Assessing the Value of Natural Gas Storage
New research shows that surging demand for energy has created an urgent need for more natural gas storage. In Assessing the Value of Natural Gas Storage: A Strategic Asset for Grid Reliability, System Resilience and Operational Flexibility in a Changing Energy Landscape, emerging pressures on natural gas infrastructure are highlighted because of rapidly increasing demand for energy, including from data centers and a resurgence of American manufacturing.
The report presents several recommendations for policymakers looking to address this emerging issue:
- Targeted Expansion: Storage capacity is nearing practical limits in several high-demand regions. Strategic investments in new underground and LNG facilities will be essential, particularly where capacity utilization averages at or above 90 percent. These investments should align with increasing residential loads, heightened industrial consumption and power sector needs.
- Faster, Clearer Project Approvals: Storage projects require years to progress from concept to completion. Regulatory clarity and streamlined permitting can help eliminate bottlenecks and allow projects that provide broad system benefits to move forward more efficiently.
- Improved Integration with Energy Planning: Storage is not always included in broader discussions about reliability, clean energy, or infrastructure planning. Incorporating natural gas storage in state and regional energy plans will help ensure its availability when needed, particularly as grid flexibility becomes increasingly important.
- Recognition of Storage’s Full Value: Storage offers more than economic returns; it contributes to reliability, resilience, emergency preparedness and consumer protection. These broader benefits should be acknowledged in terms of how storage is valued in policy, regulation and energy markets.
- Support for Low-Carbon Pathways: Current and future natural gas storage expansion supports and enables pathways to lower greenhouse gas emissions. By enhancing energy system flexibility, storage facilitates the growth of renewable energy. Underground storage facilities can be utilized for renewable natural gas storage, enabling greater seasonal use. Additionally, natural gas storage could be repurposed for hydrogen-ready capabilities in future scenarios.
