Natural gas design capacity in the U.S. has increased slightly, driven by expansions in the East. Design capacity of underground natural gas storage facilities was nearly the same in most storage in November 2017 compared with November 2016, with the exception of the East, where it increased by 29%, or 30 billion cubic feet (Bcf) as a result of several significant expansions to existing facilities. Design capacity in each of the other regions changed by 1% or less. Nationally, design capacity rose by 0.7%, or 34 Bcf, between November 2016 and November 2017, increasing to 4,725 Bcf.

Design capacity is the sum of the working gas capacity for all active facilities in the Lower 48 states as of November 2017 Design capacity is based on the physical characteristics of the reservoir, installed equipment, and operating procedures specific to the site.

Market conditions in this period were similar to those in the previous period. In 2017, for the fourth consecutive year, no new underground storage facilities began operation, while ten facilities expanded by 1 Bcf or more. Since 2015, winter natural gas prices in the U.S. have trended flatter than in previous years, reducing the incentive for storage. 

Overall higher levels of natural gas production relative to a few years ago make supplies of natural gas more readily available to consumers. Production growth was mainly in shale gas production, particularly in the Northeast near several large population centres, reducing reliance on natural gas transported from the Gulf Coast.

The trend toward more natural gas-fired electricity generation continues, as natural gas-fired generation capacity has replaced some coal and nuclear generation capacity in recent years. However, natural gas-fired generation was down 7% in 2017 compared with 2016 because of mild summer weather, elevated natural gas prices, and higher levels of generation from renewables.

Design capacity in the East grew as a result of several significant capacity expansions, but no new fields were developed. Columbia Gas Transmission’s Weaver/Clinton field in Ohio expanded by 12 Bcf in June 2017, accounting for a large share of the regional capacity increase. In total, seven facilities in the East each expanded by 1 Bcf or more. Net capacity in the region grew despite two small facilities becoming inactive in the region in 2017.

Four separate projects in the state each expanded by 2 Bcf or more. The only two facilities that became inactive in 2017 were also located in Ohio, but their total capacity was less than 0.5 Bcf. Capacity in West Virginia increased by 8 Bcf, or 3%. West Virginia saw the capacity of six facilities expand in 2017, two of which expanded by more than 1 Bcf. In percentage terms, Arkansas saw the biggest change in capacity, decreasing by 27%, but the actual decrease was only 3 Bcf. The decrease occurred at Black Hills Energy’s Lone Elm/Henson Sand facility, one of only two storage facilities in the state.

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4th April 2018

4th April 2018