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America Must Build More Natural Gas Storage Capacity





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The skyline of Pittsburgh, Pa. At night. (AP Photo / Genme Pushkar)

ASSOCIATED PRESS

Lack Of New Natural Gas Storage Capacity [1[ads1]9659004] Natural gas of course is & nbsp; more our go-to fuel to grow the economy, reduce greenhouse gas & nbsp; emissions, backup wind and solar, and be our essential energy source to export to a mostly poor and energy-deprived world. [19659005] This ongoing US " Dash to Gas " make a known necessity for us: we need more geological sites to meet the ebb and flow of demand.

Since the revolution took flight in 2008, US natural gas prices have been low and stable (see Figure below).

While this is great for American families and businesses, it is building new gas storage capacity less of a priority.

Literally, this reduced gas storage incentive has been the only negative of the US shale tree [1 9459018]

 

But, not building new storage capacity has been a logical decision.

Storage facilities are a primary tool for mitigate price risks and used by pipelines to maintain operational flexibility and system balance.

The & nbsp; spikes in pricing , especially in the cold winter months when demand spikes, have greatly subsided.

A flatter price trend makes it harder for storage operations to make money, a business that is about " buying low and selling high when prices go up . "

As a result, almost all new storage projects and capacity expansions have been delayed or canceled.

US natural gas prices have been low and stable in the shale boom era since 2008.

Photo Credit: EIA

Meanwhile, U.S. natural gas production and use continue to surge to record heights every year (see figure below).

The constant reality for the U.S. gas market and prices is record production colliding with record consumption.

In the Shale-Era since 2008, U.S. gas production has increased 60%, demand is up nearly 35%, yet gas storage capacity has grown just 14%.

natural gas production and demand have surged but our capacity to big gas has not.

Data source: EIA; JTC

Wind And Solar Are Intermittent

Perhaps our most fundamental energy fact is that & nbsp; natural gas will continue to play a central role in the U.S. electric power system

That's because & nbsp; as we continue to seek ways to cut greenhouse gas emissions, the harsh reality for some is that wind and solar are intermittent sources of power, unavailable & nbsp; most of the time (capacity factors only around 30 % even on good days.]

It's something that can be simply deleted: the intermittency of renewable generation will require flexible, fast-ramping generation.

As such, the obvious requirement to backup these renewables & nbsp; was, and will continue to be, very flexible, economical natural gas peaking plants.

Natural Gas Is The Flexibility Needed For More Wind And Solar. "

be what provides electrical grid reliability, namely via load and generation profile followings, frequency regulation, backup power, and spinning reserves.

Obviously, battery storage is growing in importance, but these systems do not support the & nb sp; full range of flexibility needed, including for seasonal and daily variations.

Thus, batteries cannot displace gas-fired generation, which is uniquely suited to the intermittency of renewables.

It's no wonder then that EIA says gas will be available at 235,000 megawatts .

For perspective, this is a whopping 10 times more than what onshore wind will give us.

This all means that we are actually in the early stages of unprecedented growth in natural gas being produced and used in the US (see figure below).

So, our power system itself could easily face severe & nbsp; built for the electricity sector.

For reference, depleted fields account for over 80% of working gas storage capacity.

natural gas production and demand are expected to continue to surge.

Data source: EIA; JTC

Rising Gas Exports

Besides the shale revolution itself, our LNG export boom to the world is probably the most transformative change for the U.S. gas market in its history

This is a new dynamic that really kicked off back in February 2016, and we will be the third largest seller this year and lead the market by 2024.

It will be U.S. suppliers along the Gulf Coast that will be called upon to support potential global supply disruptions.

This will surely extend utilization of the region's storage facilities. winters in Asia that need gas for heating), & nbsp; the boom in exports will & nbsp; add a variability to the market that more US gas storage will need to buffer

In other words, there will be even greater portions of U.S. demand (and remember that exports are a baseload demand market) that cannot be predicted regularly

This will make it harder on producers to plan ahead of time, making gas storage even more crucial to our market.

Without new gas storage capacity, our market could tightly and needlessly tighten

Moreover, exports will be seasonal, making new capacity that much more vital.

In total , LNG exports are the driving force behind what could be ~ 25 Bcf / d increase in US gas demand over the next six to eight years.

And we should be encouraging all of this: gas exports offer us massive & nbsp; economic, environmental, and security benefits for us.

US. natural gas exports are a moral imperative, helping and overcoming worldly access to modern energy while also reducing greenhouse emissions.

" COP21 Means More Natural Gas and the U.S. Must Help "

In particular, as a newer major player in our gas market, Appalachia (WV. OH, PA), now producing nearly 40% of our gas, must see major new investments to not just build more pipelines but also to build the gas storage sites to meet the growing needs of Appalachia itself and the other states and even countries that are increasingly relying on it.

The good news?

The US Government is wisely prioritizing the gas storage issue: " "

. & nbsp;

">

The skyline of Pittsburgh, Pa. At night. (AP Photo / Genme Pushkar)

ASSOCIATED PRESS

Lack Of New Natural Gas Storage Capacity

Natural gas of course is our go-to fuel to grow the economy, reduce greenhouse gas emissions, backup wind and solar, and be our essential energy source to export to mostly poor and energy-deprived world.

This ongoing US "Dash to gas "we need more geological sites to large natural gas to meet the ebb and flow of demand.

Since the shale revolution took flight in 2008, US natural gas prices have remained low and stable ( see Figure below.

While this is great for American families and businesses, it's made building new gas storage capacity less of a priority.

Literally, this reduced incentive for gas storage has been the only negative of the US shale boom

But, not building new storage capacity h

Storage facilities are a primary tool for mitigate price risks and used by pipelines to maintain operational flexibility and system balance.

The spikes in pricing, particularly in the cold winter months when demand spikes, have greatly subsided

A flatter price trend makes it harder for storage operations to make money, a business that is about "buying low and selling high when prices go up."

As a result, almost all pending new storage projects and capacity expansions have been delayed or canceled.

US natural gas prices have been low and stable in the shale boom era since 2008.

Photo Credit: EIA

Meanwhile, U.S. natural gas production and use continue to surge to record heights every year (see figure below).

The constant reality for the U.S. gas market and prices is record production colliding with record consumption.

Our domestic usage comes from more power and industrial demand mostly. gas production has increased 60%, demand is up nearly 35%, yet gas storage capacity has grown just 14%.

natural gas production and demand have surged but our capacity to big gas has not.

Data source: EIA; JTC

Wind And Solar Are Intermittent

Perhaps our most fundamental energy fact is that natural gas will continue to play a central role in the U.S. electric power system

That's because we continue to seek ways to cut greenhouse gas emissions, the harsh reality for some is that wind and solar are intermittent sources of power, unavailable most of the time (capacity factors only around 30% even on good days.]

It is something that can be simply removed: the intermittency of renewable generation will require flexible, fast-ramping generation.

Continued to be very flexible, economical natural gas peaking plants.

"Natural Gas Is The Flexibility Needed For More Wind And Solar." regulation, backup power, and spinning reserves.

Obviously, battery storage is growing in importance, but these systems do not fully support the full range of flexibility needed, including for seasonal and da ily variations.

Thus, batteries cannot displace gas-fired generation, which is uniquely suited to mitigate the intermittency of renewables.

It's no wonder then that EIA says gas will be delivered the most amount of incremental capacity in the coming decades, at 235,000 megawatts.

For perspective, this is a whopping 10 times more than what onshore wind will give us.

All this means that we are actually in the early stages of unprecedented growth in natural gas being produced and used in the US (see figure below)

So, our power system itself could easily face severe supply constraints if no incremental infrastructure is built

gas.

For reference, depleted fields account for over 80% of working gas storage capacity.

US natural gas production and demand are expected to continue to surge.

Data source: EIA; JTC

Rising Gas Exports

Besides the shale revolution itself, our LNG export boom to the world is probably the most transformative change for the U.S. gas market in its history

This is a new dynamic that really kicked off back in February 2016, and we will be the third largest seller this year and lead the market by 2024.

It will be U.S. suppliers along the Gulf Coast that will be called upon to support potential global supply disruptions.

This will surely extend utilization of the region's storage facilities.

As our LNG suppliers are forced to react to international events (eg, freezing cold winters in Asia that need gas for heating), the boom in exports will add a variability to the market that more US gas storage will need to buffer

In other words, there will be even greater portions of U.S. demand (and remember that exports are a baseload demand market) that cannot be predicted regularly

This will make it harder on producers to plan ahead of time, making gas storage even more crucial to our market.

Without new gas Storage capacity, our market could tightly (and needlessly) tighten

Moreover, exports will be seasonal, making new capacity more vital.

In total, LNG exports are the driving force behind what could be ~ 25 Bcf / d increase in US gas demand over the next six to eight years.

And we should be encouraging all of this: gas exports to us massive economic, environmental and security benefits for us. natural gas exports are a moral imperative, helping and overcoming worldly access to modern energy while also reducing greenhouse emissions.

"In particular, as a newer major player in our gas market, Appalachia (WV. OH, PA), now producing nearly 40% of our gas, must see major new investments to just build more pipelines but also to build the gas storage sites to meet the growing needs of Appalachia itself and the other states and even countries that are increasingly relying on it.

The good news?

The US Government is wisely prioritizing the gas storage issue: "Secretary Perry Announces Appalachian Ethane Storage Hub Report."

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