Fracking fuels request to expand Newington facility

NEWINGTON — The controversial process of fracking is having economic implications locally and could become a factor in an uptick in activity along the freight rail line that cuts through downtown Portsmouth and surrounding towns.

Sea-3 Inc. has submitted plans to the Newington Planning Department to construct additional facilities on its lot at 109 Shattuck Way to provide for an increase in off-loading capacity for liquefied petroleum gas, better known as propane.

Sea-3 is part of the LPG division of Transammonia, a worldwide group trading in ammonia, fertilizer, LPG, petrochemicals and other commodities. Sea-3 is a propane dealer, according to Paul Bogan, vice president of operations.

Town Planner Tom Morgan said Sea-3 has traditionally been an importer of propane from Algeria. Locals may be familiar with the large, orange freighters that have traveled up the Piscataqua River to deliver propane shipments to Sea-3 over the years. In Sea-3's heyday, Morgan and Bogan said, the company accepted 10 to 12 such shipments annually, but in recent years, the deliveries have dropped precipitously.

The shift is due to the domestic practice of hydraulic fracturing, otherwise known as fracking. Fracking is a process that extracts natural gas from shale rock layers deep within the Earth by drilling and injecting highly pressurized fracking fluids into the bedrock.

Critics of the process say it requires using up to 600 types of chemicals, including known carcinogens and toxins that leach into and contaminate groundwater and cause other hazards such as earthquakes. But proponents argue fracking has significant positive effects on the country's economy; the American Enterprise Institute reports that the United States produced 8.5 million cubic feet of natural gas from shale gas wells in 2011, a value of about $36 billion.

Regardless of the debate surrounding the practice, fracking is affecting the domestic costs of natural gas and propane, which is a part of natural gas in its raw state. It is also changing how Sea-3 wants to do business.

Sea-3's proposal filed in Newington represents a shift from importing to exporting. The company has traditionally shipped imported propane across New England by truck, but the company's proposal would allow it to "provide bulk volume available for shipping by sea to accommodate domestic and foreign product price fluctuations," according to a letter from Haight Engineering to the town planning office.

The expansion, according to the letter, would increase the volume of product the existing facility can off-load from rail cars and store in existing on-site tanks.

Included in the plan are upgrades to the existing railroad siding, installation of a new railroad siding with discharge pads to accommodate additional rail cars, and installation of three 90,000-gallon above-ground tanks and associated chilling and pumping equipment required for propane storage.

While the letter from Haight states the upgrades would accommodate up to an additional 10 rail cars, Bogan said the company only wants to increase its capacity by six rail cars, adding to the capacity to unload six cars that has existed since 1975.

"The product we bring in ... part of it would go by truck into the domestic market and part of it we would ship out to the foreign market," primarily in Europe, Bogan said.

He noted the business did some exporting in the 1980s and that rail cars carrying propane have been coming to the business for years.

The rail line that services the Shattuck Way industrial corridor in Newington is part of the old Portsmouth and Dover Railroad that was built in 1874. It is now owned by Pan Am Railways as part of a line that runs out of Newington and crosses through multiple communities before meeting up with the Rockingham Junction Station on the border of Newmarket and Newfields.

Cynthia Scarano, executive vice president of Pan Am Railways, said the company does not talk about specific customers, but noted the line is getting more business, not only from Sea-3 but also from other customers along the corridor.

She said Pan Am has five "very active customers" and another two or three that occasionally use the freight line; most are located along Shattuck Way, she said.

Freight trains currently travel to Newington on an as-needed basis that amounts to three times a week on average, according to Scarano. If business growth goes as projected, that will increase to one trip daily, seven days a week, she said.

If such an increase takes place, Pan Am would have to hire at least two more crews, according to Scarano.

"We're very excited," she said.

Morgan said the tracks "aren't in great shape" and Pan Am assured the Planning Board at an informal presentation Monday night that they will be upgraded.

To ship propane on rail lines, Scarano said the track has to meet federal standards as a "Class 1" railroad. It currently meets the standards, but Pan Am will conduct some upgrades anyway due to the anticipated increase in business, she said.

The track is already inspected weekly by Pan Am and, at least once a year, a private company X-rays the line to search for cracks and other problems invisible to the naked eye, she said.

The line in question crosses over several busy roads, including Maplewood Avenue in downtown Portsmouth and Route 33 in Greenland.

Portsmouth Fire Chief Steve Achilles said he was not aware of the projected increase in activity along the line, but expects the city would be included as talks become more formal.

If rail traffic does increase, Achilles said he would like the city to be aware of safety plans and schedules so that if an incident does occur, officials can help mitigate the impact more quickly.

In his experience, he said, the transportation of propane is safe.

In 13 years in Portsmouth, Achilles said he hasn't seen any significant propane transportation incidents, and that even when a tanker carrying propane rolled over at the traffic circle in 2001, there was no fire and no propane leak.

"Propane travels on our roads all the time," he said. "The containers are very safe."

Morgan said the use Sea-3 is proposing is permitted by zoning, but the company will require some dimensional relief from town codes. He expects Sea-3 to have the necessary items filed so it can meet with the Zoning Board of Adjustment on Monday, Sept. 30.

The company also is going before the town Conservation Commission tonight to discuss its proposal, which requires building in the shoreland buffer.

Many New Englanders are slowly shifting from oil heat to propane as rebates promote conversion to the cheaper and more environmentally friendly alternative.

Advocates of propane as a home-heating source tout its cost, versatility and impact on the environment when compared to oil.

Jeff Dillion, sales and marketing manager for Eastern Propane and Oil, of Rochester, said heating oil is fading as the dominant fuel source for home heating in the Northeast.

"It's a dinosaur fuel," he said.

The primary enticement for homeowners to switch to propane is most likely the cost savings associated with it. According to the U.S. Energy Information Administration, residential heating oil prices last March hovered around $4 per gallon nationally, while residential propane prices were about $2.50 per gallon. According to NewEnglandOil.com, the average price of heating oil in New Hampshire is currently $3.41.

While many new homes are built today with propane in mind, Dillion said upgrading to a propane heating system in older homes can cost $10,000 or more. What may make the conversion more palatable to those whose heating systems are more than 10 years old is the availability of rebates to help offset up-front costs, he said.

"It certainly is helping the drive to go greener and for people to save money," he said.

Dillion said over a six-month period this year when Eastern entered the first year of a new program offering $500 rebates for conversions to propane heating systems, the company had approximately 150 customers switch over to the alternative heating source.

Funds for that rebate, which came through the Propane Gas Association of New England, have been depleted for this year, but Dillion said Eastern is hopeful more funds will be available next year. The company also offers a $500 rebate as an incentive for people to make that change, he said.

Other area propane providers are offering similar rebates. Proulx Oil and Propane of Newmarket is currently advertising on its Web site up to a $1,000 rebate to replace existing oil boilers or furnaces with a new propane boiler or furnace.

Dillion said a good "one-stop shopping area" for potential rebates is NHSaves.com. The Web site details mail-in rebates for the purchase and installation of high-efficiency Energy Star residential heating, cooling and water heating equipment, including those that use propane. According to the site, the 2013 New Hampshire rebate program began April 1 and will continue through Dec. 31, or until funds are depleted. Rebates are available to customers of the following participating New Hampshire utility companies: Public Service of New Hampshire, Unitil, Liberty Utilities and the New Hampshire Electric Cooperative.

As of Sept. 10, there were still funds remaining for customers of all four companies, but they are running out. Rebates are available on a first-come, first-served basis.

"Many rebates are running out because of the time of year it is," Dillion said.