Photo by Martin Adams on Unsplash 

Will there be a new natural gas pipeline for New York and New England? The region could arguably use one. But in the US, there’s no place for energy investment like Texas and the Gulf Coast, where Kinder Morgan Inc. (KMI) recently announced a major pipeline and supply deal with utility Entergy Corp. (ETR), advises Elliott Gue, editor of Energy and Income Advisor.

Oil and liquefied natural gas (LNG) are once again providing a distressingly high portion of the NY/NE region’s winter energy — even though cheap Appalachian gas can be found nearby. But it’s far more likely US oil and gas companies will continue to focus their real long-term spending projects on regions more friendly to fossil fuels.

Kinder Morgan Inc. (KMI) Chart

Entergy’s main interest in Kinder’s gas is to supply reliable power to rapidly reshoring manufacturing and heavy industry in the Port Arthur corridor. And the need to get more Permian Basin gas to that market is also behind Energy Transfer LP’s (ET) decision in December to build the two-phase, 400-mile Hugh Brinson Pipeline entering service by “end 2026.”

For the past decade or so, major US midstream energy companies have funded capital spending and dividends entirely with operating cash flow. That remains the case with this new Capex surge. And all of these projects are all heavily, if not fully, contracted before final investment decisions are made.

Midstream companies’ conservatism is part and parcel of the same shale discipline exercised by producers. And there’s no “build it, and they will come” mentality, such as we saw at the peak of the last cycle in 2024-2025. That’s a good reason to expect the long-term energy up-cycle has a long way to run.

About the Author

Elliott Gue is chief strategist at Capitalist Times, an investment research firm he co-founded ten years ago. Prior to founding Capitalist Times, he shared his expertise and stock-picking abilities with individual investors in several highly regarded research publications, including The Energy Strategist, and as chief editor of Personal Finance, one of the largest and oldest financial newsletter publications in the US.

Mr. Gue is one of the foremost experts on energy investing and has dedicated himself to learning the ins and outs of this dynamic sector, scouring trade magazines, attending industry conferences, touring facilities, and meeting with management teams. He is also the co-author of two investment books published by the FT Press, The Silk Road to Riches: How You Can Profit by Investing in Asia's Newfound Prosperity and Rise of the State: Profitable Investing and Geopolitics in the 21^st Century

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