Natural Gas Distribution NAICS 221210

Nov 23, 2025 - US Needs More Robust Natural Gas Distribution, Storage Infrastructure

• The US natural gas distribution industry must expand pipeline infrastructure and storage to meet rising demand and strengthen grid reliability, according to a November report by the National Association of Regulatory Utility Commissioners’ (NARUC) Gas-Electric Alignment for Reliability (GEAR) task force, according to Utility Dive. The report emphasized harmonization between gas and electric sectors, citing past storms where fuel shortages contributed to widespread outages. Recommendations include investing in new pipeline and storage capacity, creating a readiness forum, enhancing market tools to improve supplier performance during extreme weather, and incentivizing pipeline capacity releases. The task force highlighted the economic challenges facing gas distribution and the need for regulators to strategically expand storage opportunities. Industry groups supported the findings, noting that improved coordination and investment will be critical for ensuring reliable, affordable energy as demand continues to grow.
• During the federal government’s 43-day shutdown, the Federal Permitting Improvement Steering Council advanced key energy projects using multi-year funding authority, according to Pipeline & Gas Journal. Despite the lapse in appropriations, nine projects were added to the FAST-41 portfolio, including the Kosciusko Junction Pipeline Project in Mississippi, the Black Bear Natural Gas Project in Texas, the South System Expansion 4 Project spanning Mississippi to South Carolina and Georgia, and the Mississippi Crossing Project, which is capable of moving 2.1 billion cubic feet per day to the Southeast. These additions highlight continued federal support for expanding midstream infrastructure, which is critical to meeting rising demand and improving reliability. The FAST-41 program, established by the Fixing America's Surface Transportation Act of 2015, aims to strengthen the coordination among federal agencies to expedite environmental reviews for infrastructure projects.

• Natural gas investments have increased amid rising demand for electricity needed to power AI, but some industry observers suggest there is a risk that a significant increase in power demand may not pan out, according to Utility Dive. Even so, investment is increasing. According to energy analytics firm Enverus, Natural gas-related M&A valuations have doubled since 2024. Skeptics point to the last data center buildup before the dot-com bubble burst. By 2001, the US was in recession, and data center demand for electricity fizzled. Other industry insiders suggest times have changed. Due to the fracking boom, natural gas has become the leading fuel for utility-scale electricity generation, largely displacing coal. Some natural gas infrastructure investors argue that even if an AI-related surge in electricity demand falls short, electrification in the manufacturing and transportation sectors will sustain natural gas demand for decades.
• North American midstream companies are investing in natural gas infrastructure to support the rapid expansion of data centers, according to Fitch Ratings. These projects offer diversification benefits by reducing reliance on traditional industrial and residential gas demand, though they remain a small portion of overall operations. Data centers are projected to drive substantial energy demand growth, potentially adding several billion cubic feet per day of gas consumption by 2030. Companies including Energy Transfer, TC Energy, and Kinder Morgan have launched targeted pipeline projects in gas-producing regions, backed by long-term contracts and commercial commitments. While some data center operators have made commitments to renewable energy sources, natural gas is currently the fastest route to scalable, reliable power for data infrastructure.