SIC 4922 Natural Gas Transmission

 
INDEX
FREE EXCERPT

SIC 4922

This industry classification includes establishments engaged in the gathering, transmission, and storage of natural gas. Establishments involved in natural gas exploration and drilling are classified under oil and gas exploration industries. Establishments involved in both the transmission and distribution of natural gas are classified in SIC 4923: Natural Gas Transmission and Distribution. Establishments involved in natural gas distribution to end users are classified in SIC 4924: Natural Gas Distribution.

NAICS CODE(S)

486210

Pipeline Transportation of Natural Gas

INDUSTRY SNAPSHOT

Natural gas, as it exists in the ground, is not a single kind of gas, but rather a mixture of hydrocarbons, molecules made up of hydrogen and carbon, existing naturally in a gaseous state. The hydrocarbon gases include methane, ethane, propane, butane, and frequently, impurities such as water, hydrogen sulfide, nitrogen, and helium. Methane, the lightest of the gases, is the most important gas for the energy industry. The heavier gases (ethane, propane, and butane) are sometimes included in the natural gas mixture transported by a pipeline, but usually they are removed for use in other industries, such as in the manufacture of industrial chemicals.

Traditionally, the natural gas industry has consisted of three primary activities: exploring for and producing natural gas; transporting the gas from production centers to market regions; and distributing gas to end users. Throughout the development of the industry, some companies have been involved in all three areas, while others have focused their efforts on only one or two.

The natural gas transmission segment of the industry includes gathering lines, storage facilities, and pipeline systems. In 2001 the United States had 206,000 miles of interstate mainline transmission pipeline with a daily delivery capacity of 119 billion cubic feet (bcf). Gathering lines transport gas from producing wells to facilities, where impurities are removed, and to processing plants that separate methane from other types of natural gas. Methane can then be injected into storage or sent through transmission pipelines.

The gas pipeline segment of the natural gas industry has changed little since the 1992 enactment of the Federal Energy Regulatory Commission's (FERC) Order 636, which "unbundled" pipeline operations from the sale of natural gas, thus allowing customers to purchase the use of the pipelines independent of the purchase of natural gas. Because of the squeeze on the availability of capital for new investments, the industry saw little growth during the early years of the twenty-first century.

ORGANIZATION AND STRUCTURE

Within the United States, gas flows primarily in a northeasterly direction toward the eastern states and the Midwest from four major producing areas based in Texas, Oklahoma, Louisiana, and the Gulf of Mexico. A smaller, but increasing, amount of gas is transported from Texas and Canada into California. Most of the natural gas is transported through interconnected webs of underground pipelines. Individual pipes vary in size from about five feet in diameter to less than an inch. The largest pipes collect gas in producing areas; the smallest pipes deliver gas to individual households. By the latter 1990s, more than 256,000 miles of pipeline transported the gas to 47 of the contiguous states (Vermont imported its gas from Canada).

Long-distance pipelines transport gas under pressure, usually about 1,000 pounds per square inch. The gas travels through the pipeline at a rate of about 15 miles per hour. As it moves through the system, local gas utilities and large individual users, such as industrial customers or electricity-generating power plants, make withdrawals. To keep the gas moving, compressor stations along the pipeline restore gas pressures, which otherwise would drop because of withdrawals and friction.

One advantage to natural gas as an energy source is that it can be stored. Natural gas usage fluctuates seasonally, typically showing slack demand during the summer months and dramatic increases during the winter when it is used for space heating. During times of low use, inexpensive gas can be purchased and injected into storage for use during times of high demand when the price usually is higher. Some companies meet more than half of their winter deliveries with gas from storage.

Not all gas in storage is available for use, however. In order to maintain adequate pressure in a storage reservoir, a quantity of gas, referred to as "base gas," must be maintained. The gas available to be withdrawn is called "working gas."

BACKGROUND AND DEVELOPMENT

The natural gas supplied in the United States comes from two basic kinds of sources, referred to as conventional and unconventional. Conventional gas is recovered from gas fields, both onshore and offshore. According to a traditionally held belief, conventional natural gas deposits were formed through long geological processes in combination with the decay of biological material. Under appropriate conditions, the gas became trapped in permeable rock and was covered by an impermeable cap.

Gas reservoirs consist of areas where the gas is contained within porous rocks and between the pieces that make up rocks. The amount of gas a rock formation can hold is based on how many of these tiny holes exist within the structure. Natural gas within a porous rock formation is prevented from migrating to the surface and into the atmosphere when a nonporous cap covers it.

Unconventional gas reservoirs have different geological characteristics. Some types of unconventional gas resources include: "tight gas" or "tight sands gas," which is found in low-permeability rock; "Devonian shale gas," which is found in shale deposits from the Devonian geological period, approximately 350 million years ago; "coal-bed methane," which is natural gas that has been formed along with the geological processes that formed coal; "natural gas from geopressurized aquifers," which refers to gas dissolved under high pressure and at high temperatures in brines located deep beneath the earth's surface; "gas hydrates," which are ice-like structures of water and gas located under the permafrost; and "deep gas," which is found at levels much deeper than conventional gas. Although there is no scientific consensus, some believe deep gas originated from inorganic sources and that it exists everywhere as a result of the geological processes that formed the earth. Of the unconventional gas sources, the one most important to the gas transportation industry was coal-bed methane.

Recorded use of natural gas dates back thousands of years. The ancient Chinese used natural gas, piped through bamboo poles, to boil water to make salt...

To continue reading

FREE SIGN UP