Oil reserve site raises ire, Bush policy tested

By Tom Doggett

WASHINGTON (Reuters) - The Bush administration says it favors "environmentally friendly" energy development, but that policy is under attack in a Mississippi town where residents worry a planned emergency oil reserve may drain a river, destroy wetlands and harm Gulf of Mexico fishing areas.

There is fear the Energy Department's plan to carve out underground salt caverns in Richton, Mississippi, to hold some 160 million barrels of crude oil could be the worst environmental disaster to hit the state since Hurricane Katrina.

The government's decision to pick Richton as the fifth storage site in expanding the country's Strategic Petroleum Reserve was touted as a $4 billion economic boost for a state still suffering from being sideswiped by Katrina.

The Energy Department said the oil site will be constructed in an "environmentally friendly" manner, but many residents and environmental groups feel that is just government-speak.

"That's an absolute joke, there is nothing environmentally friendly about this project," said Steve Shepard, Gulf Coast director for the Sierra Club's Mississippi chapter. "They want to ram it down our throats."

The strategic reserve, created by Congress after the 1973-74 Arab oil embargo, is the largest stockpile of government-owned crude in the world. It now holds a record 701 million barrels of oil at four locations in Texas and Louisiana.

The Department of Energy is boosting the reserve to 1 billion barrels, as Congress mandated, by adding Richton and expanding two existing sites. Richton was chosen because it is less vulnerable to hurricanes but close to a major pipeline system and the Gulf of Mexico for easy oil deliveries.

But many locals are horrified the government may drain 50 million gallons of water a day from the Pascagoula River for five years to dissolve the salt in the caverns. The resulting brine is to be carried away in a pipeline -- which the Energy Department admits will probably leak many times -- and dumped into the Gulf of Mexico not far from the state's coastline.

Many area residents feel they were left in the dark about the project after the Energy Department held public hearings on the storage site about 110 miles away in the state capital of Jackson shortly after Katrina hit.

"Very few people knew about the hearings," said Becky Stowe, director of stewardship for the Mississippi chapter of the Nature Conservancy. "People down here didn't have phones" after the hurricane, she said.

WERE STUDIES DONE?

Stowe said the Nature Conservancy, which protects land near the salt caverns, hasn't taken a position on the site but it is worried the government has not carried out the proper studies.

DOE spokeswoman Megan Barnett said the department conducted an extensive review of the Richton site and "will ensure environmental and ecological protections" are in place.

Still, facing a citizen rebellion and several concerned Mississippi lawmakers, the Energy Department last month said it would conduct another review of the storage site and hold a new round of public meetings which will start next week. This time the meetings will be closer to Richton.

Much of the environmental concerns about the project center on taking the 50 million gallons a day from the Pascagoula River. The river is home to endangered species, flows at low levels at certain times and is already used by industries.