Gas Utility Construction Capital Expenditure
- Natural gas utilities invest tens of billions of dollars annually in capital expenditures for system construction—covering new and replacement pipelines, storage facilities, safety upgrades, and other critical infrastructure.
- Between 2022 and 2023, construction-related expenditures surged from $32.7 billion to $49.1 billion—a 50% increase. Adjusting for inflation, 2022 spending equates to approximately $34 billion, making the year-over-year increase 44% in 2023. This marks the largest one-year percentage increase since the 1990s and the largest net increase in dollar terms.
- Gas utility construction expenditures have been on a sustained upward trajectory since 2011, largely driven by increased investments in safety and infrastructure improvements. Adjusted for inflation, spending from 1990 through the mid-2010s remained relatively stable, fluctuating between $15 billion and $20 billion annually. Starting in 2014, annual expenditures have risen sharply, with distribution-related investments accounting for the largest share of this growth.
- Several factors likely explain these elevated expenditures, including expansions in pipeline capacity to serve new or existing markets, commitments to accelerate pipeline modernization programs, and evolving federal/state safety and emissions regulations. Additional contributors include the completion of large-scale LNG facilities and the catch-up of projects delayed during the 2020 pandemic.
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