A new report from the American Gas Association (AGA) has sounded the alarm on the rapidly growing need for expanded natural gas storage capacity across the United States.
The report, titled “Assessing the Value of Natural Gas Storage: A Strategic Asset for Grid Reliability, System Resilience and Operational Flexibility in a Changing Energy Landscape,” highlights critical pressures building on the nation’s natural gas infrastructure due to an unprecedented surge in energy demand.
According to the AGA, this escalating demand is being fueled by several key factors, including the booming growth of energy-intensive data centers and a significant resurgence in American manufacturing.
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The report highlights that the current pace of underground natural gas storage capacity growth, which has slowed to just 0.1% annually, is drastically insufficient to meet these emerging needs.
Karen Harbert, President and CEO of the AGA, emphasized the urgency of the situation. “America’s natural gas system requires expanded storage capacity that is flexible and responsive to help enable our system to reliably meet increasing demand from power generation, data centers and a reshoring of American manufacturing,” she stated. “Over the past few years, natural gas production, pipeline capacity and demand have all grown significantly while underground storage capacity has remained largely flat. Despite the proven value of natural gas storage facilities to the energy system, several structural and regulatory challenges continue to limit the system’s overall effectiveness.”
The report cautions that without swift action from policymakers, the nation risks potential service interruptions during extreme weather events, significant price spikes for consumers, and negative impacts on the reliability of the electric grid, particularly as it integrates increasing amounts of variable renewable energy sources.
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Richard Meyer, AGA Vice President, Energy Markets, Analysis and Standards, echoed this concern, stating, “Market fundamentals are signaling the need for proactive storage expansion. Domestic natural gas consumption is surging in response to increased industrial activity and power demand – and with the rollout of AI in our daily lives and economy, that demand is only set to grow. Despite this, outside of the South Central, Mountain and East regions, we’re not seeing the new storage projects we need to meet this escalating demand.”
The AGA report outlines several recommendations for policymakers to address this looming challenge:
- Targeted Expansion: Strategic investments in new underground and Liquefied Natural Gas (LNG) storage facilities are crucial, particularly in high-demand regions where capacity utilization is consistently high (at or above 90 percent). These investments should align with increasing residential, industrial, and power sector needs.
- Faster, Clearer Project Approvals: The lengthy timelines for developing storage projects need to be addressed through regulatory clarity and streamlined permitting processes. This will allow beneficial projects to move forward more efficiently.
- Improved Integration with Energy Planning: Natural gas storage needs to be included in broader state and regional energy discussions related to reliability, clean energy, and infrastructure planning to ensure its availability when needed, especially for grid flexibility.
- Recognition of Storage’s Full Value: Policymakers and energy markets should acknowledge the broader benefits of natural gas storage beyond economics, including its contributions to reliability, resilience, emergency preparedness, and consumer protection.
- Support for Low-Carbon Pathways: Expanding natural gas storage can support the transition to lower greenhouse gas emissions by enhancing energy system flexibility and enabling greater use of renewable natural gas. Existing storage facilities could also be adapted for future hydrogen storage.
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The AGA report paints a clear picture of an energy landscape facing significant strain and underscores the critical role that natural gas storage plays in ensuring a reliable, affordable, and secure energy future for the nation.
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