Got Gas? PA Storage Sites in Short Supply

The price of Natural Gas on the NYMEX was down to $9.32 on Friday. Not a big deal, still a few dollars above its ten year average, but interesting when you consider it means gas companies will have to store even more gas to ride out this slightly protracted dip in prices. So where, and how, is natural gas being stored?

Sixty-five underground gas storage fields exist in 23 counties in Pennsylvania today. Storage reservoirs are depleted natural gas reservoirs or bodies of rock whose geological and engineering characteristics would have made them ideal reservoirs had natural gas been present. Gas is stored in large quantities in the summer months and withdrawn for sale in the winter months. SOURCE: PA DEP

Turns out Pennsylvania has more underground natural gas storage caverns than any of the 48 states in the continental U.S. [SOURCE: Energy Information Administration, US Department of Energy] By their estimate, our state currently maintains a overall working capacity of 406 Billion cubic feet (Bcf), which includes storage in depleted gas/oil fields. That’s a lot of gas.

In June at the Academy of Natural Sciences in Philadelphia, when asked about limited number of frack waste disposal sites in Pennsylvania, DEP Secretary Krancer said, “There are no more suitable sites for injection, they are all being used for storage.”

Yet the demand for storage in Pennsylvania continues to expand as drillers strive to meet their need to drill deep and sell high. One of the latest locations eyed for storage is Bedford County, PA, home of the historic Bedford Springs. In Bedford Springs, there is a luxurious, historic Grand Hotel, The Inn at Bedford Springs. It was recently treated to a sumptuous, inside-out restoration by the Texas-based hotel chain, Omni.

It was at Bedford Springs where the first telegram in the United  States was received by President Buchanan, who was not only a native to the region, but was also the only U.S. President born in Pennsylvania. The telegram, a perfect facsimile of which is on display in the lobby, was sent along the newly laid Transatlantic Cable by none other than Queen Victoria herself.

Bedford County has a long tradition of being at the heart of region’s breadbasket, too. If the Bedford County Chamber of Commerce magazine found in our lavish, high-ceilinged hotel room is to be believed, the region is seeing a resurgence of small-to-midsize, gourmet food producers. Dairy farmers and bicycle builders do very well there, too, thank you!
The highlight of the Inn at Bedford Springs is the spring-fed, faithfully restored Victorian Indoor Swimming Pool. It’s a feature so pretty, couples often get married on the lawn nearby. This is one of those picturesque locations that holds you. It’s just lovely. In fact, the resort is so enchanting, Buchanan’s rather staid niece, and the bachelor president’s occasional hostess, was chided for being too much the social butterfly while visiting. (You can read that letter in the lobby, too.)

There are relatively fewer natural gas deposits beneath Bedford Country, which is just over the eastern edge of the Marcellus shale, but it is strategically located and Spectra Energy Corp., the gas pipeline services giant from Huston, is eager to store gas in a depleted reservoir there. They operate and own (mostly) two PA storage facilities already, and another in the nearby town of Accident, Maryland. I swear.

Storage According to Spectra:
The purpose of natural gas storage is primarily to meet seasonal demand. Gas is injected into storage during periods of low demand and withdrawn from storage during periods of peak demand. The most important type of gas storage is in underground reservoirs, consisting of depleted gas reservoirs and salt cavern reservoirs. Storing liquefied natural gas (LNG) is also critical in the energy chain. Depleted reservoirs are used as storage facilities by injecting natural gas back into the porous underground rock that once held the fuel before it was extracted. Salt is impermeable and self-sealing, so it creates exceptionally strong and environmentally sound storage. Salt caverns can extend more than 1,000 feet underground. In fact, their vertical height can be greater than a major skyscraper is tall. LNG is made by refrigerating natural gas to condense it into a liquid. The liquid form is denser than natural gas, so it has much more energy for the amount of space it occupies, making it an efficient storage solution for natural gas. SOURCE: spectraenergy.com

Get to Know Spectra Energy Corp.
Spectra Energy Corp (NYSE: SE) is a S&P 500 company headquartered in Houston, Texas, that operates in three key areas of the natural gas industry: transmission and storage, distribution, and gathering and processing. Spectra was formed in late 2006 from the spin-off from Duke Energy (NYSE: DUK). Spectra owns the Texas Eastern Pipeline (TETCo), a major natural gas pipeline which brings gas from the Gulf of Mexico coast in Texas to the New York City area. It is one of the largest pipeline systems in the United States. SOURCE: Wikipedia

Spectra Energy Corp employs approximately 5,500 people. Operations include approximately 19,100 miles of transmission pipeline stretching from Texas to Canada and 305 billion cubic feet (Bcf) of storage capacity in the United States and Canada. Spectra Energy’s wholly owned businesses include Texas Eastern Transmission; Algonquin Gas Transmission; Bobcat Gas Storage; Union Gas; BC Pipeline Division; BC Field Services Division; and Natural Gas Liquids Division. The company also has significant ownership interests in DCP Midstream, Maritimes & Northeast Pipeline, Gulfstream Natural Gas System and Spectra Energy Partners. Headquartered in Houston, Spectra Energy also has major offices in Waltham, Massachusetts; Calgary, Alberta; Chatham, Ontario; Denver, Colorado; Halifax, Nova Scotia; Midland, Texas; Nashville, Tennessee; Tulsa, Oklahoma; and Vancouver, British Columbia. SOURCE: spectraenergy.com

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