Evolution of Storage

Storage has been and continues to be an important element in the U. S. natu­ral gas supply portfolio. In the future, the value of storage will be driven by new market forces and paradigm shifts in the magnitude of short-term and seasonal gas price volatilities. The relative values of storage components will change. Seasonal storage capacity will become more valuable (wider mag­nitude of time spreads). Injection capacity also will become more valuable (reflecting need to balance large LNG vaporization send-out against vari­able and seasonal demand). Short-term deliverability may become less valu­able because of aggregate increases in short-term and peaking deliverability from new LNG storage/vaporization facilities. Gas storage will be utilized to maximize unconventional gas recovery—gas production does not see the gas market. Gas-fired peaking power generation requires instantaneous short term gas supplies. Gas storage can be utilized to balance loads for variable renewable energy projects. Production outages will be mitigated via offshore gas supplies, large gas plants, pipelines, and other advances. As much as 650 Bcf of new working gas capacity may be required by 2020 (see Table 8.1) (Energy and Environmental Analysis, 2000).

Updated: September 29, 2015 — 8:51 pm