Industry Information

Natural Gas: Critical Component of Energy Consumption in U.S.

Natural gas is a critical component of energy consumption in the United States. The U.S. natural gas pipeline grid transports natural gas from producing regions to customers, such as Local Distribution Companies (LDC), industrial users and electric generation facilities.

Interstate pipelines carry natural gas across state boundaries and are subject to Federal Energy Regulatory Commission (FERC) regulation on (1) the rates charged for their services, (2) the terms and conditions of their services, and (3) the location, construction and abandonment of their facilities.

Intrastate pipelines transport natural gas within a particular state and are typically not subject to FERC regulation. At the close of 2004, based on data from the Energy Information Administration (EIA), the U.S. natural gas pipeline grid included 107 interstate systems and more than 90 intrastate systems. Collectively, they accounted for over 297,000 miles of pipeline with a combined 178 Bcf/d of natural gas transportation capacity.

Natural gas is typically stored in underground storage facilities, including salt dome caverns and depleted reservoirs. Natural gas storage plays a vital role in maintaining the reliability of gas available for deliveries. It is expected to become an increasingly important component in managing the supply and demand imbalance created by significant LNG shipments.

Storage facilities are utilized by:

  • Pipelines, to manage temporary imbalances in operations
  • Natural gas end-users, such as LDCs, to manage the seasonality of demand and to satisfy future natural gas needs
  • Independent natural gas marketing and trading companies in connection with the execution of their trading strategies.

For more information, please visit the following websites:

U.S. Department of Energy – www.eia.doe.gov
Federal Energy Regulatory Commission – www.ferc.gov/industries/gas.asp
American Gas Association – www.aga.org
Interstate Natural Gas Association – www.ingaa.org