Pipeline and Storage Infrastructure Requirements for a 30 Tcf U.S. Gas Market

Several leading energy market forecasts predict a significant increase in annual U.S. natural gas demand, from 22.4 trillion cubic feet (Tcf) in 1997 to 30 Tcf by 2010 or shortly thereafter.  While they may differ on the timing and the composition of the demand growth, the studies agree there must be considerable market growth in power generation and industrial sectors – both of which are price-sensitive.  The fundamental challenge facing the natural gas industry is to serve these markets at competitive prices.

This study builds on the 30 Tcf market forecasts by creating realistic scenarios to estimate the incremental gas pipeline and storage infrastructure needed to support that market and assesses the gas industry’s challenges in providing that infrastructure.

The study finds that total U.S. gas transmission expenditures from 1998 to 2010 are estimated to be between $30 and $32 billion, with projected annual average of $2.3 billion to $2.5 billion – somewhat higher than the actual average annual capital expenditures over the last 15 years.  Half of the new expenditures will go towards new interregional transmission capacity, 9 percent for new production area links, 15 percent for new demand area connections and 26 percent to replace existing pipeline and compressor facilities.