As the demand for natural gas continues to surge in the United States, it has become a beacon of growth for midstream companies.
Williams (WMB), in a recent analyst day presentation, underscored its unwavering commitment to natural gas. The company’s optimistic long-term outlook is fueled by robust demand and a slew of forthcoming growth projects.
The allure of natural gas stems from its versatility and eco-friendly nature. Operating as a flexible and cost-effective energy source, natural gas plays a pivotal role in curbing emissions compared to other fossil fuels.
Dive deeper: “Williams (WMB) and the Dazzling Era of Natural Gas”
The Reliability and Affordability of Natural Gas
Alan Armstrong, the President and CEO of WMB, emphasized that natural gas stands out for its affordability and reliability in the global energy landscape. Its cost-effectiveness has paved the way for lucrative opportunities for midstream players nationwide.
The transition from coal to natural gas in power generation has been a major driver of emission reductions in the U.S. Over half of emission cuts since 2005 can be attributed to this shift. With 217 operational coal-fired power plants in the U.S., the abundant natural gas reservoirs in the country offer ample support for further coal-to-gas transitions.
In a notable projection, power generation from coal is anticipated to decline by 2024 while natural gas generation is expected to remain steady. Impressively, natural gas-derived electricity output surpasses the combined power generated by wind, solar, and hydropower, as per the U.S. Energy Information Administration.
Thus, amidst the ongoing global energy evolution, natural gas is poised to play a pivotal role as a supplementary energy source.
While renewables excel in reducing fuel consumption, they cannot completely supplant the necessity for a reliable backup power source. As renewable technologies advance, natural gas emerges as the go-to alternative energy source.
Armstrong underlined this sentiment, stating, “Whether acknowledged or not, natural gas is increasingly becoming the favored fuel for utilities, given the rapid growth trajectory currently in play.” When considering the considerable lead time required for nuclear power projects, natural gas emerges as the pragmatic choice.
Accessing WMB and the Growth Prospect in Natural Gas
WMB holds a prestigious position as a top 10 holding in the Alerian Energy Infrastructure ETF (ENFR), offering investors a gateway to the Alerian Midstream Energy Select Index (AMEI).
The underlying index of ENFR comprises North American midstream energy infrastructure entities, encompassing firms and MLPs engaged in energy commodity transportation, storage, and processing. As of February 22, the index boasts a robust yield of 6.23%.
For further updates, insights, and in-depth analysis, explore the Energy Infrastructure Channel.
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The opinions and viewpoints expressed herein are those of the author and do not necessarily align with Nasdaq, Inc.’s perspectives.
