commerce. That necessity has been recognized by the legislatures of Kentucky, West Virginia, Michigan, Oklahoma, Kansas, Illinois, and Iowa. Congress has recognized the public purpose of transportation of natural gas in interstate commerce; it should now complete the job by granting the power of eminent domain for underground storage of natural gas. Yours very truly, D. B. BEECHER, CARNEGIE NATURAL GAS Co. To the Chairman and Members of the Committee on Mines and Mining of the House of Representatives, Harrisburg, Pa. GENTLEMEN: Your committee held a hearing on May 26, 1953, on House bill No. 1240 relating to the underground storage of gas. One of the witnesses representing the coal industry who made a statement in support of the bill was Charles B. Baton, president, Greensburg-Connellsville Coal & Coke Co., which operates the Hubbard mine located in Allegheny County, Pa. In the course of his statement Mr. Baton made remarks which, in the absence of a full explanation, amount to a contention that the explosion in the Hubbard mine on January 2, 1939, was occasioned by the underground storage of gas by the Carnegie Natural Gas Co. However, the facts are to the contrary. The aforementioned theory of Mr. Baton was thoroughly examined in 1939 by two independent sources, to wit: the coroner's jury of Allegheny County holding an inquisition upon the death of two employees killed in the explosion, and a special commission to investigate the explosion appointed by the secretary of the Pennsylvania Department of Mines. I enclose copies of the reports of these two investigations so that your committee may have full knowledge of the facts. It is interesting to note that the coroner's jury included among its members Mr. L. E. Young, who is an experienced consulting mining engineer. For your further information in studying these reports, please keep in mind that we store only byproduct gas in the gas-storage sands a considerable distance beneath the Hubbard mine; that we have never stored natural gas there; that byproduct gas contains hydrogen while natural gas does not contain hydrogen; and that methane gas is frequently found in coal mines. Yours very truly, STATE OF PENNSYLVANIA, Allegheny County, ss: D. S. KEENAN, President. An inquisition, indented, taken at McKeesport and First Ward, Pittsburgh, Pa., in the County of Allegheny, on the 29th January and 23d day of February, A. D. 1939, before me, William D. McClelland, Coroner of the County aforesaid, upon the view of the body of Joseph Bertozzi then and there lying dead, upon the oath and solemn affirmations of six good and lawful men of the County aforesaid who, being sworn and affirmed and charged to inquire, on the part of the Commonwealth, when, where and how, and after what manner, the said Joseph Bertozzi came to his death do say, upon their oath and affirmations aforesaid that the said Joseph Bertozzi, age 41 years, 1 month, 2 days; nationality, American; Social Relation, Married; Occupation, Coal Miner; and residing at 4218 Walnut Street, McKeesport, Pa., came to his death at the McKeesport Hospital, McKeesport, Pa. Sunday, January 29, 1939 at 12:01 a. m. from bronchopneumonia following burns of face and ears received at the Tube City Collieries Co., Versailles Township, Pa., Monday, January 2, 1939 at 7:25 a. m. due to an explosion in mine. And from the evidence and postmortem examination made the jury finds death was due to the above cause and the same was accidental, and that the direct cause of death of the above-named deceased was an explosion of methane gas, having become ignited by an arc from the trolley wheel of a locomotive, and that the explosion was due to the erection of a door in the main entry, thereby permitting an accumulation of explosive gas. We, the jury, condemn the erection of this door without having secured the approval and consent of the State Mine Inspector. We, the jury, also condemn the practice of permitting men to enter gaseous mines on any shift, either on working days or idle days, without inspection and reports of fire bosses, as specified in Article 5, Sections 1 and 2, of the law, and we further recommend the strict enforcement of formal opinion No. 249 dated April 20, 1938, from the Department of Justice to the Department of Mines, interpreting Article 5, Section 1, relating to the examination of gaseous mines, before each shift. Therefore, the jury recommends that the authorized State officials shall take proper |