Burns & McDonnell

Natural Gas Usage Evolves to Meet the Demands of a Net Zero Future

Written by PJ Kolnik | January 6, 2022

Carbon emissions reduction and net zero targets have been in the limelight throughout 2021, and regulated natural gas utilities are feeling the impact across their capital plans as they look to 2022 and beyond. These participants are a critical piece of America’s energy portfolio, with their legacy infrastructure currently supporting natural gas transmission and distribution, and some worry how that investment will fare amid a push to reduce carbon footprints.

Even as state, local and federal governments have been busily developing dramatic regulations to tackle emissions — see Colorado SB21-264 for one example — rest assured the practical reality is that natural gas infrastructure still has a long, useful life ahead. Business will shift, as it always does, and challenges will become opportunities for agile actors in the modern market.

Some of the key trends we’re seeing with respect to those shifts in the natural gas transmission and distribution sector point toward continued demand and important use cases for society.

  • Hydrogen is here. This renewable fuel will most certainly have a role to play in the future net zero economy as the industry’s current pipeline distribution infrastructure can play a role in delivering a blended fuel. Several gas operators are actively pursuing pilot projects on their systems to evaluate the impact of a blended fuel — with up to 20% hydrogen — to achieve significant carbon dioxide (CO2) emissions reductions by the end of this decade, which would advance their net zero commitments with a lower-carbon fuel blend.
  • Methane emissions are in the crosshairs, and operators are evolving. Gas operators are already working to replace existing pipelines and modernizing infrastructure to resolve leaks across their network of assets. Operational practices are also being modified to end the practice of venting methane into the atmosphere during construction. Meanwhile, the demand for renewable natural gas (RNG) is at an all-time high as developers and operators seek to capture otherwise-vented methane and unlock additional value.
  • A desire for market certainty. Much of the oil and gas industry — regulated and unregulated — is in favor of a carbon tax and trade system that would provide regulatory and price certainty while incentivizing and pricing the cost for overall emissions reduction.
  • Natural gas is still needed to balance renewables. A large gap remains between the energy needed in the U.S. and what can be provided from existing renewable resources like wind and solar power; it will take decades for that to change. Gas remains an important source of high-density, dispatchable and storable energy. While Winter Storm Uri in February 2021taught the energy industry several lessons, it was clear that the nation depends heavily on this fuel for heating and power generation at critical times. Natural gas will continue to be a vital fuel for power generation and help offset the polluting effects from other, higher-emission fossil fuel sources in the future, both nationally and internationally.
  • Global demand for LNG and RNG is rising. Global players including Europe, Japan, China and South America are increasing their demand for both liquefied natural gas (LNG) and renewable natural gas (RNG). The economic opportunities of developing, transporting, exporting and utilizing natural gas resources remain massive, and market trends suggest this will continue for a long time to come.


Adoption of hydrogen into energy portfolios will depend on having sufficient infrastructure. Many operators may be able to leverage existing natural gas pipelines for some blended hydrogen fuels.