What would you call a lot of natural gas, ready at a moment’s notice? Some might call it a storage facility. Others might call it the Marcellus Shale.

With more than 1,300 wells shut in by pipeline capacity constraints in the region, “the Marcellus has turned into a giant gas storage field,” Jerry Swank, managing partner at the energy infrastructure investment company Swank Capital said at the Hart Energy Marcellus Midstream Conference and Exhibition in Pittsburgh last week.

And until the grid adjusts, the Marcellus will likely stay that way, Swank said.

The major long-haul pipelines through the region — such as the Transcontinental Gas Pipeline (Transco), Tennessee Gas Pipeline and Texas Eastern Transmission Co. (Tetco), among others — historically moved gas from the Gulf Coast to premium markets in the Northeast on long-term contracts. But the glut of Marcellus gas coming out of Pennsylvania in recent years quickly used up both the excess and expanded local capacity in those lines, ending the premium from Northeast markets (see Shale Daily, Feb. 21). “The unfortunate thing is that these pipelines — Transco, Tennessee Gas, Texas Eastern — are now running into a bottleneck,” Swank said.

The well documented exodus from dry gas in the early months of 2012 is masking a backlog of Marcellus production ready at a moment’s notice (see Shale Daily, Feb. 22a). “As soon as prices tick up to $3.50/Mcf or $4/Mcf, those first ones will come up and there’ll be another huge glut. Until we figure out how to get south, I think the Marcellus will turn out to be and continue to be a very big and profitable gas storage field,” he said.

That’s because the Marcellus is fighting in its own weight class. The play accounts for nearly 40% of the total shale gas acreage under development and more than half of the remaining unrisked resources in the seven major shale gas plays, according to ITG Investment Research. “So that’s going to dominate what we’re talking about. It dominates the investment. And it’s going to dominate the gas market as we go forward,” Swank said. If prices approach $4/Mcf, Swank Capital expects Marcellus production to more than double to 13 Bcf/d by 2020.

The producers have backed up the claim that Marcellus production is ready and waiting, although the rig count in the play has declined as of late. According to NGI‘s Shale Daily Unvonventional Rig Count, rigs actively drilling for oil and gas in the Marcellus for the week ending March 23 dropped four rigs from the previous week to 151.

Although all major producers in the play plan to pull dry gas rigs this year, few expect corresponding production declines in the short term. Cabot Oil & Gas claims it can cut Marcellus spending by 15-20% this year and still grow production by 35-50% (see Shale Daily, Feb. 22b). And Talisman Energy Inc. expects to maintain production levels year over year despite drilling at roughly one-third of 2011 rates (see Shale Daily, Feb. 16).

That backlog is creating “losers,” Swank said. Expect pipelines to back out Canadian imports into New England and the Midwest, the Kinder Morgan Energy Partners LP’s Rockies Express Pipeline to turn around or redirect its flow, and Midcontinent producers to redirect supplies to the Southeast (see Shale Daily, Jan. 9).

“But this market of just being able to ship your stuff to New York citygate at premium prices all year on these long haul pipelines in kind of over to some extent. So we think we’ll see increased pressure on prices and rates when these people renew and the struggle to find new outlets for this is going to be very big,” Swank said.