The U.S. natural gas supply chain involves multiple players, but pipeline companies are at the heart of it, ensuring a steady flow of natural gas to power plants, industrial facilities, and homes.
In 2023, these companies played a crucial role in delivering natural gas efficiently across the country.
Pipeline companies: the backbone of natural gas distribution
Pipeline companies are responsible for transporting large volumes of natural gas, primarily to high-demand consumers such as power plants and industrial facilities.
According to EIA, in 2023, they accounted for 33% of all natural gas delivered to end users, supplying:
75% of the natural gas used by the electric power sector (27.1 billion cubic feet per day).
51% of the natural gas used by industrial facilities (11.9 billion cubic feet per day).
Unlike local distributors, pipeline companies do not sell natural gas; they charge transportation fees to move it from producers to consumers.
Local distribution companies (LDCs): bringing natural gas to homes and businesses
LDCs primarily serve homes and commercial buildings, supplying 94% of the natural gas used in these sectors.
They operate smaller pipelines that connect to homes, offices, and businesses. Some key facts about LDCs:
They serve nearly half of the industrial and power sectors as well (47% of deliveries).
They are regulated by state utility commissions to ensure price stability and reliability.
Some LDCs operate interstate pipelines, serving multiple states and millions of customers.
Municipal gas distributors, often owned by cities or towns, account for more than half of all distribution companies in the U.S. but deliver relatively small amounts of gas.
Why natural gas consumption is increasing
The demand for natural gas in the electric power sector has surged in recent years due to:
Warmer Summers: Increased use of air conditioning has led to higher electricity demand.
Lower Prices: Affordable natural gas makes it an attractive energy source.
Improved Efficiency: Modern combined-cycle power plants maximize energy output from gas.
Between 2018 and 2023, pipeline deliveries to power plants increased by 17%, reflecting the growing reliance on natural gas for electricity generation.
How natural gas is delivered to consumers
Power Plants & Industries: Receive most of their gas via pipeline companies, which handle large volumes efficiently.
Homes & Businesses: Served mainly by local distributors, which operate networks of smaller pipelines.
The future of natural gas transportation
With increasing energy demand and efficiency improvements, pipeline companies will continue to play a vital role in ensuring reliable natural gas delivery.
Additionally, state regulations and new technologies will shape how local distributors provide energy to residential and commercial users.
Understanding this system helps everyone in the industry—whether working on oil tankers, managing logistics, or ensuring energy supply—to see the big picture of how natural gas keeps the U.S. running.
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