Thursday, August 27, 2009

Gas Storage Capacity Increases (but so Does Gas in Storage)

The Wall Street Journal reported yesterday (link good for seven days) that the Energy Information Administration released a report saying that as of April 2009 the U.S. has increased natural gas storage capacity by 100 Bcf over the past year.  This news comes as the gas industry is starting to openly discuss the possibility that storage capacity might max out this fall.

The storage capacity increase came from expanding existing caverns and adding new facilities.  One of the issues the article points out is that the location of the facilities is important.  Storage in the ten southern producing states is at 94% capacity.  If the excess storage capacity is on the other side of the country, there might be a transportation issue.

100 billion cubic feet sounds like a lot, but when you realize that over the past two weeks 106 Bcf was injected into storage, it sounds like a lot less.

This week's storage injection was 54 Bcf.  But this is the traditional storage injection period, so the amount in storage this week versus the five year average actually delcined to 18.8% vs. 21.3% last week.  Not exactly good news, but it's less bad.

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