Rising power demand across the United States is driving strong momentum to create a more reliable and affordable energy future. A new report from the American Gas Association (AGA) reinforces the critical role of natural gas storage in supporting this vision.

AGA’s report comes amidst major regulatory changes to back American energy and the broader energy supply chain. As industry leaders and policymakers continue to make headway towards U.S. energy dominance, the analysis makes a clear case that investment in natural gas storage will be necessary for the United States’ long term energy strategy, safeguarding consumers against volatility and supporting a resilient power grid.

Storage Is a Power Play

U.S. power demand is estimated to grow 25 percent from 2023 to 2030 and 78 percent by 2050, driven largely by artificial intelligence, data centers and a surge in domestic manufacturing. These industries require not just more electricity, but power that is available at demand. Natural gas storage helps make that possible.

Within the U.S. energy system, gas storage provides flexibility to deliver fuel sources around the clock to homes, business and power generators. This storage network includes underground storage, aquifers and salt caverns, liquified natural gas (LNG), and compressed natural gas (CNG) storage. That flexibility provides balance to consumer and businesses needs during peak demand while keeping price volatility at bay.

However, while natural gas production and pipeline capacity have expanded significantly in recent years, storage capacity has remained largely flat. In2024, U.S. natural gas pipelines increased takeaway capacity by 17.8 Bcf/d, while natural gas storage peak capacity rose by 1.7 percent or 70 Bcf and working gas design capacity increased slightly by 0.1 percent or 3 Bcf in the same year. The drastic gap in growth presents a plethora of challenges for the U.S. energy market. Without adequate storage, communities are at a higher risk for supply disruptions and price swings. AGA further explains:

“Rapidly increasing demand pressures necessitate a rapid buildout of natural gas storage at a time when growth in underground storage capacity has slowed to just 0.1 percent per year. Action by policymakers is essential to avoid potential service interruptions during extreme weather, price shocks for consumers and impacts on grid reliability, particularly in integrating variable renewable energy sources.”

Storage Fulfills Climate Needs

Natural gas storage also plays an important supporting role as renewables take on a larger share of the grid. Wind and solar, while growing rapidly, are variable and can’t always deliver power when needed. Storage-backed natural gas can help smooth over those gaps.

During the spring 2024 solar eclipse, Texas’s ERCOT saw a sharp drop in solar output, resulting in the need to ramp up natural gas generation by 6.2 GW to cover nearly 80 percent of the lost solar capacity. This kind of operational flexibility is vital to maintaining reliability during unplanned or predictable dips in renewable generation.

AGA also recognizes that integrating natural gas storage with intermittent renewables can maintain decarbonization efforts. As one of the cleanest and low-emitting fuel sources, natural gas storage will support broader climate needs.

“Natural gas storage can enable low-carbon pathways. By thinking of storage not simply as a buffer for gas supply, but as a multi-purpose flexibility tool that can unlock decarbonization pathways.”

Regional Constraints and Policy Challenges Ahead

Despite its demonstrated value, U.S. gas storage facilities face growth limitations due to market and policy barriers. From aging infrastructure to regulatory complexities and bottlenecks there is continued uncertainty for storage expansion. More importantly, regions with higher demand, such as the East and Midwest, are experiencing storage constraints that are not reflective of the current pace of natural gas production, demand, and related infrastructure.

For example, AGA confirms that between 2013 and 2023 underground storage capacity did not rise more than 0.2 percent across U.S. regions, while pipeline capacity, production and demand largely grew throughout the country. At its current growth rate, there’s a clear signal that additional storage assets are vital to keep pace with market growth.

To address the imbalance of storage capacity and market growth, collaboration between industry and regulators is needed to streamline project development. While the past administration stonewalled industry voices and ignored the value of gas resources, recent developments suggest a significant shift underway.

AGA emphasizes that robust investment in both underground and LNG storage is vital to maintaining system efficiency and meeting rising energy demand. The Department of Energy has already taken initial steps to remove regulatory hurdles for LNG projects, empowering operators to move forward with buildouts and related infrastructure. Meanwhile, the Federal Energy Regulatory Commission has approved an additional 65 Bcf of LNG storage capacity at export facilities in the lower 48 states, with approximately 42 Bcf more pending approval.

Bottom line: A reliable, affordable energy future depends on natural gas storage keeping pace with production and infrastructure. AGA’s latest report makes clear that expanding storage capacity will be essential, not only for managing supply and demand, but also for meeting broader energy and climate goal.

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