America Oil Pipeline Gas Journal Pipelines

Is North America Facing a Pipeline Bubble?

North America’s shale boom is paralleled by the record pace of pipeline construction and now, a long pipeline of projects await a final investment decision. Pipeline Bubble, produced by Global Energy Monitor, now calculates that capital spending on proposed North American pipelines will reach $232.5 billion and raise global pipeline capacity by a third.

Spending on proposed North American pipelines could reach $232.5B and raise global pipeline capacity by a third.

Pipelines have an operational life of at least 50 years and investors are betting on higher volumes of domestic oil and gas output both for local consumption and for export, as the world’s demand for energy, led by India and China, is forecast to rise by a third by 2040. According to the EIA Annual Energy Outlook 2019 reference case, U.S. natural gas output is expected to rise 36 percent to 43.4 trillion cubic feet by 2050. Crude oil is set for annual records through to the mid- 2020s and remains greater than 14 million barrels a day until 2040. Also, Natural gas plant liquids production is set to reach 6.0 million barrels a day by 2030. Projections of supply and demand appear to favor a boom in pipeline construction and underpins the fact that gas pipe projects outnumber oil, four to one.

Domestic market drivers

The power sector as a major gas customer will see the share of natural gas rise from 35.1 percent today to 39 percent in 2050 to satisfy rising demand and feed the rise in new gas peaking plants, which will be needed to provide base load and back-up for the anticipated rise in renewable energy.

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