Special Edition: Natural gas in transition

The U.S. natural gas sector faces risks and opportunities across the value chain as the energy sector accelerates toward less carbon-intensive operations. Some segments and businesses are better positioned than others to survive the shift.

Natural gas utilities have rushed to defend their territories against gas bans in towns around the U.S. Gas-fired power generators must compete with renewable power and associated technologies. Demand for gas transportation capacity has shrunk on some pipeline systems, while other pipelines could benefit from growing LNG demand and experiments with hydrogen transportation. Gas exploration and production companies have faced intense pressure from renewable energy resources.

In a multipart series, S&P Global Market Intelligence teamed up with S&P Global Platts to explore the natural gas industry's role and prospects in the energy transition — a globe-spanning movement to cut greenhouse gas emissions across the energy industry.

SPOTLIGHT SERIES

➤ High-stakes battles over gas use take shape

Downstream companies have found themselves in the middle of a tug of war over the future of direct-use: A number of communities have made moves to block gas use in buildings, driving pro-gas backlash in some states.

➤ Gas-fired generation to lose ground in low-carbon era

An accelerating transition toward a low-carbon energy future appears poised to drive a decline in natural gas-fired generation. Underpinning that transformation in the years ahead will be sustained wind and solar adoption, propelled by their falling costs and mounting policy pressure for renewable energy.

➤ Grid-balancing tactics in flux as battery costs fall

Growth in renewable power has created a supporting role for gas as a backup fuel, balancing the intermittency of wind and solar generation. But improved battery storage technology could pose a big risk to natural gas in its position as a backup for renewable power in the coming decades.

➤ Emissions-conscious markets weigh on US LNG's future

U.S. LNG exports are one of the most promising areas of demand growth for natural gas, but the industry must keep the fuel attractive to consumer nations that aspire to meet net-zero greenhouse gas emissions targets in 2050.

➤ Europe, Asia getting choosier about LNG

The climate efforts of Asian and European countries and their transition to cleaner energy sources will shape two key demand centers for U.S. LNG exports.

➤ Midstream sector must prepare for norms to be upended

The U.S. natural gas pipeline sector is moving from a decade of abundance in project development to an era of hard choices, as political and financial barriers make the expansion of pipeline systems more difficult. Investors are pressuring companies that gas pipelines to decarbonize, and many of the pipelines' utility customers are pledging to reach net-zero carbon emissions by or before 2050.

➤ Upstream gas industry enters new era of emissions

The transition to a low-carbon energy future raises tough questions for the U.S. upstream natural gas industry about its environmental impacts and measures to mitigate them. The shift also threatens to end nearly 20 years of growth in gas production.

CHART WATCH

Other recent energy transition developments

OPERATIONS AND STRATEGY

Path to net-zero: Energy, mining sectors crucial to broader decarbonization

Path to net-zero: Seeing climate opportunity, miners target emissions cuts

Path to net-zero: US utilities in no rush to meet Biden's 2035 climate goal

Path to net zero: Investor pressure on oil, gas operators to cut emissions rises

POLICY AND REGULATION

G-7 decision to leave natural gas, oil off table raises eyebrows

Gas could have role in low-carbon world, but emissions policies critical – study

Gas treatment, infrastructure tensions hamper clean electricity standard efforts

ISSUE IN FOCUS: Oil, gas and the energy transition In the global tug of war over climate policies, the oil and gas industry has found itself on both sides of the rope. Follow our ongoing coverage.

MARKETS AND FINANCE

These utilities want more than an 'ESG wrapper' around climate financing

Utility CEOs see natural gas, transmission as essential to energy transition

Oil majors step up clean energy investment despite 2020 spending cuts

Without big spending bump, emerging markets will be climate 'fault line' – IEA

PROJECTS AND INFRASTRUCTURE

Shell will speed up energy transition to comply with court order on CO2 cuts

Rockies gas could benefit climate if it displaces coal in Asia, study finds

TC Energy formally terminates Keystone XL oil pipeline project

Quoted

"There is a clear clock ticking until 2050," said Nikos Tsafos, a senior fellow with the energy security and climate change program at the Center for Strategic and International Studies. "The idea of gas as a useful short-to-medium decarbonization strategy has lost a lot of its appeal. Not everywhere, obviously. But the conversation is just so different."