In the energy industry, we talk about natural gas storage a lot. It’s a term that frequently comes up in articles, we include it every week in our APPI Energy Advisor, and power markets rise and fall based on the weekly report submitted by the U.S. Energy Information Administration (EIA). However, we rarely discuss what natural gas storage actually entails, how it is measured, and who controls it. In this article, we’ll discuss what natural gas storage means, why it is important, and how APPI Energy utilizes that info to better serve our clients.
The basic principle of natural gas storage is, at its core, the principle of supply and demand. We store natural gas during periods when demand is low (for example, when the weather is mild), to be withdrawn during periods of peak demand. However, these are not the only factors in play, when it comes to storage. Regulatory concerns, contractual obligations, emergency reserves, a…