Search Under Way for New Storage Fields
Two preliminary underground natural gas storage projects in the
West, separated by more than 1,000 miles, are textbook examples of
the fact that demand and market location alone are only part of the
strategic considerations for making new merchant storage
Texas-based Western Hub Properties, which has fought off local
NIMBY concerns and environmental challenges to move ahead with a
new merchant storage project in the northern California town of
Lodi, publicly announced some months ago it wants to develop a
similar project in the southern half of the state, south of
Bakersfield, CA, near the important gas hub of Wheeler Ridge. On
the surface, the geographical area is an excellent market location
since it is the nexus for several major interstate and intrastate
transmission pipelines and proposed gas-fired generating plants,
but Western is finding the challenges underground are keeping it
from identifying an economically viable project.
Similarly, the two energy giants in the Pacific Northwest,
PG&E Corp.'s National Energy Group, operating a major
interstate gas pipeline out of western Canada, and Avista Corp.,
based in Washington state, are teamed up to develop an underground
storage project in the southeast corner of Washington near the
Stanfield, OR, Hub. They are still a year away from filing for a
Federal Energy Regulatory Commission certificate, officials said
this week because a lot more geologic and seismic "exploration
work" needs to be completed before a viable project can be
In both areas, the need for the gas storage --- principally for
existing and planned gas-fired power generation --- is clear, and
the market access is clearly good, but the formation of the
underground landscape may yet prevent commercial storage projects
from being built. For now, the respective proponents are remaining
optimistic they can solve the underground puzzles.
"The challenge is purely figuring out just what is down there,
and whether or not you are going to lose your gas some place," said
Jim Fossum, Western Hub's California-based project manager. "We
think we have better fields we have isolated. The work is positive.
We just got a report this morning that looks like a thumbs up."
Western Hub is using teams of reservoir engineers and petroleum
geologists for the field work, but ultimately Fossum and his
colleagues must analyze the data. "It has to add up well enough so
our financial backers will say yes," he said Monday, still hopeful
for a project he first identified in May. "Land is not a problem,"
said Fossum, noting that it is the ultimate geology under the
mostly privately held acreage that will make or break the project.
Similarly, the uncertainty concerning ultimate "closure" of the
gas supplies in underground rock continues as PG&E and Avista
expect another year of research and development before they know
whether they have a go, and if so, what the characteristics
(working capacity, injection/withdrawal rates, etc.) of the storage
project will be. "The evidence so far is good," said a Spokane,
WA-based Avista spokesperson, adding that it is still
"preliminary," however, and the companies have not made a final
commitment to developing a storage project yet.
"We drilled a well last year just to see if there were domes
that we could produce a lot of water in at the depths we were
looking for, and based on that one well, we came away with pretty
encouraging results. But it is not nearly enough to decide to
develop a site," said Mike Hocking, PG&E's engineering director
on the proposed storage project.
Other developers of underground gas storage in other regions of
the U.S. expressed skepticism about the eastern Washington site,
calling it among "the most difficult" types of surroundings because
of the preponderance of basalt, several-hundred-million-year-old
lava flows. They caution that a storage field in this type of rock
has really never been done, and if one is completed, they say it
may end up being more like the existing aquifer storage project in
southwest Washington, Jackson Prairie.
Hocking said that the comparisons to Jackson Prairie can't be
taken too far because the geology in that part of the state --- on
the western side of the Cascade Mountains --- is very different.
Jackson is shallower with sedimentary rock under sandstone type
"This is much different than Jackson Prairie," he said, noting
that the basalt formations, in theory, should provide the cap that
is needed for a storage operation
Two of the keys are whether the gas can be securely contained
underground so it does not migrate away from the storage project
and how much volume ultimately can be stored and moved in and out
of the field.
"Seismic analysis is pretty difficult in basalt layers like
this," Hocking said. "We're drilling and testing between two drill
holes to quantify what the actual porosity and permeability are.
Although there is no history of oil/gas development in the
immediate area targeted for an underground storage operation,
PG&E's officials point out that 25 miles to the northwest is a
depleted natural gas field that produced "billions and billions of
cubic feet" from the 1920s through the '40s. In addition, Steve
Knudsen, PG&E's project development director, said the Pacific
Northwest is experiencing a mini-boom with a lot of different
groups looking for oil and natural gas finds in the region.
"Historically, on and off there has been drilling in the Pacific
Richard Nemec, Los Angeles