Natural gas is now the leading fuel for electric generation in the United States as it surpassed coal in 2015, and in 2017, it was used to generate 32% of electricity, while coal was used to generate about 30%. While natural gas is forecasted to remain the primary source of electric generation for at least the next two years, its role is being challenged in some parts of the country. The resistance is being led by state policy makers, renewable energy advocates, and environmental groups who argue that some existing and proposed natural gas plants are not needed or should be replaced by renewable energy.

On July 19, 2017, Southern California Gas Company (SoCalGas) was notified that the prohibition on natural gas injection was conditionally lifted from its Aliso Canyon natural gas storage facility. This operational restriction was put in place in December 2015 due to a significant leak that was detected in October of that year. The leak, which emitted approximately 100,000 metric tons of methane, displaced thousands of families in the affected area. Upon fulfilling the conditional requirements, SoCalGas can start operating under new terms.

On February 24, Cheniere Energy’s Sabine Pass plant officially began exporting liquefied natural gas (LNG) when a tanker carrying 3.7 bcf of domestically produced LNG departed for Brazil. A second tanker docked on March 11, and at least eight more will follow in the next two months, each destined for the global LNG spot market. Sabine Pass is one of several LNG plants being built in hopes of capitalizing on the opportunity to ship cheap U.S. natural gas to regions of the world with significantly higher prices. Unfortunately, timing of completion appears to have missed the market with global LNG prices plummeting in recent months.

In February 2016, Dominion Resources announced the acquisition of Questar Corporation for $4.4 billion. Richmond, Virginia-based Dominion operates electric utilities in Virginia and North Carolina, local gas distribution companies (LDCs) in Ohio and West Virginia, and electric transmission and electric generation businesses. Dominion also is the general partner and majority owner of Dominion Midstream, a master limited partnership with storage assets and gas pipelines on the East Coast. Based in Salt Lake City, Utah, Questar is a natural gas distribution, pipeline, storage, and cost-of-service gas supply company that serves nearly one million homes and businesses in Utah, Wyoming, and Idaho. Questar also owns about 3,400 miles of gas transmission pipeline and 56 billion cubic feet of working gas storage.

The production of condensate is set to continue its rapid pace of production. Concurrently, domestic demand has declined due to constrained demand from refineries [1]. In particular, lease condensate may be particularly susceptible to this oversupply/decreased demand condition. Although lease condensate is a byproduct of natural gas drilling, it is considered crude oil by the Energy Information Administration (EIA) and the Department of Commerce and thus banned from export. This prevents creating an export market for all of the supply, something that is occurring with other NGLs such as butane. Low oil prices further hurt the near-term business case for natural gas exploration and development, including condensate.

On August 10, 2014, Kinder Morgan Inc. (KMI) announced that it plans to acquire all the outstanding equity securities of Kinder Morgan Energy Partners LP, Kinder Morgan Management LLC, and El Paso Pipeline Partners LP in a deal valued at more than $70 billion. The combined entity will further Kinder Morgan’s reign as the largest energy infrastructure company in North America and the third largest energy company overall, with an estimated enterprise value of about $140 billion. The Kinder Morgan subsidiaries collectively own an interest in or operate approximately 80,000 miles of pipelines and 180 terminals currently. Its pipelines transport natural gas, gasoline, crude oil, CO2 and other products, and its terminals store petroleum products and chemicals and handle such products as ethanol, coal, petroleum coke, and steel.

Under a new proposal, the Department of Energy (DOE) would discontinue granting conditional approvals until the Federal Energy Regulatory Commission (or other agency) issued a final environmental review.

In recent years, several high profile accidents (including Pacific Gas and Electric Co.’s 2010 California pipeline explosion and the recent Harlem explosion) have drawn national attention, putting pressure on regulators and operators to ensure public safety and on stakeholders to approach infrastructure safety more proactively. This is driving significant capital expenditures in infrastructure investment, which are expected to remain strong in 2014.