The report measures capacity in two different ways: demonstrated peak working gas capacity, which is the sum of the highest observed working natural gas storage inventory level in each facility over the prior 5-year period; and working gas design capacity, which is a measure based on the physical characteristics of the reservoir, installed equipment, and operating procedures particular to the site that is often certified by Federal or State regulators. Demonstrated capacity is a more conservative estimate than design capacity, since it represents observed maximum levels of inventory rather than theoretical, nameplate capacity. Demonstrated capacity increased from 4,103 billion cubic feet (Bcf) last year to 4,239 Bcf this year and design capacity increased from 4,388 Bcf to 4,498 Bcf. The increases were largely in traditional storage in the West Region and salt cavern facilities in the Producing Region.
Natural gas prices declined in most market locations, likely reflecting lower demand for air conditioning. At the Henry Hub, natural gas prices fell 26 cents from $2.96 per MMBtu last week to $2.70 per MMBtu yesterday. A steady decline began on Friday, following a small increase near the beginning of the report week. The Henry Hub price increased to $3.01 per MMBtu in trading on Thursday, rising above $3 for the first time since early August. Most prices around the country followed a similar pattern to the Henry Hub with exceptions in the Northeast, where prices at New England trading points increased as a result of major pipeline maintenance on Algonquin Gas Transmission’s system. The price at the Algonquin Citygate, which serves Boston-area consumers, rose to $4.52 per MMBtu on Monday, an increase of $1.47 per MMBtu from the previous trading day. The price increase was short-lived; by Wednesday the Algonquin price had fallen back to $3.72, a net increase of 1 cent per MMBtu for the whole week.
U.S. consumption fell 3.7 percent this week, according to data from Bentek Energy. Consumption of natural gas for power generation declined 13.1 percent, reflecting reduced air-conditioning demand as summer temperatures continued to subside. Natural gas consumed for electric power generation declined by 9.8 percent in the Southeast, the largest regional consumer of natural gas for power generation. Residential and commercial consumption rose 12.9 percent, partially offsetting the declines in power burn. The rise in residential and commercial consumption reflects increases in heating demand in some areas of the country. Industrial demand also rose slightly over the week, by 1.5 percent.