Design capacity declined to 4,712 trillion cubic feet in November 2018 from 4,725 tcf in November 2017. Demonstrated peak capacity, meanwhile, declined to 4,268 tcf during the five-year (2013-2018) period ended November 2018 from 4,317 tcf during the prior five-year (2012-2017) period. EIA said no new storage fields started operating in 2018 for a fifth year in a row, while a few fields became inactive.
It said several trends may be reducing the need for the construction of new underground storage, including higher levels of gas production in the Appalachia, Permian and Haynesville shale formations that reduced reliance on storage services for some customers. In addition, the difference in gas prices between the winter and summer has declined from more than $0.50 per million British thermal units within the last 10 years to less than $0.20/MMBtu for much of 2018, reducing economic incentives to store gas and invest in more storage infrastructure.
At the same time, energy firms have built more pipelines in recent years, allowing gas to flow more easily to end users and reducing past reliance on storage to meet winter peaks. Most utilities and other energy consumers buy gas when it is less expensive during the summer months, when demand is lower, and store it for the winter when heating demand spikes and prices are usually higher.
EIA, however, noted there were several trends that increased the need for additional storage, including rising US exports via pipeline to Mexico and the world via liquefied natural gas, and growing use of gas-fired plants to generate power. EIA said electric sector gas consumption and total gas consumption both reached their highest annual levels in 2018. In the West, California faces ongoing issues related to infrastructure and storage limitations, as well as regulatory issues, largely as a result of the Aliso Canyon storage facility leak in late 2015.