Can our Infrastructure Keep Pace with America’s Energy Renaissance?

The administration is pushing for greater investment in energy infrastructure for good reason—the United States is experiencing an energy renaissance, the likes of which we’ve never seen. Yet despite production levels reaching all-time highs, we as a nation will not be able to realize our full energy potential until we solve the challenge of updating and expanding our current infrastructure network. And to do so will require massive amounts of new investment each year, for decades to come.

In fact, a recent report by ICF International concluded that the United States and Canada will require a total investment of $641 billion in natural gas, crude oil and natural gas liquids infrastructure by 2035. Where should this funding come from? What’s at stake if we fail to build the pipeline, storage, and processing assets required drive our energy economy forward?

The good news is that additional government spending is not nor should not be required when it comes to building out our privately financed natural gas and natural gas liquids infrastructure. Clearly our political leaders do have an important role to play by making a commitment from a policy perspective to support infrastructure development and that’s where master limited partnerships (MLPs) play a critical role.

Congress authorized the use of MLPs more than 25 years ago, recognizing the need to stimulate financing in a capital intensive industry like energy infrastructure. Fast forward to today, and MLP companies are busily constructing an expansive energy network just as policymakers intended. Recent MLP investment totaled nearly $157 billion across the country (2007-2014), with more than $29 billion just last year.

That continuous investment is making a tangible impact. MLPs now operate in every state, producing, processing, transporting, storing, distributing energy products to meet the needs of American homes, businesses and communities. Our economy depends on the free flow of energy supplies and MLPs play a critical role in this activity.

Our directive is clear. We recognize the need for energy infrastructure today; we have identified the energy demand that lies ahead; and we understand the consequences of failing to invest in our energy future. Therefore, the answer to the challenge ahead of us is to continue to support the proven tool that is the MLP structure. Fortunately, most members of Congress already do, and it’s that continued support which will help turn our energy potential into reality.

By Mary Lyman, Executive Director, The Master Limited Partnership Association (MLPA)

Originally Published in National Journal’s Energy Experts Blog, 04/28/15