The value of underground storage in today`s natural gas industry

The report consists of three chapters and four appendices. Chapter 1 provides basic information on the role of storage in today`s marketplace where natural gas is treated as a commodity. Chapter 2 provides statistical analyses of the relationship between storage and spot prices on both a monthly and daily basis. For the daily analysis, temperature data were used a proxy for storage withdrawals, providing a new means of examining the short-term relationship between storage and spot prices. Chapter 3 analyzes recent trends in storage management and use, as well as plans for additions to storage capacity. It also reviews the status of the new uses of storage resulting from Order 636, that is, market-based rates and capacity release. Appendix A serves as a stand-along primer on storage operations, and Appendix B provides further data on plans for the expansion of storage capacity. Appendix C explains recent revisions made to working gas and base gas capacity on the part of several storage operators in 1991 through 1993. The revisions were significant, and this appendix provides a consistent historical data series that reflects these changes. Finally, Appendix D presents more information on the regression analysis presented in Chapter 2. 19 refs., 21 figs., 5 tabs