Saving for a Cold Winter Day
A breakdown of the storage process, and the effects that recent cold spells have played in the lifecycle of natural gas.

N atural gas, like most other commodities, can be stored for an indefinite period of time. The exploration, production, and transportation of natural gas takes time, and the natural gas that reaches its destination is not always needed right away, so it is injected into underground storage facilities. These storage facilities can be located near market centers that do not have a ready supply of locally produced natural gas.

Traditionally, natural gas has been a seasonal fuel. That is, demand for natural gas is usually higher during winter, partly because it6 is used for heat in residential and commercial settings. Stored natural gas plays a vital role in ensuring that any excess supply delivered during the summer months is available to meet the increased demand of the winter months. However, with recent trend towards natural gas fired electric generation, demand for natural gas during the summer months is now increasing (due to the demand for electricity to power air conditioners as well as other domestic applications). Natural gas in storage also serves as insurance against any unforeseen accidents, natural disasters, or other occurrences that may affect the production or disrupt the delivery of natural gas.

The efficient and effective movement of natural gas from producing regions to consumption regions requires an extensive and elaborate transportation system. In many instances, natural gas produced from a particular well will have to travel a great distance to reach its point of use. The transportation system for natural gas consists of a complex network of pipelines, designed to quickly and efficiently transport natural gas from its origin, to areas of high natural gas demand.

Transportation of natural gas is closely linked to its storage as well. Should the natural gas being transported not be required at that time, it can be put into storage facilities: meeting base load requirements, and meeting peak load requirements. As mentioned, natural gas storage is required for two reasons: meeting seasonal demand requirements, and as insurance against unforeseen supply disruptions. Base load facilities are capable of holding enough natural gas to satisfy long term seasonal demand requirements.

Typically, the turn-over rate for natural gas in these facilities is 1 year. Natural gas is generally injected during the summer (non-heating season), which usually runs from April through October, and withdrawn during the winter (heating season), usually from November to March. These reservoirs are larger, but their delivery rates are relatively low, meaning the natural gas that can be extracted each day is limited. Instead, these facilities provide a prolonged, steady supply of natural gas. Depleted gas reservoirs are the most common type of base storage facility.

Peak load storage facilities, on the other hand, are designed to have a high rate of distribution for short periods of time, meaning natural gas can be withdrawn from storage quickly should the need arise. Peak load facilities are intended to meet sudden, short-term demand increases. These facilities cannot hold as much natural gas as base load facilities; however, they can deliver smaller amounts of gas more quickly, and can also be replenished in a shorter amount of time than base load facilities. The approximately 400 underground natural gas storage facilities located strategically throughout the United States are key to maintaining the reliability, integrity and capability of the Nation’s natural gas transmission and distribution network. At the end of 2005, 394 underground natural gas storage facilities were operational in the lower 48 states. Consequently, the total level of U.S. underground natural gas and working gas capacity, fluctuated within a relatively narrow range during the period (8.18 trillion cubic feet (tcf) in 1998, 8.42 tcf in 2001 and 8.26 tcf in 2005), finishing with about a 1-percent overall net increase.

Data Source: Energy Information Administration