What’s Going On
- Utility bills across many U.S. states are increasing, putting political and financial pressure on consumers and regulators.
- EQT, a major natural gas company, argues that this “anger” will push states and regulatory bodies to relax restrictions on natural gas infrastructure—pipelines, compressor stations, etc.—to help bring supply closer to demand and lower overall energy costs.
- Alongside this, there is a focus on permitting reform. Project approval delays, legal challenges, and state-level regulatory hurdles are cited as constraining the ability to build infrastructure quickly in response to rising cost pressures.
Context & Why This Matters
Here are the background trends and dynamics making this a critical issue:
- Electricity demand pressures: Factors like data centers, electrification of transport and heating, and AI computing are increasing demand for power. Existing grid constraints or supply bottlenecks push up retail rates.
- Natural gas as a bridging fuel: In many states, natural gas remains central for power generation, heating, and as backup to renewables. It is seen by many policymakers and energy companies as essential for reliability, especially where renewables or storage aren’t yet scalable.
- Regulatory friction is real: Permitting delays, zoning, environmental reviews, and community opposition often slow down pipeline or facility builds by years. Those delays increase cost, risk, and sometimes make projects unviable.
- Political sentiment and affordability: Rising bills are visible to households and businesses. Utility affordability is emerging as a political issue in many states. Regulators face pressure to act.
Investment Plays & Opportunities
Here are investment strategies and positions that could benefit if the scenario plays out as EQT suggests:
| Play Area | Why It Looks Attractive | Key Metrics / Indicators |
|---|---|---|
| Natural Gas Producers & Midstream Infrastructure | Expanded demand for gas supply, more pipelines, processing, storage to meet localized needs. Companies with large reserves and a modular/incremental build-out capability stand to benefit. | Monitor state regulatory approvals, gas pricing spreads (basis differentials), pipeline utilization rates, capacity expansion announcements. |
| Permitting, Engineering & Construction Firms | With regulatory reform likely, there will be a wave of approvals and backlogged projects getting revived. Engineering, permitting consultants, infrastructure contractors will benefit. | Watch bill activity in state legislatures, number of pending infrastructure project filings, legal outcomes of permit challenges, time-to-build metrics. |
| Utilities & Power Generators Flexible on Fuel Mix | Companies that can switch between natural gas & renewable inputs, or secure gas supplies to stabilize wholesale price exposure, will be better positioned versus those locked into more expensive or intermittent supply. | Fuel mix disclosures, new gas plant or combined-cycle announcements, contract negotiations, wholesale vs retail rate spread. |
| Associated Infrastructure: LNG, Storage & Compression | As gas flows increase demand, complementary infrastructure—liquefaction, storage, compressor stations, pipeline expansions—will need to scale. | Capex in storage & compression, LNG export/trading activity, permitting/licensing of new facilities, project financing announcements. |
| Energy-Policy & Regulatory Tech | Tools to speed permitting review, regulatory compliance, environmental impact models, community engagement, and grid planning are likely to be in demand. | Software / platforms servicing regulatory workflows, emissions measurement & reporting tools, legal/advocacy firms specializing in energy permitting. |
Key Risks & What Could Limit Upside
Even though the thesis has strong tailwinds, there are several risks and counterforces investors should weigh carefully:
- Environmental / climate policy backlash — States with strong climate goals may resist new natural gas infrastructure (or impose strict emissions / methane standards) even under affordability pressure. Some regulatory bodies or courts may continue to block or limit projects.
- Federal & state regulatory uncertainty — Permitting reform may be proposed, but implementation might lag, get watered down, or be blocked. Local opposition, legal challenges, or political changes can reverse momentum.
- Economic volatility — If gas prices spike, or if natural gas becomes less cost-advantaged vs renewables + storage in certain regions, then the economics of building more gas infrastructure may erode.
- Technological risk — Improvements in storage, grid flexibility, grid modernization, renewable energy deployment could reduce dependence on new gas infrastructure. If that happens sooner than expected, demand projections may overshoot.
- Cost escalation — Construction costs, labor shortages, regulatory compliance, supply chain constraints (steel, pipes, equipment) can add materially to project costs, squeezing returns or delaying break-even.
Return Scenarios & Portfolio Implications
Here are exemplary scenarios, with rough returns and what they depend on:
| Scenario | Assumptions | Potential Upside | Potential Downside |
|---|---|---|---|
| Base | Regulatory reforms modest but meaningful in gas-friendly states; moderate cost inflation; natural gas maintains its role; rising utility bills force action; projects take 2-4 years to sanction. | Solid returns in natural gas midstream & producers (IRRs in mid-teens), steady cash flows, possibly re-rating of companies with exposure to gas infrastructure. | Delays in permitting, modest gas price squeeze, environmental pushback, political/regulatory reversal in key states. |
| Upside | Significant permitting reform; faster project approval; high demand surge (e.g. from data center growth, electrification) outpacing supply; gas remains affordable; technology costs decline; supportive policy. | Very strong returns, early mover advantage, possibly outsized earnings growth for producers & midstream; premium assigned to companies with clean gas credentials / low emissions. | |
| Downside | Regulatory resistance remains; renewables/storage alternatives make gas infrastructure less essential; cost overruns / supply chain constraints; social opposition or litigation blocking projects. | Weak returns, stranded assets risk for gas-only firms, share price underperformance for heavy-cap ex players, investor skepticism. |
What to Watch (Signals)
To track how this plays out, these are high-impact indicators to monitor:
- New or revised state and regional regulatory rulings permitting natural gas pipelines, compressor stations, LNG export expansions.
- Legislation at state or federal level addressing permitting reform, judicial review limitations, streamlining environmental review for energy infrastructure.
- Utility rate case filings, approved vs requested increases, and how much of that is due to natural gas infrastructure vs grid upgrades vs renewable buildouts.
- Gas supply/demand balance in key regions; natural gas basis differentials (i.e. cost of moving gas from supply basins to demand hubs).
- Capex guidance from major natural gas producers/midstream companies; announcements of new LNG or gas infrastructure projects.
- Public sentiment / regulatory filings: community opposition, environmental impact reports, methane/methane regulation frequency and strictness.
Bottom Line
The rising burden of utility bills is more than a public grievance—it may act as a lever pushing states, regulators, and energy companies to act: to approve gas infrastructure, streamline permitting, and invest in supply chain. For investors, the early movers in natural gas production, midstream, and associated infrastructure are likely to capture disproportionate gains. However, that upside is paired with nontrivial policy, regulatory, and execution risk. Portfolios need exposure on both sides — capture the gains if reforms succeed, hedge against the possibility that transitions accelerate and gas becomes more regulated or displaced.
