The energy industry plans to pour more money into America’s natural gas infrastructure over the next 12 years—a lot more.
Annual spending on infrastructure dedicated to the gathering, storage and pipeline shipping of natgas in the United States will continue to rise, hitting a staggering $34.5 billion in the year 2022, according to information released Tuesday by the American Petroleum Institute. That’s up from an estimated $18.9 billion this year.
API sees spending roughly leveling off in 2023. The industry group’s figures do not include natgas investments into railways or marine transport.
The reasons for the massive investment are fairly simple: First, U.S. natural gas production is booming. The United States is now the world’s largest natural gas producer, turning out 65 billion cubic feet per day, according to a study from BP.
Second, the oil and gas industry’s past infrastructure investments were largely focused on bringing oil and gas into the country from elsewhere, whereas investment in the coming years will be focused on moving energy in other directions.
Older domestic infrastructure is designed to address “the need to move imported energy from coastal receiving ports to inland demand centers,” the API report said. In the coming years, however, a large portion of projects will shift priorities to “enable growing energy production in the Midcontinent region to reach demand centers on the US Gulf Coast and Eastern seaboard,” it said.
—By CNBC’s Ted Kemp. Follow him on Twitter at @TedKempCNBC.