What's worse: 'train-wreck' or 'Frac Act'?

The steady rise in natural gas inventories with 10 more weeks left in injection season is “quickly approaching a train-wreck,” say the folks at Barclays Capital:

A Devon Energy rig in the Barnett Shale. (Kevin Fujii/Chronicle)

“A marginal improvement in demand will help to narrow the y/y surplus, and domestic production is already in decline. Yet, the tightening of the balances comes “too little, too late” to avoid testing the capacity of storage infrastructure. Our balances indicate that operational constraints and extreme weather events aside, inventories are on track to finish October with 3.93 Tcf in the ground,” the report says.

Hitting that wall could force a more steep shut-in rate and further erode prices for producers. True, there’s news like Newfield Exploration’s decision to shut in 2.5 billion cubic feet equivalent of gas (about four percent of its third quarter production) due to lower gas prices, but that’s rare.
Platt’s says this morning its survey of analysts has injections of 48 to 52 Bcf. They note: “If the refill rate continues at its current pace, storage operators may be forced to curtail injections, leading to a glut of gas on the market and even lower prices, some fear.”
A bit of counter-point: the Department of Energy is about to put out a release saying there’s actually a bit more storage capacity available than the market seems to believe. That means maybe producers can keep on going a little while longer until demand picks up?
Storage is a seasonal issue. Maybe the bigger concern is the recent attention the industry has received from Congress on a key production technology called hydraulic fracturing. The proposed law would require drillers to keep track of the fluids used in the technique behind the recent surge in natural gas production, requiring tougher disclosure than most states regulators currently require.
Not that they’re energy experts, but the folks over at the Motley Fool say the hand-wringing of that issue is overdone.

“Big Oil (and especially Small Oil), you know I often stick up for you, but I suspect you’re crying wolf this time,” says writer Toby Shute.

If certain chemicals are banned from frac fluid, Shute says he’s sure the industry will come up with alternates that don’t break the bank. He also had some doubts about the cost of compliance that the industry is claiming (i.e. that reporting would cost 78,000 Texas jobs by 2015).