**Natural Gas Distribution Industry Update**
The U.S. natural gas distribution industry is grappling with increased competition from cleaner energy sources and aging infrastructure, despite a surge in natural gas production. According to the U.S. Energy Information Administration (EIA), daily dry gas output is projected to rise from 107.7 billion cubic feet (Bcf/d) in 2025 to 110.6 Bcf/d in 2026, primarily driven by drilling in the Permian and Haynesville regions.
Significant investments are being made by several key players, including Atmos Energy Corporation, which plans to invest $4.2 billion in fiscal 2026 to enhance its infrastructure. Likewise, Southwest Gas Corporation aims to invest $6.3 billion from 2026 to 2030, while ONE Gas intends to allocate $4 billion through 2029. The industry currently operates a vast 2.5 million-mile pipeline network and controls approximately 3,353 trillion cubic feet of natural gas reserves. However, the Zacks Utility Gas Distribution industry’s rank is #185 out of 245, indicating weak near-term prospects, as earnings estimates for 2026 have fallen by 18.5% since June 2025.
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