While more natural gas storage remains problematic in the West in the short term, the growth in shale development and renewable energy in the power sector hold considerable promise for storage in the longer term, according to NW Natural CEO Gregg Kantor.

"While the Pacific Northwest [underground] gas storage situation continues to have near-term potential, storage values in many areas of the country remain low," Kantor said during a recent conference call with analysts. "But despite these conditions we continue to work hard to find added value opportunities at our Gill Ranch facility in California (see Daily GPI, Oct. 5, 2010)."

Kantor said he thinks California's renewable portfolio standard (RPS) of 33% by 2020 will lead to "more volatility on the electricity grid, increasing the need for a flexible resource such as gas can provide.

"Overall, as the nation continues to move more toward natural gas for power generation, transportation and industrial processes, storage will provide long-term value."

Both storage and vehicle transportation demonstrate the environmental and economic advantages of natural gas, which policymakers are now increasingly recognizing, said Kantor. He cited a new law in Oregon (SB 844) that has empowered state regulators to establish a voluntary greenhouse gas reduction program to incentivize gas utilities like NW Natural to invest in programs that reduce emissions.

Kantor sees this as support for his utility's proposal at the Oregon Public Utility Commission (PUC) to allow NW Natural to begin providing a natural gas vehicle (NGV) fueling service to help build up the infrastructure of compressed natural gas (CNG) fueling. Presently, the Northwest has little fueling infrastructure for NGVs, he said.

"We look forward to uncovering more untapped opportunities where natural gas can provide significant environmental benefits for Oregon," Kantor said. "There is no doubt that the shale gas revolution has been a transformational change for the nation, and one that offers great opportunities, so now it is our job to make sure NW Natural is position to thrive in this new environment."

Kantor said the transportation sector is a "new avenue" for natural gas growth spurred by the shale revolution. "Today, like never before, we have the opportunity to reduce our dependence on foreign oil and lower our environmental impact by moving fleet vehicles to CNG," he said.

"Unfortunately, [in the Northwest] there is little infrastructure available to allow fleet owners to make that change," said Kantor, noting that his utility's PUC filing last year is designed to begin filling that gap by providing high pressure CNG service to business customers.