20111017 kindermorgan gaspipeline
Three large natural gas pipelines --Rockies Express, Midcontinent Express and Kinder Morgan Louisiana -- constructed by Kinder Morgan. - 

Kai Ryssdal: Today's enormous business deal done by a company most people have never heard of is out of Houston, Texas, and an energy firm called Kinder Morgan. Kinder wants to buy one of its crosstown rivals -- El Paso Corporation -- for $21 billion. A lot of the analysis today has Kinder being called the Exxon Mobile of pipeline companies, the biggest of the big.

From the Marketplace Sustainability Desk, Sarah Gardner reports on the year's biggest energy deal and why pipelines are hot.

Sarah Gardner: Together, these two Texas firms are a pipeline powerhouse -- owning 80,000 miles of pipeline that move oil and natural gas across North America. And the key word in this deal, consultant Robert McFadden says, is natural gas.

Robert McFadden: The future of natural gas in this country is pretty good, I believe. And I think they're positioning themselves to be able to move more of it, more efficiently.

And to profit off what the company's betting will be a long-running natural gas boom. Despite controversy over how it's extracted, drillers continue to tap new sources of so-called shale gas in states like North Dakota, Pennsylvania and Texas.

Edward Hirs teaches energy economics at the University of Houston. He says the nation's current gas pipelines are maxed out.

Edward Hirs: We're going to need a huge build-out on the nation's pipeline infrastructure in order to get the new shale gas, or "frack" gas as it's called, to market.

In the Bakken shale field in North Dakota, producers reportedly burn over 20 percent of the gas because there's not enough pipeline to handle it.

Kinder Morgan hasn't publicly committed to building new infrastructure, but a spokeswoman said today it's always "looking for opportunities to meet its customers' needs." Meanwhile, it'll continue operating sort of like "a giant toll road," in the company's words, collecting regular fees from oil and gas shippers who use its pipeline highway.

I'm Sarah Gardner for Marketplace.

Follow Sarah Gardner at @RadioGardner