Salt Domes Important To Louisiana’s Economy, Industry

New regulations for the state’s salt domes are here

You may not know it but Louisiana salt domes are essential to the state’s oil and gas and chemical industries. fiAlthough the Bayou Corne sinkhole has created some new concerns and regulations regarding salt domes, they have been used in the state for more than 60 years. Salt domes have been proven safe, secure, and economically and environmentally sound.

In Louisiana, salt domes have been used for mining and storage, including brine mining, natural gas storage, crude oil storage and LNG storage.

“We use salt domes extensively in Louisiana,” said Blythe Lamonica, executive director of Solutions Through Science, a partnership of vinyl and chlorine producers and users in Louisiana. “It’s important to understand why salt domes are essential, how they impact so many industries in Louisiana and how abundant they are in our state. They play a vital role in manufacturing locally and nationwide.”

The U.S. government began storing the Strategic Petroleum Reserve (SPR) in salt domes in the 1970s. Created deep within the massive salt deposits that underlie most of the Texas and Louisiana coastline, the caverns offer the best security and are the most affordable means of storage, costing up to 10 times less than aboveground tanks and 20 times less than hard rock mines. Storage locations along the Gulf Coast were selected because they provide the most flexible means for connecting to the nation’s commercial oil transport network.

A large portion of the SPR is in two locations in Louisiana. West Hackberry in Lake Charles has a capacity of 227 million barrels, and Bayou Choctaw in Baton Rouge has a capacity of 76 million barrels with plans to add 109 million more (expected completion date is 2020). The average SPR cavern can hold 10 million barrels of oil, and the SPR contains 62 of these huge underground caverns.

In August 2012, the Bayou Corne sinkhole formed as a result of mining too closely to the edge of a salt dome cavern. As a result of this incident, the Office of Conservation within the Louisiana Department of Natural Resources (LDNR) implanted new rules and regulations approximately a year ago for companies operating salt domes. The deadline for operators to comply was Feb. 20.

“These regulations now require a certain space between each cavern,” said Tyler Gray, general counsel of the Louisiana Mid-Continent Oil and Gas Association (LMOGA). Prior to joining LMOGA, Gray worked at LDNR in the Office of Conservation where he focused on the new salt cavern operating regulations.

“There are existing caverns in place that don’t necessarily meet this distance rule so companies are asking for a variance to the rule,” Gray said. “These operators must show they are taking the additional monitoring requirements, since they’re mining closer than suggested, and adhering to the necessary safety standards and practices. As far as regulations with the existing caverns and operations, it’s looked at on a case-by-case basis.”

According to Gray, there are more than 200 operators in these existing salt caverns, but there are very few that do not meet the new regulations.

“Everyone is working on this together to make sure regulations are conformed and industry continues to operate in a manner that’s effective and, most importantly, safe,” Gray explained. “It’s essential to ensure we’re practicing to the highest standards while working in these salt caverns, one of the greatest resources in Louisiana.”

For more information about Louisiana salt domes, contact Blythe Lamonica at (225) 344-0381 or email blamonica@hdaissues.com.