Environmental Engineering Reference
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transmission and distribution systems. Underground storage for natural gas
is used for balancing supply and demand over a defined period to compen-
sate for season-related (summer and winter) fluctuations to ensure that natu-
ral gas is available without delay for consumers (Beckman et al., 1995).
Without storage, production deliverability and pipeline capacity in the
United States and Canada would need to be greatly increased to meet
peak winter demand. As a result, storage provides significant incremental
value to the natural gas industry. Natural gas may be stored in several
different ways. It is most commonly held underground, under pressure,
in (1) depleted reservoirs in oil and/or gas fields, (2) aquifers, and (3) salt
cavern formations.
Each type has its own physical characteristics (porosity, permeability,
retention capability) and economics (site preparation costs, deliverability
rates, cycling capability) that govern its suitability to particular applications.
Two of the most important characteristics of an underground storage reser-
voir are its capability to hold natural gas for future use and the rate at which
gas can be withdrawn—its deliverability rate. The amount of gas in storage is
another factor influencing short-term gas prices. Hence, storage capacity and
usage are major concerns for the gas market.
Recent changes in the market for natural gas are altering the role and eco-
nomics of natural gas storage. The development of market hubs has increased
the importance of strategically located storage fields and expanded the types
of services available by storage providers. Changes in pipeline rate structures
and the increased importance of pipeline capacity discounting and capac-
ity release have changed the economics of many storage facilities. In addi-
tion, changes in demand, particularly the growth in gas demand for electric
generation, affect the overall load factors and significantly impact storage
requirements (Figure 8.1) (Energy and Environmental Analysis, 2000).
HistoricalDevelopmentofUndergroundNaturalGasStorage
The first recorded natural gas storage facility was a converted depleted gas
reservoir in Welland County, Ontario, Canada. The first storage field in the
United States began operation in 1916 at Zoar Field near Buffalo, New York;
it remains in service today. The success associated with providing additional
supplies during peak demands by storing gas during summers in a depleted
gas field made good sense to distributors and utilities in the Northeast, and
other fields were developed gradually.
After World War II, due to increasing demands for energy to fuel post-war
production and expansion, new, large diameter, long distance natural gas
pipelines were laid to connect supply areas of Oklahoma, Kansas, Louisiana,
and Texas to the large population centers of the Midwest and Northeast.
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