Florida's First Natural Gas Storage Facility Approved
September 2, 2008
Florida's first in-state natural gas storage facility cleared its final regulatory hurdle on August 29 when the Federal Energy Regulatory Commission issued its order granting the Floridian Natural Gas Storage Company (FGS) a certificate to construct and operate the $600 million storage facility.
Located in Martin County on a 145-acre remediated Superfund site, the facility will have the capacity to store a strategic reserve of eight billion cubic feet of natural gas. Once construction is completed, the facility will be able to offer all of Florida's energy utilities the ability to store natural gas reserves downstream of potential supply interruptions from hurricanes or other emergencies.
Once FGS finalizes gas storage contracts with Florida utilities, construction is anticipated to start in early 2009, according to the company's founders Brad Williams and David Sharp. Nearly half of Florida's electricity is fueled by natural gas. Completion of the three-year construction project is estimated for 2012. Once in operation, the FGS facility will store enough natural gas to power over two million homes for at least ten days during an emergency, said Williams.
The Florida Public Service Commission focused on the need for natural gas supply reliability for the state in their 2007 ten-year site plan review: ". as the state's dependence on natural gas-fired [electricity] generation continues to grow, gas supply and deliverability become increasingly important," according to the report published in December.
"The project is a win-win for Florida," said Sharp. "It will add system reliability and, at the same time, improve the local and state economy. The project will employ 350 workers during the three years of construction and provide over $100 million in economic benefit to the surrounding area," he added. Once operating, it's estimated that the company will pay several million dollars in property taxes annually.
"We are excited to clear this important hurdle that completes the federal, state and local permitting process for the facility," said Williams. "The facility's site is strategically located to connect to existing natural gas pipeline infrastructure so that natural gas from the FGS facility can be delivered in an emergency to almost any power plant or utility in the State of Florida," he said.
In its order issuing the certificate, the Federal Energy Regulatory Commission wrote: "Having gas stored at the FGS facility will enable [the company's] electric generator customers to better manage their fuel supplies because they will have an at-the-ready source of natural gas when needed for peaking supplies or when the market or weather conditions, such as hurricanes, necessitate access to an additional supply source."
"Florida's utilities have done a very good job of managing fuel supply in the past and will continue to do so in the future," said Williams. "We are happy that the Floridian project can now offer them this strategic reserve - within the state, where it is needed and when it is needed -- for the most critical and vulnerable fuel source used to power the state's electricity grid," he added.
Floridian Natural Gas Company's principals outlined additional benefits of the project, including the ability of the state's utilities to significantly reduce the amount of polluting fuel oil currently being consumed to generate electricity during peak summer months. Sharp estimates that utilizing the natural gas stored in the FGS facility, rather than fuel oil, would be equivalent to removing the emissions of 63,000 cars from the road each year.
Williams added that "utilizing natural gas stored in the FGS facility when gas prices are low can help utilities save their customers money by stabilizing fuel costs as lower fuel costs ultimately reduce what ratepayers have to pay for electricity."