The South Bethany Town Council held a workshop on Saturday, Aug. 23, to address a proposed in-ground propane storage facility at 102 Evergreen Drive, next to town hall. Representatives from Chesapeake Utilities Corp. and subsidiary Sharp Energy Inc. fielded questions from 9 a.m. to 11 a.m. in council chambers.

More than 50 people attended. Among the topics of discussion were: the potential effect on property values the tanks would have, availability and cost of service to local residents and a risk management plan.

Chesapeake originally proposed a semi-buried storage facility in 2001 for South Bethany, which met strong opposition. In the fall of 2002, the town council distributed a three-part referendum partly asking local residents if they would like council to resume negotiations with Chesapeake. Residents voted overwhelmingly to look at a new proposal, this time for fully-buried storage tanks. Chesapeake refined the new proposal and presented it to council in April. Council then held a well-publicized, public presentation in June.

Several people still opposed the plan, which led Chesapeake to mail South Bethany residents a nine-page question-and-answer packet with a color photo of the proposed facility. Many in attendance at the Aug. 23 meeting brought those packets and referred to them.

Jim Moore, assistant vice-president and director of natural gas distribution at Chesapeake Utilities, suggested that many real estate buyers come to the area from Washington, D.C., Baltimore, Md. and Philadelphia, where gas distribution is part of city infrastructure. According to Moore, these potential buyers would consider the option of connection to a gas system to be a selling point.

Bob Zola, president of Sharp Energy, said the underground storage increases vehicular safety. He contrasted gas truck deliveries to backyard propane tanks all over the neighborhood with an estimated 60 deliveries a year to one location.

Gas trucks for the new storage facility would be the same trucks that currently deliver to homes. The only difference is, as Zola put it, "The truck makes one stop, empties its tank, and leaves."

Cat Hill residents represented a large portion of those attending, and several voiced concern that, although they would be very close to the proposed facility, they would not benefit from it since there is no gas main installed in their neighborhood. Moore responded that the company planned to actively market to Cat Hill residents in an effort to determine whether there was sufficient interest and offered to conduct a survey.

Zola offered propane to town residents at $1.10 a gallon for the first two years, regardless of market prices, and price stability after two years by tying to an oil refinery. Propane is a byproduct of oil refinement. According to Zola, gas from a refinery would be less affected by supply-and-demand fluctuations than a large, regional gas storage facility.

Following this forecast, South Bethany Mayor Don Beck moved to point out that the town was by no means offering Chesapeake Utilities a franchise. The company will still have to compete with local gas delivery companies like Pep-Up and Suburban.

Several residents had questions about safety, and Moore followed up on the June 13 town meeting, when there was some discussion about the tanks shifting in the sandy soil and the potential benefits of tying them to a concrete slab below. Since then, Chesapeake has considered that the slab itself might shift and has asked structural engineers to look at the proposal.

Moore stated, "We've been able to overcome a lot of the initial concerns and opposition to the proposal through the educational process that these town meetings have provided."

Zola added, "Many resorts are going with these community gas systems because that's what customers want. They understand that it's the most safe and convenient way of delivering propane."

The town council will hold a special meeting, open to the public, on Friday, Aug. 29 at 4 p.m. At that point, the council will determine how to proceed next with the propane tank project.

If the proposal is accepted, council will begin discussions with Chesapeake Utilities about land lease agreements, the risk management plan and other legal and contractual matters.

Reach Sam Harvey at mailto:wave@smgpo.gannett.com

Originally published Wednesday, August 27, 2003