For months now, pipeline stocks have been selling off on worries that lower energy prices will reduce output and therefore shipping volumes.

But just as a pipeline has two ends the midstream sector has two sources of potential customers. Producers are one, and they’re obviously not faring well. But the country’s generally far less leveraged energy users have seldom been so well off, and they have every interest in making sure that the energy keeps flowing, especially to places where it can displace costlier alternatives.

The refiners and their logistics offshoots have proven as much over the last year, spending some of their windfall from cheaper crude on new supply lines to keep it coming.

Natural gas shippers haven’t fared as well, but their future also looks bright. Because while cheap gas discourages drilling in the short run it certainly stimulates additional demand, often in far-flung demand regions in need of new pipelines.

Booming U.S. natural gas exports to Mexico already account for a significant claim on U.S. output, one expected to increase disproportionally fast in the years ahead. We’ll discuss Mexico’s complex but rapidly growing energy market and its watershed energy reforms in more detail in the months ahead.

The main point here is that cheap U.S. gas is increasing the demand for more pipeline capacity to Mexico. Similarly, proximity to the most productive shale gas field on Earth in Appalachia is fueling New England’s drive to shed its historical dependence on coal and heating oil. This too will require more pipeline.

Source: Northeastenergyfuture.com

I‘ve recently made a tiny but telling contribution to this process by replacing the old and inefficient oil burner in my western Massachusetts home with a gas line. The average Massachusetts household with gas heat spent less than one-third the typical bill for a home heated with oil in recent years, saving more than $2,200 annually.

Oil still heats 29% of Massachusetts homes, and its market share is even higher elsewhere in the region, ranging as high as 64% in Maine.

I was especially glad to be able to make the switch because my local distribution company, Berkshire Gas, has stopped accommodating such requests in other parts of the state, citing inadequate gas supply.

Berkshire Gas is one of the committed backers of Kinder Morgan’s (NYSE: KMI) proposed Northeast Energy Direct Project, which would pipe plentiful natural gas from the Marcellus into Massachusetts and other New England states starting in 2018. The utility has said only the completion of this project will alleviate the gas supply crunch and allow it to lift the moratorium.

My electricity supplier, meanwhile, is backing another Marcellus-to-New England gas pipeline promoted by Spectra Energy (NYSE: SE). Last winter, the abrupt closure of a Massachusetts coal power plant spiked many electricity bills in this area by hundreds of dollars a month.

The state Department of Public Utilities recently ruled that local utilities can recover their commitments to pipeline projects like Kinder Morgan’s and Spectra’s from their customers. The increased gas supply should lower the region’s relatively high energy bill, though this remains disputed by environmental activists and politicians opposed on principle to fossil fuels.

These projects made sense when natural gas was selling for $4 per million British thermal units and they’re even more economically compelling now that the price has been cut in half. This is the sort of demand response that could double the price of natural gas again in a year or two.