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October 28, 2024

Meeting America’s Growing Natural Gas Demand:
The Role of Infrastructure in Ensuring Reliability

Scott Smith, President
Spire Midstream

As the U.S. moves toward a more diversified and sustainable energy mix, natural gas continues to play a critical role, not only as a primary heating source itself but also in balancing the electric grid, especially during periods of heightened demand. Natural gas infrastructure, including pipelines and storage facilities, is essential as gas demand continues to rise across multiple sectors. For natural gas suppliers and local delivery companies, ensuring reliability in the face of growing demand, volatile energy markets and new regulatory pressures is key.

Natural Gas’ Rising Demand

The demand for natural gas in the U.S. has been on a steady climb. According to the U.S. Energy Information Administration (EIA), since 2013, natural gas consumption has grown by 37%¹, driven by increased exports, the retirement of coal plants and the growing role of natural gas in the power generation sector– especially as a backup for intermittent renewable sources like wind and solar. This highlights the urgent need to expand infrastructure to support natural gas supply and distribution.

Additionally, the need for reliable energy supplies is amplified by increasing use of data centers and other high-energy-demand sectors. This demand is expected to grow further with the expansion of liquefied natural gas (LNG) exports, which are predicted to reach up to 40 Bcf/d by 2030.

The Infrastructure Gap

Despite growing demand, the infrastructure required to deliver natural gas safely and reliably has not kept pace. While demand has grown by 37% between 2013 and 2022, pipeline capacity has only increased by 21%, and storage capacity has remained relatively unchanged. This infrastructure development lag creates bottlenecks in supply, particularly during peak demand periods or extreme weather events like Winter Storm Elliott in 2022. That event exposed the gas supply chain’s vulnerabilities, with widespread generation outages across the U.S. The shortfall underscored the pressing need for additional pipeline capacity to maintain a resilient system.

Natural Gas Storage Benefits

Natural gas storage facilities are a crucial part of addressing these challenges. Spire Midstream’s Spire Storage West storage facility is located 60 miles southwest of the Opal Hub in Wyoming, and serves as a major storage facility for the western U.S., connecting to key pipelines that supply cities such as Los Angeles, Seattle, Denver and Phoenix. These storage facilities offer flexibility by allowing gas to be stored when demand is low, such as in the summer, and withdrawn during peak periods in the winter.

The expansion of facilities like Spire Storage West is crucial for meeting future energy needs. The current $200 million expansion project at Spire’s Clear Creek facility will increase storage capacity from 23 Bcf to 39 Bcf by 2025. This expansion will help meet the growing need for reliable natural gas supplies in the western U.S., which increasingly relies on intermittent renewable energy sources.

A Balanced Approach to Energy Reliability

The energy grid faces challenges beyond gas infrastructure limitations. As the grid incorporates more renewable energy sources, managing variability from solar and wind becomes more complex. Additionally, renewable growth is forecasted to drive more hourly swings in load, further emphasizing the importance of natural gas infrastructure to balance the grid. Natural gas, with its fast-ramping capabilities, ensures consistent power supply when renewable generation drops.

Expanding infrastructure to support growing demand for natural gas remains critical and continued investment into new infrastructure is essential to meet future energy needs.

What’s Next for Natural Gas?

As the U.S. faces increasing pressure to meet both clean energy mandates and rising energy demands, natural gas infrastructure plays a pivotal role in ensuring reliability. Expanding pipeline capacity and storage facilities is essential to support this transition, providing the flexibility and reliability needed to balance the grid. The expansion of Spire Storage West is a prime example of how investment in natural gas infrastructure can help the U.S. meet both current and future energy demands.

With the right mix of infrastructure investment and technological advancements, natural gas will continue to be an integral part of America’s energy landscape, bridging the gap between traditional energy sources and a cleaner, more sustainable future.

¹U.S. Energy Information Administration. “U.S. Natural Gas Prices and Historical Data.” EIA.gov, U.S. Department of Energy

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Scott Smith is president of Spire Midstream, a business unit of St. Louis-based Spire Inc. (NYSE: SR), a natural gas company serving 1.7 million customers in Missouri, Alabama, and Mississippi, providing natural gas to power their homes and businesses. He is a veteran energy industry executive with years of experience delivering value from midstream assets. Spire Midstream assets Spire Storage West, Spire Storage Salt Plains, Spire STL Pipeline, Spire MoGas Pipeline and Omega Pipeline. To learn more, visit https://spireenergy.com/spire-midstream.