|Valves at a Natural Gas Storage
|Source: Duke Energy
Gas Transmission Canada
Natural 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
the winter, partly because it 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 the 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 and the like). Natural gas in storage
also serves as insurance against any unforeseen accidents,
natural disasters, or other occurrences that may affect
the production or delivery of natural gas.
Natural gas storage plays a vital role in maintaining
the reliability of supply needed to meet the demands
of consumers. Historically, when natural gas was a regulated
commodity, storage was part of the bundled product sold
by the pipelines to distribution utilities. This all
changed in 1992 with the introduction of the Federal
Energy Regulatory Commission's (FERC) Order 636,
which opened up the natural gas market to deregulation.
Essentially, this meant that where natural gas storage
was required prior to Order 636 for the operational
requirements of the pipelines in meeting the needs of
the utilities, it is now available to anyone seeking
storage for commercial purposes or operational requirements.
Storage used to serve only as a buffer between transportation
and distribution, to ensure adequate supplies of natural
gas were in place for seasonal demand shifts, and unexpected
demand surges. Now, in addition to serving those purposes,
natural gas storage is also used by industry participants
for commercial reasons; storing gas when prices are
low, and withdrawing and selling it when prices are
high, for instance. The purpose and use of storage has
been closely linked to the regulatory environment of
the time. To learn more about the history of regulation
and the current regulatory environment, including the
effect on natural gas storage, click here.
According to the Energy
Information Administration (EIA), as of 2000 there
was 3.899 Trillion cubic feet (Tcf) of working gas storage
capacity in the United States. To learn more about the
current uses of storage, including statistics and forecasts
relating to natural gas storage, click here.
Base Load vs. Peak Load Storage
There are basically two uses for natural gas in 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 storage capacity is used to meet
seasonal demand increases. 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 a 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 load storage
Peak load storage facilities, on the other hand, are
designed to have high-deliverability 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.
While base load facilities have long term injection
and withdrawal seasons, turning over the natural gas
in the facility about once per year, peak load facilities
can have turn over rates as short as a few days or weeks.
Salt caverns are the most common type of peak load storage
facility, although aquifers may be used to meet these
demands as well.
Natural gas is usually stored underground, in large
storage reservoirs. There are three main types of underground
storage: depleted gas reservoirs,
aquifers, and salt
caverns. In addition to underground storage, however,
natural gas can be stored as liquefied natural gas (LNG).
LNG allows natural gas to be shipped and stored in liquid
form, meaning it takes up much less space than gaseous
natural gas. To learn more about LNG, click here.
Types of Underground Storage
Underground natural gas storage fields grew in popularity
shortly after World War II. At the time, the natural
gas industry noted that seasonal demand increases could
not feasibly be met by pipeline delivery alone. In order
to meet seasonal demand increases, the deliverability
of pipelines (and thus their size), would have to increase
dramatically. However, the technology required to construct
such large pipelines to consuming regions was, at the
time, unattainable and unfeasible. In order to be able
to meet seasonal demand increases, underground storage
fields were the only option.
|Working Gas Capacity by Type
|Source: EIA - 'Natural
Gas Storage in the United States in 2001'
As mentioned, there are three main types of underground
natural gas storage facilities. Specific characteristics
of depleted reservoirs, aquifers, and salt caverns may
be found below. Essentially, any underground storage
facility is reconditioned before injection, to create
a sort of storage vessel underground. Natural gas is
injected into the formation, building up pressure as
more natural gas is added. In this sense, the underground
formation becomes a sort of pressurized natural gas
container. As with newly drilled wells, the higher the
pressure in the storage facility, the more readily gas
may be extracted. Once the pressure drops to below that
of the wellhead, there is no pressure differential left
to push the natural gas out of the storage facility.
This means that, in any underground storage facility,
there is a certain amount of gas that may never be extracted.
This is known as physically unrecoverable gas; it is
permanently embedded in the formation.
|Daily Deliverability by Type
|Source: EIA - 'Natural
Gas Storage in the United States in 2001'
In addition to this physically unrecoverable gas, underground
storage facilities contain what is known as 'base gas'
or 'cushion gas'. This is the volume of gas that must
remain in the storage facility to provide the required
pressurization to extract the remaining gas. In the
normal operation of the storage facility, this cushion
gas remains underground; however a portion of it may
be extracted using specialized compression equipment
at the wellhead.
'Working gas' is the volume of natural gas in the storage
reservoir that can be extracted during the normal operation
of the storage facility. This is the natural gas that
is being stored and withdrawn; the capacity of storage
facilities normally refers to their working gas capacity.
At the beginning of a withdrawal cycle, the pressure
inside the storage facility is at its highest; meaning
working gas can be withdrawn at a high rate. As the
volume of gas inside the storage facility drops, pressure
(and thus deliverability) in the storage facility also
decreases. Periodically, underground storage facility
operators may reclassify portions of working gas as
base gas after evaluating the operation of their facilities.
The graphs shown indicate the working gas capacity
and deliverability of natural gas storage facilities
in the U.S. as of 2001. It can be seen that depleted
reservoirs constitute the majority of working gas capacity
and deliverability. However, the high deliverability
of salt caverns is shown by the high daily deliverability
relative to working gas capacity.
Depleted Gas Reservoirs
The first instance of natural gas successfully being
stored underground occurred in Weland County, Ontario,
Canada, in 1915. This storage facility used a depleted
natural gas well that had been reconditioned into a
storage field. In the United States, the first storage
facility was developed just south of Buffalo, New York.
By 1930, there were nine storage facilities in six different
states. Prior to 1950, virtually all natural gas storage
facilities were in depleted reservoirs.
The most prominent and common form of underground storage
consists of depleted gas reservoirs. Depleted reservoirs
are those formations that have already been tapped of
all their recoverable natural gas. This leaves an underground
formation, geologically capable of holding natural gas.
In addition, using an already developed reservoir for
storage purposes allows the use of the extraction and
distribution equipment left over from when the field
was productive. Having this extraction network in place
reduces the cost of converting a depleted reservoir
into a storage facility. Depleted reservoirs are also
attractive because their geological characteristics
are already well known. Of the three types of underground
storage, depleted reservoirs, on average, are the cheapest
and easiest to develop, operate, and maintain.
The factors that determine whether or not a depleted
reservoir will make a suitable storage facility are
both geographic and geologic. Geographically, depleted
reservoirs must be relatively close to consuming regions.
They must also be close to transportation infrastructure,
including trunk pipelines and distribution systems.
While depleted reservoirs are numerous in the U.S.,
they are more abundantly available in producing regions.
In regions without depleted reservoirs, like the upper
Midwest, one of the other two storage options is required.
Geologically, depleted reservoir formations must have
high permeability and porosity. The porosity of the
formation determines the amount of natural gas that
it may hold, while its permeability determines the rate
at which natural gas flows through the formation, which
in turn determines the rate of injection and withdrawal
of working gas. In certain instances, the formation
may be stimulated to increase permeability. For information
on well treatment, click here.
In order to maintain pressure in depleted reservoirs,
about 50 percent of the natural gas in the formation
must be kept as cushion gas. However, depleted reservoirs,
having already been filled with natural gas and hydrocarbons,
do not require the injection of what will become physically
unrecoverable gas; that gas already exists in the formation.
Aquifers are underground porous, permeable rock formations
that act as natural water reservoirs. However, in certain
situations, these water containing formations may be
reconditioned and used as natural gas storage facilities.
As they are more expensive to develop than depleted
reservoirs, these types of storage facilities are usually
used only in areas where there are no nearby depleted
reservoirs. Traditionally, these facilities are operated
with a single winter withdrawal period, although they
may be used to meet peak load requirements as well.
Aquifers are the least desirable and most expensive
type of natural gas storage facility for a number of
reasons. First, the geological characteristics of aquifer
formations are not as thoroughly known, as with depleted
reservoirs. A significant amount of time and money goes
into discovering the geological characteristics of an
aquifer, and determining its suitability as a natural
gas storage facility. Seismic testing must be performed,
much like is done for the exploration of potential natural
gas formations. The area of the formation, the composition
and porosity of the formation itself, and the existing
formation pressure must all be discovered prior to development
of the formation. In addition, the capacity of the reservoir
is unknown, and may only be determined once the formation
is further developed.
In order to develop a natural aquifer into an effective
natural gas storage facility, all of the associated
infrastructure must also be developed. This includes
installation of wells, extraction equipment, pipelines,
dehydration facilities, and possibly compression equipment.
Since aquifers are naturally full of water, in some
instances powerful injection equipment must be used,
to allow sufficient injection pressure to push down
the resident water and replace it with natural gas.
While natural gas being stored in aquifers has already
undergone all of its processing, upon extraction from
a water bearing aquifer formation the gas typically
requires further dehydration prior to transportation,
which requires specialized equipment near the wellhead.
Aquifer formations do not have the same natural gas
retention capabilities as depleted reservoirs. This
means that some of the natural gas that is injected
escapes from the formation, and must be gathered and
extracted by 'collector' wells, specifically designed
to pick up gas that may escape from the primary aquifer
In addition to these considerations, aquifer formations
typically require a great deal more 'cushion gas' than
do depleted reservoirs. Since there is no naturally
occurring gas in the formation to begin with, a certain
amount of natural gas that is injected will ultimately
prove physically unrecoverable. In aquifer formations,
cushion gas requirements can be as high as 80 percent
of the total gas volume. While it is possible to extract
cushion gas from depleted reservoirs, doing so from
aquifer formations could have negative effects, including
formation damage. As such, most of the cushion gas that
is injected into any one aquifer formation may remain
unrecoverable, even after the storage facility is shut
down. Most aquifer storage facilities were developed
when the price of natural gas was low, meaning this
cushion gas was not very expensive to give up. However,
with higher prices, aquifer formations are increasingly
expensive to develop.
All of these factors mean that developing an aquifer
formation as a storage facility can be time consuming
and expensive. In some instances, aquifer development
can take 4 years, which is more than twice the time
it takes to develop depleted reservoirs as storage facilities.
In addition to the increased time and cost of aquifer
storage, there are also environmental restrictions to
using aquifers as natural gas storage. In the early
1980's the Environmental
Protection Agency (EPA) set certain rules and restrictions
on the use of aquifers as natural gas storage facilities.
These restrictions are intended to reduce the possibility
of fresh water contamination. To learn more about the
Underground Injection Control program at the EPA, click
Underground salt formations offer another option for
natural gas storage. These formations are well suited
to natural gas storage in that salt caverns, once formed,
allow little injected natural gas to escape from the
formation unless specifically extracted. The walls of
a salt cavern also have the structural strength of steel,
which makes it very resilient against reservoir degradation
over the life of the storage facility.
Essentially, salt caverns are formed out of existing
salt deposits. These underground salt deposits may exist
in two possible forms: salt domes, and salt beds. Salt
domes are thick formations created from natural salt
deposits that, over time, leach up through overlying
sedimentary layers to form large dome-type structures.
They can be as large as a mile in diameter, and 30,000
feet in height. Typically, salt domes used for natural
gas storage are between 6,000 and 1,500 feet beneath
the surface, although in certain circumstances they
can come much closer to the surface. Salt beds are shallower,
thinner formations. These formations are usually no
more than 1,000 feet in height. Because salt beds are
wide, thin formations, once a salt cavern is introduced,
they are more prone to deterioration, and may also be
more expensive to develop than salt domes.
Once a suitable salt dome or salt bed deposit is discovered,
and deemed suitable for natural gas storage, it is necessary
to develop a 'salt cavern' within the formation. Essentially,
this consists of using water to dissolve and extract
a certain amount of salt from the deposit, leaving a
large empty space in the formation. This is done by
drilling a well down into the formation, and cycling
large amounts of water through the completed well. This
water will dissolve some of the salt in the deposit,
and be cycled back up the well, leaving a large empty
space that the salt used to occupy. This process is
known as 'salt cavern leaching'.
Salt cavern leaching is used to create caverns in both
types of salt deposits, and can be quite expensive.
However, once created, a salt cavern offers an underground
natural gas storage vessel with very high deliverability.
In addition, cushion gas requirements are the lowest
of all three storage types, with salt caverns only requiring
about 33 percent of total gas capacity to be used as
Salt cavern storage facilities are primarily located
along the Gulf Coast, as well as in the northern states,
and are best suited for peak load storage. Salt caverns
are typically much smaller than depleted gas reservoirs
and aquifers, in fact underground salt caverns usually
take up only one one-hundredth of the acreage taken
up by a depleted gas reservoir. As such, salt caverns
cannot hold the volume of gas necessary to meet base
load storage requirements. However, deliverability from
salt caverns is typically much higher than for either
aquifers or depleted reservoirs. Therefore natural gas
stored in a salt cavern may be more readily (and quickly)
withdrawn, and caverns may be replenished with natural
gas more quickly than in either of the other types of
storage facilities. Moreover, salt caverns can readily
begin flowing gas on as little as one hour's notice,
which is useful in emergency situations or during unexpected
short term demand surges. Salt caverns may also be replenished
more quickly than other types of underground storage
Location of Natural Gas Storage Facilities
|Underground Storage Facilities
in the United States
|Source: EIA - Form
EIA-191, 'Monthly Underground Storage Report'
Storage facilities are most concentrated in the consuming
north east region of the country, but can be found nationwide.
For a summary of natural gas storage facilities by state,
to see the EIA's storage statistics.
To learn more about natural gas storage in general,
to visit the Gas Technology Institute.
to visit the Energy Information Administration's website,
and view the most recent statistics and forecasts related
to natural gas storage.
Click here to
learn about the business aspects of natural gas storage,
including links to the most recent storage statistics,
the number of facilities, and their capacity.
Now that natural gas storage has been discussed, click
here to learn about natural
gas distribution systems.