Storage study questions benefits of 2005 Energy Policy Act.
A new report by Ziff Energy examines the increase in storage capacity in North America and the location of storage and capacity additions. The price spread between summer injection and winter gas delivery months has provided storage operators with an incentive to build more greenfield storage, expand existing working gas capacity, and add more compression and horsepower to inject and deliver gas more quickly.
The Energy Policy Act 2005 led to FERC Order No. 678 which allows storage operators to capture market-based rates. "The policy objective was to add more storage capacity, which has indeed happened," said Cameron Gingrich, Manager, Gas Services. "However, the increase in storage capacity has led to high injection season storage carryover volumes, leaving end users with higher carrying costs and increased storage costs from higher summer/winter prices spreads. One has to wonder if this policy is imposing greater costs than added benefits"
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|Publication:||Pipeline & Gas Journal|
|Article Type:||Brief article|
|Date:||Apr 1, 2010|
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