Senator PURTELL. We wanted to know whether you considered the amendment necessary?

Mr. MCCABE. Yes, sir; that is brought out in the letter from the Secretary of the Interior, dated February 11, 1954.

Senator PURTELL. We have that letter here, and it will be made a part of the record.

(The letter referred to is as follows:)

UNITED STATES DEPARTMENT OF THE INTERIOR,

OFFICE OF THE SECRETARY,

Washington, D. C., February 11, 1954.

CHAIRMAN, COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE,

United States Senate, Washington 25, D. C.

MY DEAR MR. CHAIRMAN: You have requested the views of this Department on S. 525 (83d Cong.), a bill entitled "To amend section 7 (h) of the Natural Gas Act."

This bill is designed to facilitate the storage of natural gas in underground formations in order to make gas available at reasonable cost to persons living in regions distant from producing gas fields. It would do so by enabling gas companies to exercise the right of eminent domain to secure lands or interests therein for storage purposes in cases where owners of small or fractional interests obstruct the acquisition of storage rights in underground formations. The Department of the Interior favors the enactment of this bill if it is amended as hereinafter suggested.

The storage of natural gas in underground formations adjacent to points of consumption has become increasingly important during recent years as a means of safeguarding the supply of natural gas to consumers during periods of peak demand. It is particularly important as a measure of security in the defense program.

Extending the right of eminent domain for purposes of underground gas storage may, however, increase existing hazards to the health and safety of persons engaged in underground mining operations in the vicinity of the gas storage reservoir. This is particularly true in the Appalachian region where gas is stored in depleted gas fields underlying and near active coal mines. It is therefore necessary to balance the benefits which this bill would produce in the economic storage of gas, and the hazards which may result to those working in active mines.

We therefore recommend that the Congress, in extending the right of eminent domain for the purpose of underground gas storage, should restrict that right to areas where such storage would not increase the hazard to the safety or health of mine workers. The right of eminent domain for gas storage should therefore not be extended to facilitate the storage of gas in the vicinity of active underground mining areas. To accomplish this recommendation, it is suggested that the bill be amended by deleting the word "and" in line 7, by substituting a comma for the period in line 10, and by adding the following language to this bill:

"And by substituting a colon for the period at the end of the sentence and inserting the following proviso: Provided, That the right of eminent domain shall not be exercised to acquire land or interests in land for the storage of gas unless the court determines that such storage is not likely to result in hazard to men working in any active underground mine.'"

We assume that the enactment of this legislation would not give a public utility, which exercises the power of eminent domain under this bill, any immunity from applicable State laws and regulations concerning the safety, health, and protection of property of the citizens of that State, particularly miners and operators of coal mines. We also assume that a public utility acquiring land through the exercise of eminent domain as provided for in the proposed legislation would still be subject to all applicable State laws and regulations respecting the use of that property. It is suggested that the legislative history of this bill make this clear and that if there be any doubt the bill be amended to so provide.

The Bureau of the Budget has advised that there is no objection to the submission of this report to your committee.

Sincerely yours,

F. E. WORMSER, Assistant Secretary of the Interior.

Mr. McCARE. There was a question with respect to the hazards of undergrond storage. First of all it was asked how natural gas can be stored safely. I would like to have Mr. Anderson answer that, and any other questions the committee may have on the engineering aspect. Senator PURTELL. Do you have any questions. Secator Schoeppel! Senator SCHOEPPEL. No questions at this time.

Senator PURTELL. Then we would be very happy to have the statement of Mr. Anderson.

STATEMENT OF C. C. ANDERSON, ASSISTANT CHIEF, PETROLEUM AND NATURAL GAS BRANCH, BUREAU OF MINES, DEPARTMENT OF THE INTERIOR

Mr. ANDERSON. I believe the first question is how natural gas aan be stored safely.

There are two types of storage, broadly speaking, the above ground type and the underground I presume that the question is directed principally to underground storage rather than the above-ground storage.

Seater PURTELL I think we would like to get the answer on both. if we could. because it is quite evident that both are being considered, as you heard the testimony by a witness preceding you.

Mr. ANDERSON. Yes, sir.

The above-ground storage is usually steel structures, tanks, such as gas bolders and high-pressure cylinders. They can be fabricated so that they are gastight and subjected to periodic inspection tests to make sure that they are in first-class operating condition.

By restricting the use of fires and other dangerous things in the vicinity of the storage holders and cylinders, they can be operated safely and satisfactorily.

Senator PURTELL. Now, about the underground storage.

Mr. ANDERSON. The underground storage can be cperated safely also. However, there are many more problems connected with underground storage than with the above-ground storage. No one can see the underground storage reservoir. It is more difficult to determine that the cap rock, as we speak of the impervious rock overlying the area is actually gastight. In the case of discovering new gas felds that contain gas under high pressure, we know that the cap rock is tight. In cases where the underground storage reservoir is one that has not contained oil and gas, but was probably a water-bearing structure, it is sometimes more diult to ascertain that the cap rock is tight. The presence of faults is sometimes difficult to detect but in general we can determine whether the reservoirs cap rocks are tight.

The next thing is the mechanical conditions of the wells that penetrate the reservoir. Gas wells can be drilled, casing put in the hole and the casing firmly bonded to the cap rock before the well is completed. It can be pressure tested to make sure that it is gas tight.

By following through all these precautions and checking, it is possible to make a gas-tight underground storage that will operate safelv.

Now, the hazards. I have mentioned some of those. Of course the lack of a tight cap rock is one. There is nothing much that can be done about that. If that is found. the reservoir site should be abandoned. Also, if there are faults that would permit leakage, they

would condemn the reservoir site. In many instances the underground natural-gas storage project is located in an old, depleted or nearly depleted gas field. Sometimes the gas wells in that field are not in good mechanical condition. It is the duty of the operator to put those wells in first class mechanical condition to prevent leakage. Also, in some instance there are abandoned wells that have not been plugged properly. They were possibly abandoned before our present standards for operation in the industry were developed. Often these wells are very hard to operate.

The Bureau of Mines has conducted some research on locating old abandoned wells, because there is the same problem in secondary recovery operations in old oil fields. We have not been able to develop an instrument that is satisfactory in all cases to locate old unplugged, uncharted wells but methods have been developed that are useful in locating many of these old wells. The uncharted, unplugged, abandoned well is a hazard and probably the most serious hazard.

Companies spend a great deal of money trying to find those old wells and abandon them properly.

I think that about concludes my answers to the questions of whether gas can be stored safely and the hazards involved."

Senator PURTELL. Have you any questions, Senator Schoeppel? Senator SCHOEPPEL. Generally speaking, in your studies you have found that the natural reservoirs that have been depleted, nature has provided adequate safety factors in the pressure originally or the virgin pressure found in those reservoirs.

Mr. ANDERSON. Yes, sir; up to the virgin pressure.

Senator SCHOEPPEL. Now your history and investigations have shown that most of the hazards have come about as you pointed out by the lack of proper methods of proper plugging of abandoned wells. These were the instances where the hazard develops.

Mr. ANDERSON. Yes, they are manmade.

Senator SCHOEPPEL. Yes, manmade, and certainly not naturemade, and that is what you intended to point out specifically. Mr. ANDERSON. Yes, sir.

Senator SCHOEPPEL. And the Department that considers the utilization of these reservoirs for storage, depleted as they have been previously, must take due cognizance of the initial virgin pressure that that well sustained. It could develop into a hazard if it would exceed that virgin pressure by a number of times.

Mr. ANDERSON. Yes, sir; we have a similar condition in water flooding and we have made studies of pressure injection and found that if the pressure exceeds a certain amount it does break down the reservoir of lifts the overburden and the injection rate is changed thereby.

Senator PURTELL. Do you have another member from your organization, Mr. McCabe?

Mr. MCCABE. Yes, sir; Mr. Walker would like to speak at this time.

Senator PURTELL. We would like to have him.

Mr. MCCABE. Before Mr. Walker goes on the stand, we have here a study of the Bureau of Mines, Information Circular No. 7654, entitled "Underground Storage of Natural Gas in Coal-Mining Areas" by Henry P. Wheeler, Jr., and William E. Eckard, published 2 months ago.

Senator PURTELL. We would like very much to have it. Would you wish that included in the record!

Mr. McCABE. Yes, sir.

Senator PURTELL. It will be inserted in the appendix.

At this point we will hear from Mr. Walker.

Senator SCHOEPPEL. Mr. Chairman, I had a matter here which I wanted to ask Chairman Kuykendall about, and there is a feeling in some of the States, certain of the State regulatory bodies and in the judgment of the State authorities, they feel that those States may want to use in their own good judgment those fields for storage of natural gas within their States to be utilized there. I don't know what the Chairman of the Federal Power Commission's views might be on that. I could go into that a little bit further, but I rather suspect that Senator Hunt is covering that phase of it.

Senator PURTELL. I have no idea. Suppose we withhold the views on that until a later date. Is Chairman Kuykendall still here! If he is here, perhaps he could discuss it at this point.

Apparently he has already left the room.

Senator SCHOEPPEL. There are several details I would like to go into with him, if we can have him at some later date.

Senator PURTELL All right, we will have him back at some later date, if you so desire.

I now call Mr. W. D. Walker, Chief of the Accident Prevention Division.

STATEMENT OF W. D. WALKER, CHIEF, ACCIDENT PREVENTION

DIVISION, BUREAU OF MINES, PITTSBURGH, PA.

Mr. WALKER. There has been discussed here the fact that the original gas sands and domes in which gases are entrapped provide a natural seal for them. The coal people are concerned primarily with the hazards that are evolved by the tapping into these sands, many of them drilled years ago with no record as to their location, depth, and so on.

I would like to outline to you some of the potential hazards to coal mines from wells and underground gas storage areas.

They are that unknown, uncharted and improperly located wells, and defective wells could permit seepage of gas into the mine.

Abandoned wells mined into years ago and not properly plugged or improperly located are now in worked-out or abandoned and inaccessible areas.

Improper mining by unreliable operators can cut into presently active or unknown wells.

The Bureau of Mines has obtained information on at least 14 instances where uncharted wells have been mined into.

Coal mine officials readily admit that there are numbers of other instances which have not been reported to the Bureau of Mines, and they are not recorded. These wells that have been mined into years ago, the area pillared or the support withdrawn, have permitted caving and therefore those wells are inaccessible for checking or testing at this time, and, because of the fracture of the structures above the coal due to the pillaring of the coal, it would be very difficult, if not impossible, in some instances to properly locate and seal such

abandoned wells, and these abandoned wells are now in some mines connected to the active workings.

I believe that pretty well sums up the hazards as we see it from the coal-mining viewpoint.

Senator PURTELL. You would anticipate that certain safeguards would be set up where some of the hazards that you present in your discussion would be recognized, and these would not be used for storage. Is it your thinking that you want to set up more rigid standards to determine whether this space could be used for storage?

Mr. WALKER. I believe the policy insofar as the Bureau is concerned, has been set forth in the Secretary's letter which states that these hazards be taken into consideration at the time of granting the privilege of eminent domain.

Senator PURTELL. Wouldn't the State laws take care of it, and I don't know all the State laws, but isn't it true that most of the States have safety and health laws that would preclude the use of the mines that you described as being hazardous for this purpose?

Mr. WALKER. I am not familiar with all the State laws pertaining to the subject in its relationship to underground gas storage. There has been some consideration given in some States to the regulation of underground storage due to its effect or hazard insofar as coal mining is concerned. Just what position that is in now, I could not tell you. Senator PURTELL. Have you any questions you would like to ask the witness, Senator Schoeppel?

Senator SCHOEPPEL. No questions.

Senator PURTELL. Senator Dirksen, have you any questions?

Senator DIRKSEN. No, thank you; I have no questions at the moment. Senator PURTELL. Thank you for appearing. Have you any other witness, Mr. McCabe ?

Mr. MCCABE. The Chief Counsel of the Bureau of Mines, Mr. Donald G. Welsh. We would like very much to have him testify.

Senator PURTELL. All right, Mr. Welsh, will you please come up here?

STATEMENT OF DONALD G. WELSH, CHIEF COUNSEL, BUREAU OF MINES, DEPARTMENT OF THE INTERIOR

Mr. WELSH. I am appearing here to attempt to answer the six questions that were submitted by the committee, and also any other ones that may be within my field of competence.

Senator PURTELL. I would like to have you feel that you are not at all limited to these questions. These are simply some of the questions that we felt needed answers, at least for the information of the chairman, but we want you to feel free to answer not only these, but any other questions that you feel might arise.

Mr. WELSH. All right, Mr. Chairman, we will consider your first question, if you would care to put it.

Senator PURTELL. The first question is: Do you consider the amendment necessary?

Mr. WELSH. As to the necessity of the amendments suggested by the Department of Interior, it is the departmental position that an amendment like that, if not necessary, is at least desirable on the basis that this would eliminate, so far as is reasonably possible, any likelihood that a mine operator would be subjected against his will to haz