This document is the annual technical progress report for Department of Energy Contract No. DE-FC26-00NT41026 entitled Proof-of-Concept Research for an Advanced Design Criterion to Improve Working Gas Capacity for Natural Gas Storage Caverns in Salt Formations. This report covers the reporting period from October 1, 2000, through September 30, 2001. During this reporting period, the project was initiated and work was performed to develop structural models that will be used to evaluate two compressed natural gas storage caverns in the McIntosh Dome northwest of Mobile, Alabama. Information necessary to define the structural models include site-specific stress, temperature, geometry, stratigraphy, and operating scenarios in the dome and for the caverns. Additionally, material model development for the salt at the McIntosh Dome was initiated. Material model development activities include acquisition of salt core for testing, laboratory testing, and regression analyses to determine site-specific model parameter values that describe the behavior of salt around a storage cavern. Although not performed during this reporting period, the information and models developed will be used to perform advanced design storage cavern analyses for the Bay Gas caverns to determine the operating pressure ranges to maintain stable conditions.