When the venerable J. P. Morgan Chase & Co. published its 15th annual energy report in March this year it was written by Michael Cembalest, its chairman for market and investment strategy, and had the unearthly title of “Heliocentrism,” which on the surface doesn’t ostensibly bode well for fossil fuels.
But when the tome is fully explored its connotation of a death knell for fossil fuel growth is clearly rejected, although future oil and gas infrastructure growth is seen as tied ever-more closely to electrification scenarios and the tighter dependency between the natural gas and power grids.
While Cembalest sees continued rapid grow in renewables and storage and that some gas peaking generation and baseload plants could be replaced, he thinks “as a general principle,” his analysis and numbers crunching suggest that both the United States and Europe are “a long way off from no longer needing both backup and baseload thermal capacity,” regardless of the heliocentristic outlook.
(Globally, liquefied natural gas [LNG] developments will also influence North American infrastructure growth as underscored by a new 2050 Global LNG white paper by the Independent Commodity Intelligence Services [ICIS], however, this report does not examine the potential impact from gas exports, which will be covered in a separate future article.)
In 2025, a common mantra includes unprecedented growth projections for data centers globally based on the expected growth in applications of artificial intelligence (AI). However, Cembalest does cite MIT’s economics professor Paul Joskow as questioning whether the data center scenarios are overstated because they fail to take into account expected upcoming efficiencies in chip production and use.
He notes that in 2007 U.S. total power generation was 4,500 terawatt-hours (TWh), and at the time the federal Energy Information Administration (EIA) was projecting growth to 5,200 TWh of demand in 2023, but that demand turned out to be only 4,500 TWh.
Continuing the solar system metaphor, Cembalest’s report subtitle is “Objects may be further away than they appear.”
For example, he said while U.S. grid decarbonization is continuing at a steady pace, the United States has made little progress increasing the electricity share of final energy consumption.
A lot of the cause is inadequate infrastructure in many areas, along with the relatively high cost of electricity compared to natural gas. So, there is a role for added and updated gas infrastructure to play in quickening the pace of the U.S. transition to full electrification and decarbonization.
“Goldman Sachs has been at the forefront of aggressive renewable transition projections in its Carbonomics series,” Cembalest wrote in March. “However, they struck a much more cautious tone in their October 2024 report, particularly as it relates to slow progress on hydrogen, carbon capture, and coal decommissioning. Goldman now assumes a longer life for hydrocarbon assets.”
Among a growing chorus of industry voices, the Washington, D.C.-based American Petroleum Institute (API) is talking up the need for added oil and gas infrastructure, noting its role in assuring energy reliability for the nation.
“The United States has the most extensive natural gas pipeline system in the world – more than 300,000 miles of major intrastate and interstate gas pipelines,” API highlights on its website, noting that there are ongoing infrastructure projects designed to both move natural gas from producing basins to meet growing market demand and to relieve pipeline constrained areas in the Northeast, for example.
As production and demand have grown, so too has additional pipeline capacity. Since 2007, the United States has added billions of cubic feet of daily pipeline capacity.
At the Interstate Natural Gas Association of America (INGAA), CEO Amy Andryszak said an additional 3.3 Bcf/d to 6 Bcf/d of pipeline capacity nationally will be needed by 2030 to meet what she characterizes as a “surge” in demand the rest of this decade.
“Our members are reporting a record number of proactive inquiries for new pipelines from potential customers,” Andryszak said. The big challenges, she thinks, are to remove the hovering uncertainty over the industry and reformed regulatory processes.
To the North, the Canadian Gas Association (CGA) wasted little time in May in urging the nation’s newly elected Prime Minister (PM) Mark Carney to focus on infrastructure, simplified national building codes and a modernized regulatory framework as part of Carney’s outline for a “Canada-focused” approach to energy. CGA’s Board Chair Roger Dall’ Antonia, the CEO of FortisBC Energy Inc., emphasized the need to enhance the nation’s massive energy pipeline system’s reliability and resiliency.
Canada has nearly 1 Tcf of storage capacity, which equates to one third of its average annual gas demand, according to CGA CEO Timothy Egan, who told the new PM that this is a “phenomenal feature” of the nation’s gas infrastructure.
“It provides essential stability and affordability even during extreme weather,” Egan noted.
While energy sources are shifting, the landscape or playing field in which new infrastructure will be required is also changing, as outlined by the Chicago-based global consulting firm West Monroe Partners in its “Future of Energy and Utilities” report for 2025.
Senior Partner Paul DeCotis calls for industry preparation for resiliency among energy companies, citing a combination of “familiar priorities and new uncertainties” this year. And he puts a lot of emphasis on AI for new demand and for new learning and strategic use of the industry resources.
“AI demand and data centers are creating unprecedented load increases, stretching grid capacity and affecting cost and reliability,” DeCotis wrote in his report. “Major projects such as transmission and distribution infrastructure, demand strategic planning and a level of public engagement and regulatory oversight.”
He stresses there will be ever-greater needs to “allocate resources to manage increased interconnection requests – particularly from data centers and new grid-edge technologies.”
Operators in the three-state prolific dry gas play in the Marcellus and Utica shale basins of Pennsylvania, Ohio and West Virginia see tremendous growth opportunities from the national push for electrification along with the data centers driven by AI, according to Patrick Henderson, vice president for governmental affairs and communication at the industry-driven Marcellus Shale Coalition (MSC).
“There’s growing recognition that pipeline infrastructure build-out is central to realizing those opportunities,” Henderson said. “Once stark pipeline opponents – including those in New York and New England – have recently changed their tune and appear open to building natural gas infrastructure from the Appalachian Basin to enhance access to the affordable and reliable fuel.”
There is no longer a blockade on gas pipeline projects at the New York border, Henderson noted.
“Projects once considered dead – like Tulsa-based Williams Cos.’ Constitution and Northeast Supply Enhancement (NESE) projects, along with Millennium Pipeline Co.’s expansion – are back on the radar as politicians recognize the fundamental need for reliable, affordable energy. Companies and developers are ready to invest, but they need more than permits or promises,” he said. “They need consistent, forward-looking leadership that prioritizes infrastructure build-out as necessary for our energy security today and in the future.”
At the federal government’s EIA in Washington, D.C., spokesperson Chris Higginbotham told P&GJ that the agency keeps spreadsheets on liquid petroleum gas (LPG) pipeline projects, isolating the current 17 projects that have been announced or are under construction.
In late May, he also had isolated about 100 natural gas pipeline projects that are announced in the application process, under construction, or on hold. The pipe work is ongoing, both replacement/expansion and new lines, according to EIA’s data.
“We compile the project data using publicly available information,” Higginbotham said. “Some projects, especially those that have only been announced, don’t have complete details publicly available about them.”
Among the gas pipeline infrastructure projects listed by EIA, as many as 25 of them could be on hold, including the massive proposed Alaskan North Slope project whose estimated 9.9 Bcf/d capacity dwarfs all the others that vary in size from 3 to 800 MMcf/d and collectively represent more than 3.5 Bcf/d of total proposed new capacity nationally (many projects lack in-service dates at this point).
On the liquids side, EIA is tracking at least 18 projects, eight of which are under construction including two midstream conversions by Max Energy LLC and one reversal of a pipeline to carry propane by NGL Energy Partners LP. Overall, the pending projects collectively represent more than 1.5 million bpd of added capacity.
According to EIA data, Natural gas pipeline projects completed in 2024 increased takeaway capacity by approximately 6.5 Bcf/d in the U.S. natural gas-producing Appalachia, Haynesville, Permian, and Eagle Ford regions.
These pipelines deliver natural gas from the producing regions to demand centers in the mid-Atlantic and along the U.S. Gulf Coast: Mountain Valley (2 Bcf/d), Regional Energy Access (800 MMcf/d), Louisiana Energy Access (LEAP, 200 MMcf/d), Matterhorn Express (2.5 Bcf/d), and Verde (1 Bcf/d).
Another five pipeline projects completed last year in Texas and Louisiana increased capacity to deliver natural gas to liquefied natural gas (LNG) export terminals by approximately 6.5 Bcf/d: WhiteWater Midstream’s ADCC (1.7 Bcf/d), Gillis Access (1.5 Bcf/d), Gator Express Phases 1 and 2 (2 Bcf/d), and Venice Extension (1.3 Bcf/d).
In North Dakota, home of the prolific Bakken Shale play for both oil and gas, since the150,000 bpd South Bend oil pipeline to Montana opened two years ago, several big pipeline proposals have emerged, including WBI Bakken East (residue gas), Intensity Infrastructure Partners (residue gas), conversion of Double-H pipeline from oil to natural gas liquids (NGL), and three compressor upgrades on the Bison Express residue pipeline to add 300 MMcf/d of capacity.
The WBI and Intensity projects are in pre-commercial development awaiting final investment decisions by their sponsors, according to Justin Kringstad, North Dakota’s director of the state Pipeline Authority.
Elsewhere over the past two years, other successful liquids projects have included: Port Neches Link, a 630,000-bpd short pipeline between connecting crude oil terminals in Texas; the 90,000-bpd Borger Express crude pipeline between Texas and Oklahoma; and the Seminole Red pipeline that was originally a hydrocarbon gas liquids (HGL) pipeline converted to crude oil and now re-converted back to HGLs while Enterprise Products Partners LP’s 630-mile, 600,000-bpd NGL pipeline is finishing up construction this year from the Permian to a point east of Houston at Enterprise’s Mont Belvieu Fractionation Complex in Chambers County.
Permian Basin industry officials reiterate the strength of North America’s premier oil and gas production spot, noting that while production numbers are still very strong (accounting for nearly half of all oil production in the United States and about one-quarter of all natural gas production), lack of certainty with global demand and impacts on supply chains due to national economic policy shifts have caused changes in drilling programs for many Permian operators.
“Unless or until we see a rebound in demand, and in oil prices, continued growth is going to be in question,” the Permian Basin Petroleum Association’s (PBPA) Stephen Robertson told P&GJ.
Regarding infrastructure build-out, Robertson, PBPA’s executive vice president, describes four segments for consideration – hydrocarbon pipeline infrastructure, natural gas processing plants, water pipeline infrastructure, and electrical transmission infrastructure.
“Fortunately, each of these segments have projects underway with more to come,” Robertson said. “Particularly as to hydrocarbon infrastructure, there are at least seven natural gas pipelines currently under construction for takeaway from the Permian Basin.”
Two of the largest are being constructed by Austin, TX-based WhiteWater, whose Blackfin project is a 2.5 Bcf/d capacity line estimated to be in service by fourth quarter 2025 and the Blackcomb project is a 2 Bcf/d capacity line estimated to be in service by the fourth quarter 2026.
There is also a number of gas processing plants or expansions of existing plants under construction in the Permian Basin, such as Phillip 66’s Dos Picos II, scheduled to come online in summer 2025, and Enterprise’s Mentone West (IV) that is scheduled to come online in early Fall 2025.
All parts of the energy value chain eventually will be impacted by technology advancements spurred by the development of AI. Supply/demand each will be altered, meaning the midstream sector and transportation infrastructure similarly are likely to be altered significantly. Industry players reiterated this to P&GJ.
“Appalachian natural gas producers have long been leaders in innovation,” said MSC’s Patrick Henderson. “From a technology perspective, our industry is increasingly leveraging AI and advanced sensors to enhance pipeline monitoring, improve safety and streamline construction. These tools not only reduce costs and risks, but also support more precise decision-making in real-time, helping meet strict environmental and operational standards.
“We’re seeing proof of these technologies being used firsthand, as our membership base has grown to include service companies bringing AI and cloud-based technologies into the sector. These transformational growth opportunities, including data center development, AI and robotics, life sciences and advanced manufacturing, are underpinned by access to affordable, reliable energy that only natural gas provides and [the Marcellus in] Pennsylvania is able to meet these energy demands.”
PBPA’s Robertson echoes the same signals from the Permian in west Texas and southeast New Mexico. Noting he presumes there is stepped up reliance of AI-related technology advances, Robertson said he doesn’t know about a stepped-up use specifically in construction, “but I would presume that is the case. While drones have been utilized for monitoring and inspections in the Permian Basin for quite a while, it seems that many, if not most, companies are looking into the variety of ways that AI can supplement and improve operations.”
Technology is not as big a concern as economic, water, and electricity issues, he indicated. And the water/power concerns are of high importance to sustaining adequate growth. “Industry has to find solutions regarding produced water and electricity demand that are sustainable long term.
“Even if the industry uses treated, produced water everywhere we can in our operations, we still produce more water in the Permian Basin than can be utilized. Therefore, we continue to work in both Texas and New Mexico to develop opportunities to utilize treated, produced water outside of the oil and gas industry. However, these opportunities are reliant on [revising] regulatory frameworks which takes time to develop.”
According to the PBPA, for the past two years only about one-third of the electricity demand in the region was being met by the grid. “All other electricity demand was being satisfied by local, off-grid generation,” Robertson noted, calling it an unsustainable and too costly long-term solution.
In April the Public Utility Commission of Texas approved the Permian Basin Reliability Plan that includes the construction of three new 765 kV transmission lines to bring electricity to the Permian Basin. There are also a number of local transmission lines that are part of the plan, Robertson said. “While all of these lines will take time to get built, the plan and the lines represent much needed progress,” he noted.
INGAA’s Andryszak notes that a lot of emerging technologies are still in the design and test phases so the job ahead for her member interstate pipeline companies is to harness the new tools. “The data centers required to power these technologies of the future will require immense amounts of natural gas to meet electricity needs, making gas pipelines even more critical,” she said.
The INGAA Foundation is closely monitoring and supporting the technology advances, according to Hebe Shaw, foundation executive director. “It’s increasingly typical to run a baseline in-line inspection (ILI) right after pipeline construction wraps up, something that wasn’t the norm a few years ago,” said Shaw, adding that there is increased use of ultrasonic inspections, so-called “Electro Magnetic Acoustic Transducers” (EMT).
Both Andryszak and Shaw emphasized that INGAA and its member companies are increasing the use of drones and more digital tools within the pipeline space. Some of the drone use is to protect against unwanted or “nefarious” uses of the technology. As such, reforms in the environmental and natural gas acts are needed, they stressed.
