The demand for natural gas fluctuates in the United States and other countries where it is used for heating in colder months (November through March). A colder-than-normal winter or a severe cold snap can cause supply shortages that raise prices. When natural gas production is higher than natural gas consumption (April through October), it can be placed into storage and later extracted when needed. Natural gas storage enables supply to match demand on any given day throughout the year by adjusting to daily and seasonal fluctuations in demand while natural gas production remains relatively constant year-round.1
Natural gas is stored underground in three reservoir types.2 More than 80% of underground storage in the United States is in depleted oil and gas reservoirs that are repurposed former production fields emptied of their economically recoverable oil or gas. The natural gas is compressed to high pressures to facilitate its injection into the reservoir.
Salt caverns are created when a hole is drilled into a salt deposit, typically to a depth of 1,000 to 1,600 meters, and water is injected to dissolve the salt and create a cavern. The saltwater mixture is then extracted, leaving a large cavern space for storing gas. Most salt cavern storage facilities are built in geologic formations called salt domes located in the Gulf Coast states.
An aquifer is a permeable body of rock, sand, or gravel that holds groundwater. An aquifer is suitable for gas storage if the water-bearing sedimentary rock formation is overlaid with an impermeable cap rock. Aquifers are appropriate for gas storage only if the aquifer is not used for producing water for households, farms, industries, or municipalities.
Leading oil and gas-producing states such as Texas and Louisiana have large underground storage capacities due to the large number of depleted reservoirs and geology favorable to the construction of salt caverns. Michigan has many old, depleted reservoirs that are ideal for storage. Illinois has aquifers that are naturally suitable for gas storage because they are capped by impermeable rock layers (such as shale) that prevent the stored gas from escaping.
Weekly changes in underground storage reveal a distinct annual cycle and the impact of cold weather. Gas is injected into storage during the low-demand period that typically runs from April to October to build storage capacity for the winter. Gas is withdrawn during the high-demand period that typically runs from November to March to meet heating demand in households and the commercial and industrial sectors.
Winter 2011-2012 was the fourth warmest winter on record in the contiguous United States. The quantity of gas in underground storage declined by about 16%. The 2013-2014 winter was significantly colder than average, particularly in the central and eastern parts of the country. The quantity of gas in underground storage declined by about 78% due to higher fuel demand for heating.
1 American Petroleum Institute, “Natural gas storage,” accessed December 1, 2024, https://www.energyinfrastructure.org/energy-101/natural-gas-storage
2 Federal Energy Regulatory Commission, “Natural Gas Storage – Storage Fields,” accessed December 2, 2024, https://www.ferc.gov/industries-data/natural-gas/overview/natural-gas-storage/natural-gas-storage-storage-fields
