"(a) no part of the natural-gas storage pool as to which the condemnation is proposed underlies or overlies any known commercially recoverable coal or other mineral deposit other than oil or gas, and "(b) the said natural-gas storage pool will not endanger in any manner the health or life of any person engaged in mining, and "(c) the said natural-gas storage pool will not interfere with or impede in any manner the present or future recovery of any known commercially recoverable mineral interest. "(6) Any final order of the Federal Power Commission entered in a proceeding authorized by this section shall be subject to review by the United States Court of Appeals in the same manner as any other final order of the Commission. "(7) Nothing contained in this Act shall be construed to prevent or restrict the application of any State law or regulation pertaining to health and safety to any underground gas-storage pool except insofar as such State law or regulation may be in conflict with a specific provision of this Act. "(8) The practice and procedure in any condemnation proceeding under subsection (1) of this section in the United States district court shall conform as nearly as may be with the practice and procedure in similar action or proceeding in the courts of the State where the property is situated: Provided, That the United States district courts shall only have jurisdiction of cases when the amount claimed by the owner of the property to be condemned exceeds $3,000.” Mr. ROBERT D. L'HEUREUX, COLUMBUS, OHIO, May 12, 1954. Counsel, United States Senate Committee on Interstate and Foreign Commerce, Washington, D. C. DEAR MR. L'HEUREUX: This is an answer to your letter of April 27, 1954, and represents the views of the coal operators who are members of the Ohio Coal Association, Northern West Virginia Coal Association, Western Pennsylvania Coal Operators Association, Central Pennsylvania Coal Producers Association, and Somerset County Coal Operator's Association, all of whom are represented by the coal producer's committee on underground gas storage safety. At the hearing before the subcommittee we opposed the adoption of S. 525 because we believed that the subject matter of S. 525 was properly a matter for State regulation and we still adhere to that view. Moreover, S. 525, as originally introduced, would have resulted in serious safety hazards by authorizing the unrestricted exercise of the right of eminent domain for the purpose of underground gas storage, and would have permitted the condemnation of coal properties. We have pointed out that we are in favor of the principle of underground gas storage so long as it is accomplished without creati: g hazards to coal miners and coal properties. We also recognize the desirability of granting the right of eminent domain to be used in acquiring storage reservoirs that can be operated safely. While we still have reservations about the propriety of Federal legislation on this subject matter, we shall not further oppose the enactment of S. 525 if it is in the form of the amendment sent us with your letter of April 27, which we believe gives us the protection necessary for the safety of our employees and the preservation of our property rights. On page We call your attention to what is apparently a typographical error. 1, line 7 of the proposed amendment which you sent to us, the word "and" has been omitted from the present language of the act. The word "and" should follow "natural gas" and precede "the necessary land." We assume that this omission is unintentional. We would be most grateful if you would continue to keep us informed of any further developments in the consideration of S. 525 by you and Subcommittee No. 6. We would especially be interested in any further drafts or suggestions you may receive on this subject. COAL PRODUCER'S COMMITTEE ON UNDERGROUND Mr. ROBERT D. L'HEUREUX, JAMISON COAL & COKE Co., Counsel, United States Senate Committee on Interstate and Foreign Commerce, Washington, D. C. DEAR MR. L'HEUREUX: Thank you very much for your letter of April 27, 1954, and the copy of the amendment enclosed. May I advise you that I have consulted with other coal operators interested in this matter and we have jointly agreed to the position taken by Mr. Ed. D. Schorr in his letter to you of May 12, 1954. Will you please consider Mr. Schorr's letter as expressing my reply to your letter? Very truly yours, W. B. JAMISON, Vice President. UNITED MINE WORKERS OF AMERICA, SAFETY DIVISION, Washington, D. C., May 12, 1954. Mr. ROBERT D. L'HEUREUX, Counsel, Interstate and Foreign Commerce Committee, DEAR MR. L'HEUREUX: Thank you for your letter of April 27 and the enclosed draft of an amendment to S. 525. I have no comment to make this time, but reaffirm those made during the last two meetings of the committee. Very truly yours, CHARLES FERGUSON. Mr. ROBERT D. L'HEUREUX, HILLMAN COAL & COKE Co., Counsel, Committee on Interstate and Foreign Commerce, DEAR SIR: On April 27, you wrote me in care of Western Pennsylvania Coal Operators Association, referring to S. 525 and attached a draft of an amendment to this bill to provide safety for the coal miners and guard the property interests in mineral deposits. On May 12, Mr. Ed D. Schorr, attorney for the Coal Producer's Committee on Underground Gas Storage Safety answered your letter on behalf of Western Pennsylvania Coal Operators Association as well as the other associations. We are in accord with Mr. Schorr's letter to you and call your attention particularly to the fourth paragraph of his letter which is quoted below and with which we are in accord. "While we still have reservations about the propriety of Federal legislation on this subject matter, we shall not further oppose the enactment of S. 525 if it is in the form of the amendment sent us with your letter of April 27, which we believe gives us the protection necessary for the safety of our employees and the preservation of our property rights." I will appreciate the courtesy if you will continue to keep me informed of further developments in connection with the action of Subcommittee No. 6 in considering S. 525, and will appreciate receiving copies of any further drafts or suggestions which you may receive on the subject. Thanking you for your favor in this matter, I am, Yours very truly, W. G. STEVENSON. FREDERICK, MD., May 12, 1954. Mr. ROBERT D. L'HEUREUX, Counsel, Committee on Interstate and Foreign Commerce, United States Senate, Washington, D. C. DEAR MR. L'HEUREUX: I have carefully considered the amendment to S. 525 which you submitted to me with your letter of April 27, 1954. The proposed amendment, in my opinion, provides the necessary safeguards for the protection of the mineworkers and the properties of the companies owning the mineral deposits. 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 |