October 20, 2021

Volume XI, Number 293

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October 19, 2021

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October 18, 2021

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Natural Gas Infrastructure Needs for Electric Generation—Not What Would be Expected

While Congress and the President continue their “Keystone XL Pipeline Dance”, a new report from the Department of Energy (DOE) discusses the changing needs for additional domestic natural gas infrastructure to meet increased demand for natural gas from the electric power sector.

The recently released DOE report highlights the changes in natural gas transportation infrastructure due to increased production made possible by horizontal drilling and hydraulic fracturing techniques.  Natural gas flows in several markets are reversing, or are anticipated to soon do so, due to the flow of natural gas out of new high producing areas such as the Haynesville basin.  Interestingly, because of the current breadth of natural gas production and distribution across the U.S., less new natural gas infrastructure is likely needed than would otherwise be expected.

The reduced need for new natural gas pipelines is also affected by increasing use of existing interstate transport capacity, re-routing natural gas flows and expanding existing pipeline capacity.

While the country’s shift away from substantial reliance on coal as the feedstock for electric generation accelerates, the addition of natural gas fired generation is leading to shifting natural gas transportation patterns.  The changes in production and transportation, rather than significant increases in additional infrastructure which would logically follow such a move from coal to natural gas are highlighted in DOE’s report.

An interesting conclusion from DOE’s analysis is that capital expenditures on new interstate pipelines are projected to be significantly less than capital expenditures on infrastructure expansion during the past 15 years—this despite the country’s increasing reliance on natural gas fired electric generation.  While this result would initially appear counter-intuitive, the new diversity of natural gas production locations and opportunities has, coupled with existing pipeline capacity, if not eliminated the need for additional infrastructure, at least reduced its otherwise apparent need.

©2021 All Rights Reserved. Lewis Roca Rothgerber LLPNational Law Review, Volume V, Number 50
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About this Author

Mark Davidson, public utilities, energy, attorney, Lewis Roca Rothergerber
Special Counsel

Mr. Davidson's approach to practicing in public utilities law has been ‎developed by having represented all facets of utility regulation ‎including utilities, their customers, and the agency that regulates ‎them. He has practiced before regulatory agencies in Colorado, ‎Louisiana, Washington and Wyoming. As the country moves toward ‎more renewable energy alternatives, his representation of solar and ‎wind energy service providers will be at the forefront of our energy ‎economy both in Colorado and across the nation.‎

303-628-9577
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