Midstream Infrastructure Improvements Key to Realizing Full Potential of Domestic Natural Gas

Natural gas provides numerous benefits to millions of Americans daily, whether it’s being used to heat or air condition homes and businesses, cook meals, or power vehicles.  But most people who take advantage of this versatile and important energy resource probably don’t think about the intricate and vital system that exists to bring natural gas from where it is produced to the marketplace where it can be used.

There is a complex, infrastructure- intensive “value chain” system for extracting, processing, storing, transporting and distributing energy to end-use-customers.  In fact, the “midstream infrastructure” is a vast network of interstate and intrastate pipelines and local distribution facilities stretching across the nation.  It includes 305,000 miles of transmission pipelines; more than 1,400 compressor stations; over 400 underground storage facilities; numerous gas dehydration and conditioning plants; and local distribution piping consisting of more than 1.2 million miles of main and about 1 million miles of lateral service pipelines.

Built in large part during the 1950s through the 1970s, these systems were designed for markets that have changed dramatically, especially in recent years.  For example, over the past decade, unconventional gas supplies – particularly natural gas found in shale rock formations – have grown at an unprecedented pace, increasing more than twelvefold.  Utilizing hydraulic fracturing and horizontal drilling technologies pioneered by DOE and its research partners, this production has transformed America’s energy landscape from one of hydrocarbon resource scarcity to resource abundance, and brought expanded job opportunities and economic benefits to many old and new gas producing regions.

But this increased development has also brought into sharper focus many accompanying issues and challenges, including those specifically related to midstream infrastructure.  Why?  Because natural gas pipeline reliability and deliverability goes hand-in-hand with a well functioning energy supply and market based system.  The opposite is also true:  legacy natural gas pipelines systems that are facing operational challenges can constrain market growth, strand supplies, impact prices, cause negative economic consequences, and potential environmental harm.

The recent surge in domestic natural gas production from shale and other unconventional resources has created demands for increased pipeline capacity in existing systems and for additional pipelines to connect new production fields with end-use markets.  In addition, some systems have simply deteriorated to the extent that they require replacement.

In response, the natural gas industry is poised to invest billions of dollars to expand and upgrade midstream natural gas infrastructure.  A recent study by the Interstate Natural Gas Association of America (INGAA) Foundation forecast that $130 billion to $210 billion will need to be invested from 2009-30 on midstream infrastructure to meet projected market requirements. 

Obviously, this expenditure to modernize the system is important for pipeline operators and regulated local utility distribution companies – but equally crucial is making sure enhancements and upgrades are performed in a responsible manner, in a way that ensures the role of natural gas continues to be a viable and essential energy choice for the nation in the years ahead.

That is why DOE – in support of the President’s Climate Action Plan (CAP) and in collaboration with its stakeholders and other federal agencies – has undertaken a multi-faceted strategy and activities to support infrastructure modernization.  The goal of this initiative is to not only provide more efficiency and flexibility in gas storage, transmission, and utility distribution systems, but to also minimize Greenhouse Gas (GHG) emissions.

Although carbon dioxide, the largest GHG in terms of emissions, gets a lot of media attention in the climate change debate, methane – a primary component of natural gas – is also a concern because it is a more “potent” GHG than carbon dioxide.  As a consequence, methane leaks from natural gas systems, if significant and not mitigated, could negate the climate benefits of natural gas compared with other fuels.  This is why a primary focus of the DOE strategy is to address methane emissions from natural gas systems.

Following the fifth in a series of roundtables in July, DOE announced several new initiatives focused on workable solutions to the problem of mitigating methane emissions  The benefits include job creation through pipeline and other equipment replacement, cost recovery for infrastructure investments that increase safety and save energy, and opportunities for helping address climate change by reducing GHG emissions.

Among the initiatives are establishing energy efficiency standards for natural gas compressors; collaborating with industry to evaluate and establish advanced natural gas system manufacturing; having the Federal Energy Regulatory Commission (FERC) look at ways to provide greater certainty for cost recovery for new investment in natural gas transmission infrastructure modernization; and joining with the National Association of State Regulatory Commissioners in a technical partnership to accelerate investments for infrastructure modernization and repairs.  The Quadrennial Energy Review (QER) process is also a vital piece of the puzzle in building a strategy for infrastructure modernization that will achieve greater security, economic competitiveness, and environmental responsibility.

Additionally, on November 12-13, 2014, EERE’s Advanced Manufacturing Office and FE’s Office of Oil and Natural Gas are planning a Natural Gas Infrastructure R&D and Methane Emissions Workshop in Pittsburgh, Pa.  The workshop, a follow-up to the CAP and roundtables, will convene experts in natural gas transmission and distribution infrastructure from industry, universities, non-profit organizations, government and national laboratories.  Information gained from the sessions will assist DOE leadership in identifying opportunities for increasing the operational efficiency of natural gas infrastructure and in detecting and eliminating leaks.   Registration information and additional details about the workshop will be announced soon; in the meantime, expressions of interest in the event can be entered online.

In the final analysis – these initiatives and activities collectively are focused on a simple, but poignant theme:  a safer and more efficient natural gas midstream infrastructure network is also a cleaner and more environmentally responsible delivery system.