Today we had the exciting opportunity to tour Caliche’s Golden Triangle Storage facility in Beaumont, Texas. Caliche is an acquisition and development company focused on the underground storage of natural gas and industrial gases, including hydrogen and helium, as well as carbon sequestration. Following the tour, we sat down with Dave Marchese, CEO of Caliche. Dave has over 25 years of experience in the development, construction, and operation of energy assets, including underground hydrocarbon storage, utility-scale power plants, and petrochemical facilities. We were thrilled to hear Dave’s perspective on the natural gas storage business, the growing importance of storage to LNG and power markets, and the infrastructure needed to support rising U.S. natural gas demand.
In our conversation, Dave walks us through the natural gas storage business and why storage is becoming increasingly important as U.S. natural gas demand grows and the energy system becomes more complex. We discuss Caliche’s platform, including Golden Triangle Storage in Beaumont and Central Valley Gas Storage in California, and spend time on the fundamentals of salt cavern and reservoir storage, how storage facilities are developed, and the significant permitting, capital, and contracting requirements involved. Dave shares the history of the storage market, including the industry’s last major buildout, the impact of the shale revolution, and why relatively little new storage capacity has been developed over the past 15 years.
We explore what is driving renewed demand for storage today. Dave discusses the increasingly important role storage plays for LNG terminals, including managing large volumes of gas during outages and normal operating fluctuations, as well as its role in supporting gas-fired power generation and balancing an electric grid with growing amounts of intermittent renewable generation. We touch on AI and data center-driven power demand, the potential implications for natural gas infrastructure, and why firm transportation and storage could become increasingly important as that load develops.
We also discuss the broader infrastructure picture, including storage needs in West Texas and the Northeast, constraints on moving gas between Texas and Louisiana, permitting and regulatory considerations, and Caliche’s plans to significantly expand both of its existing facilities. Dave shares his perspective on the growing competition for skilled workers across the industrial economy, the importance of investing in and training the next generation of energy professionals, and more. It was a fascinating discussion and a great opportunity to better understand a critical but often underappreciated piece of the natural gas and broader energy infrastructure system.
Mike Bradley opened the discussion by highlighting that market conditions were considerably calmer this week after several consecutive weeks of elevated volatility. In fixed income markets, the benchmark 10-year Treasury yield has pulled back this week to approximately 4.95% following last week’s move above the psychologically important 5.0% threshold. Turning to oil markets, WTI crude oil prices have plunged this week to approximately $95 per barrel, down from roughly $103 per barrel at last week’s close. The sharp decline was driven primarily by reports that Saudi Arabia’s East-West pipeline system, which has a capacity of roughly 5 million barrels per day, could soon resume operations.
Turning to equities, he highlighted that a combination of lower interest rates, declining oil prices, and easing concerns surrounding AI-related risks appeared to provide a more constructive backdrop for broader equity markets this week. Mike flagged that President Trump’s address to the United Nations as well as President Xi Jinping’s upcoming visit to the United States on September 24 could emerge as important market catalysts in the week ahead. Investors will be closely monitoring discussions surrounding artificial intelligence, trade relations, and the ongoing conflict involving Iran, as developments in any of these areas could have meaningful implications for global equity, commodity, and currency markets.