AbstractHigh‐porosity sandstones are important for hydrocarbon production, underground CO2 storage, extraction of geothermal energy and freshwater aquifers. Porosity of sandstones may be estimated using elastic wave velocities, but these depend also on fluid saturation, clay content, pore shape and contacts between sand grains. An understanding of how elastic properties of sandstones depend on these factors is important for characterizing their storage potential and for geomechanical issues, such as sanding, borehole stability, reservoir compaction and fracturing. Ultrasonic velocity measurements in clay‐bearing sandstones indicate that much of the clay in shaly sandstones is non‐load‐bearing. This enables a simple approach for modelling the elastic properties of shaly sandstones that includes the effect of pore concavity and agrees with ultrasonic P‐ and S‐velocities measured in the laboratory. Despite this agreement, some clay may reside within the contacts and may act to inhibit the development of quartz cement, thus reducing porosity loss and helping to preserve storage volume. This appears to be the case for the Lower Mt. Simon Sandstone, a target formation for underground storage of CO2 in the Illinois Basin, for which the bulk moduli agree with the predicted bulk moduli, but the shear moduli are lower than predicted. This appears to result from an increase in a shear compliance of the grain contacts that may enable sliding along the grain contacts and increase the tendency to shear failure.