Natural Gas Construction Spending Trends

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Natural gas construction expenditures have skyrocketed in the past decade, a necessary evil in order to maintain service reliability in the face of an aging infrastructure.   Overall, the natural gas industry invests tens of billions of dollars each year for infrastructure development.  Here’s a snapshot of recent trends.

Natural Gas Construction Spending Trends and Data

According to the most recent data compiled by the American Gas Association (AGA), natural gas construction spending increased by 50% from 2022 to 2023, from $32.7 billion to $49.1 billion.  This represents the largest annual percentage increase since the 1990’s.

However, this is not just a 1-year or short-term blip – capital expenditures within the natural gas industry have been trending up for over 13 straight years, mainly driven by infrastructure improvements and safety enhancements.  Investments within the distribution infrastructure have accounted for the largest share of this spending – in fact, this accounted for over half of all spending in 2023.

Of course, this begs the question – what exactly is driving this higher level of sustained spending?  The answer, according to the AGA, includes some combination of the following:

• A steady expansion of pipeline capacity into new areas and markets.
• A proliferation of pipeline modernization initiatives.
• The emergence of new safety and emissions regulations.
• The completion of multiple large-scale LNG facilities.
• Catch-up projects from pandemic delays.

This is all great news for reliability and emergency preparedness in the natural gas sector.  Although electric utility outages are far more common due to the overhead nature of the industry’s infrastructure, buried infrastructure is not without risk.  You never know when an earthquake, massive flood, or a similar disaster will strike, and events like these could negatively impact natural gas infrastructure.

In the final analysis, all utility infrastructure spending – whether we’re talking about electric, water or natural gas construction and maintenance – needs to continue and even accelerate in order to meet the needs of both current and future generations.