Here is the question, stripped of everything else. You have a gas field. You have a data center 100 miles away that wants 7.6 gigawatts. You can build a power plant at the gas field and run a transmission line to the data center, or you can build a pipeline to the data center and put the power plant there. Same gas, same load, same 100 miles. Which one do you build?

I have watched this argument happen in conference rooms for ten years and I have never once seen anybody do the arithmetic on a whiteboard. It gets settled by whoever in the room has done more of one than the other. So I did the arithmetic. The answer is not what most grid people assume, it is not what most pipeline people claim either, and the reason it comes out the way it does has almost nothing to do with thermodynamics.

Setting the Two Cases So They Are Actually the Same Case

Most published comparisons of pipes against wires are garbage, and they are garbage for one specific reason: they compare a thermal megawatt-hour against an electrical megawatt-hour and call it a result. The most-cited paper in this space, DeSantis et al. in iScience, concludes that electric transmission costs "about eleven times higher than for natural gas pipelines" per delivered MWh. That number gets quoted constantly. Read the methods and the gas side is normalized on lower heating value, meaning it is being credited for energy that has not been through a turbine yet. It is comparing crude oil to gasoline.

So let us build the two cases properly.

Case A, the wire. A combined cycle plant at the gas field. 100 miles of 765 kV single-circuit line. Data center at the far end. ERCOT specifies its new 765 kV lines at normal and emergency ratings of at least 7,603 MVA, six bundled Tern conductors, so that is the number we size to.

Case B, the pipe. 100 miles of 30-inch pipeline. The same combined cycle plant, sited at the data center instead. Running Panhandle B at 1,440 psig discharge and 1,000 psig suction with compressor stations 75 miles apart, a 30-inch line moves about 0.99 Bcf/d. At 1,030 Btu per cubic foot that is 12,464 MW thermal, and at a modern H-class heat rate of roughly 5,930 Btu/kWh on a higher heating value basis, it supports 7,172 MW electric. Within five percent of the 765 kV circuit. That is the apples-to-apples pair, and I have never seen anybody publish it: one 765 kV circuit equals one 30-inch pipeline.

Notice what just dropped out of the comparison. Both cases build the same power plant. Same turbines, same capex, same heat rate. It sits at a different end of the route, and that is all. Which means the plant cancels, and what we are actually pricing is the transport layer. Good. That is the only honest way to run this.

The Efficiency Argument Is a Trap, and Almost Everyone Falls In

The reflex objection to pipelines is that you lose 43 percent of the energy converting gas to electricity, so of course moving electrons is better. I made a version of that mistake myself last week and had to walk it back.

Here is the thing. That conversion loss happens in both cases. The pipe does not cause it. Burning gas causes it. If you generate at the field and wire it, you still paid the 43 percent, you just paid it 100 miles earlier.

So take one MMBtu at the wellhead and run it both ways.

Down the pipe: lose roughly 0.25 percent to compressor fuel over 100 miles, then convert at 57.5 percent. You deliver 0.574 MWh to the data center meter.

Down the wire: convert at 57.5 percent at the field, then lose about 1 percent on the line, using NREL's ReEDS planning assumption of one percent per 100 miles. You deliver 0.570 MWh.

The pipe wins by 0.76 percent. That is a rounding error, and anybody who tells you pipelines are dramatically more energy efficient is selling something. But it is not a loss, and the gap widens with distance because line losses accumulate faster than compression losses do. The filed tariffs bear this out: NGPL retains 3.13 percent to move gas from the Permian to its market zone, and that is roughly 1,300 miles.

Efficiency is a tie. Cross it off the list. The decision gets made somewhere else.

$846 Million of Wire, or About $500 Million of Steel

ERCOT's board endorsed the 765 kV STEP Eastern Backbone on December 9, 2025: $9.384 billion for 1,108.8 miles of new right of way, four new 765 kV substations, eleven transformers, in service somewhere between 2030 and 2032. That works out to $8.46 million per mile, all-in, stations included. So 100 miles of Case A is $846 million, or $111 per kilowatt of transfer capacity.

The pipe is harder to price honestly, because the number everyone reaches for is wrong for this job. Oil and Gas Journal's survey puts new construction at a record $12.1 million per mile for the twelve months ending June 2025. That is an interstate, FERC-jurisdictional sample of eighteen spreads, and it is roughly double what large-diameter pipe actually costs in Texas. Kinder Morgan's Permian Highway was $2.0 billion for 430 miles of 42-inch, which is $4.65 million per mile. Energy Transfer's Hugh Brinson is $2.7 billion for about 442 miles, or $6.11 million per mile. Scale those to 30-inch on a dollars-per-inch-mile basis and add back a floor for the costs that do not shrink with diameter, and 100 miles of 30-inch lands at roughly $400 to $600 million, or $56 to $84 per kilowatt.

Call it $500 million against $846 million. The pipe is about 40 percent cheaper for the same delivered gigawatts, and the spread is wider than that if the wire needs series compensation or a second circuit for contingency.

Then the Opex Flips, and the Pipe Loses That One

This is the part pipeline advocates skip, so let us not.

Transmission O&M is remarkably cheap. Connecticut's Siting Council pulled five years of FERC Form 1 data and got $14,481 per circuit-mile per year for overhead line. ITC Holdings, the only large pure-play transmission operator in the country, spent $116 million on O&M across roughly 16,000 circuit miles in 2025, which is $7,250 per mile. Call it $1.45 million a year for our 100 miles.

Gas transmission is not cheap. Williams' Transco spent $509 million on O&M across about 9,600 miles in 2025, which is $53,021 per mile per year. Northwest Pipeline runs $24,615. Boardwalk's gas segment runs $20,387. Weight the three and you get roughly $33,000 per mile, or $3.3 million a year for our 100 miles.

So the pipe costs about 2.3 times as much to run. You have rotating equipment. You have compressor stations every 40 to 100 miles with tens of thousands of horsepower in them, and 34 percent of reported gas transmission incidents happen at those stations rather than on the pipe itself. You have inline inspection, cathodic protection, and a seven-year reassessment clock in high consequence areas. A transmission line, once it is up, mostly just sits there and you cut trees under it.

Worth saying plainly, though: on both sides, maintenance is not where the money is. ITC bills load about $111,625 per circuit-mile per year and spends $7,250 of it on O&M. That is six and a half percent. Ninety-plus percent of what you pay for a wire is capital return, depreciation and taxes. Same story on the pipe. Anybody arguing this on maintenance labor is arguing about the tip.

2,424 Acres, or 606

Here is where it stops being close.

AEP's own landowner brochure lists typical right-of-way width at 200 feet for 765 kV and 150 feet for 345 kV. MISO's cost guide assumes 225 and 175. Take AEP's 200 feet. Over 100 miles that is 2,424 acres, encumbered permanently, and encumbered visibly. Nothing tall grows in it. Nothing gets built in it. It is there for sixty years.

Mountain Valley, a 42-inch line moving 2 Bcf/d, uses a 125-foot construction corridor that is reduced to an approximately 50-foot permanent right of way once the line is in the ground. Over 100 miles that is 606 acres, and after restoration you farm it, graze it, and drive over it. You just cannot build a house on it or plant an oak.

Four to one on permanent acreage. Normalize it per gigawatt and the wire encumbers 319 acres per GW per 100 miles against the pipe's 85. And that is before you count what the corridor looks like, which is not an engineering variable but is absolutely a permitting variable. The 765 kV structures are 130 to 190 feet tall. The pipe is invisible.

I want to flag one honest complication, because ERCOT's own filing raises it. The statewide 765 kV plan requires 434 more miles of new right of way than the 345 kV alternative, even though it needs about 1,400 fewer miles of upgrades on lines that already exist. Per gigawatt-mile, higher voltage always uses less land. At the plan level, in Texas, it currently uses more of it, because it is greenfield.

$2.73 Against $1.60, and a 2004 Study That Got There First

Put the capital, the O&M, the losses and the compressor fuel in one place. Twelve percent fixed charge rate on both sides, which covers return, depreciation and taxes. Same load factor on both sides so nobody is cheating.

At a 65 percent load factor, moving energy 100 miles costs $2.73 per MWh by wire and $1.31 to $1.90 per MWh by pipe. Call the pipe $1.60. That is a ratio of about 1.7 to 1. At 90 percent load factor, which is what a data center actually runs at, the wire is $2.07 and the pipe is $0.96 to $1.38, and the ratio widens to 1.8.

Now the part that made me trust the result. In March 2004 the Bonneville Power Administration and the Northwest Gas Association jointly published a study called "Comparing Pipes and Wires". Same experiment, different equipment: 100 miles of 500 kV serving a 1,500 MW plant at the source, against 100 miles of 20-inch pipe fueling that plant at the load. Their answer was $2.97 per MWh for the wire and $1.58 for the pipe at a 65 percent load factor, and their stated conclusion was that "natural gas pipelines average between 50 and 60 percent of the cost of electric power transmission per unit of energy delivered."

Two completely different sets of assets, twenty-two years apart, one built from 2026 ERCOT and Texas intrastate numbers and one from 2004 Pacific Northwest numbers, both landing on the pipe costing roughly 55 to 60 percent of the wire. And BPA is a transmission operator. They published a finding against their own book. In this business that is about as close to a clean result as you are going to get.

Their O&M split matched too, by the way: $519,000 a year for the line against $1,000,000 for the pipe. The gas side has always cost more to run and less to build.

If You Are Going to Build Wire, Build 765

None of the above is an argument against transmission. It is an argument against building the wrong transmission, and Texas is in the middle of deciding exactly that.

The step from 345 kV to 765 kV is not incremental. AEP puts it plainly: "A single 765 kV circuit carries up to six times the power of a 345 kV line" with "half the transmission losses of lower voltage systems." The underlying engineering, quoted in an Oak Ridge report, is that an uncompensated 765 kV line has a surge impedance loading around 2,400 MW against roughly 390 MW for a 345 kV line, and that "about six single-circuit, or three double-circuit, 345 kV lines would be required to achieve the load carrying ability of a single 765 kV line."

The distance number is the one that should stop you. Move 1,500 MW on a 765 kV line and the St. Clair curve says you can carry it reliably up to about 550 miles. Move the same 1,500 MW on a single-circuit 345 kV line and you get about 50 miles. Fifty. That is not a better wire, that is a different category of infrastructure.

ERCOT ran the losses on its own two plans and found the 765 kV build cuts statewide transmission losses by about 5 percent, between 540 and 577 GWh a year, which they describe as roughly a 128 MW thermal unit running at a 50 percent capacity factor. That is a power plant you never have to build, every year, forever, because you picked a higher voltage.

Scale, in units a person can hold. A Texas home uses about 13,150 kWh a year. One 765 kV circuit at a 60 percent load factor moves 40 TWh, which covers 3.0 million Texas homes. One new-build 345 kV circuit at ERCOT's 2,988 MVA spec covers 1.2 million. Houston has roughly 2.6 million households. One 765 kV line is metropolitan Houston in a single 200-foot corridor. To do that with 345 kV you are cutting six corridors at 150 feet each, which is 900 feet of encumbered land instead of 200.

So if you care about acreage, and about not putting steel through six sets of somebody's pasture, the 765 kV line is the environmentalist's answer and the 345 kV line is not. That is an odd sentence to write about the largest transmission structures ever built in Texas. It is still true.

What the Pipe Cannot Carry

Now the case against everything I just said, because it is a real case and it is the one that decides where this actually goes.

You cannot pipe sunlight. This is the whole argument in four words. Roughly 99 percent of net new US generating capacity in 2026 is solar, wind and storage. None of it has a molecule to ship. For any of that generation, the transport question has exactly one answer and it is a wire. The pipeline's cost advantage applies to a shrinking share of the fleet, even as gas keeps supplying about 40 percent of the energy.

A wire runs both directions and takes anything. Build 100 miles of 765 kV and it will carry gas-fired power today, wind at 2 a.m. in six years, and something nobody has invented in thirty. It shares reserves with everything else connected to it. NREL's Seams study put benefit-to-cost ratios as high as 2.9 on large interregional transmission, almost entirely from that sharing. A pipe is point to point and single commodity. It does one job.

The pipe carries stranding risk the wire does not. Interstate pipelines run at roughly 60 to 65 percent load factor and get paid anyway, because straight fixed-variable rate design puts fixed cost in the reservation charge. That transfers throughput risk to the shipper for the term of the contract. It does not eliminate the risk, it converts it into re-contracting risk at expiry. Transco alone carries $21 billion of gross plant against a 15 to 44 year depreciation schedule. If the load electrifies, that has nowhere to go.

And the plant that actually gets built at the load is usually not an H-class combined cycle. Every number in this piece assumes 5,930 Btu/kWh. Reciprocating engines and simple-cycle aeroderivatives, which is what most fast-deployment data center projects are actually installing because you can get them before 2031, run 7,750 to 8,760. At that heat rate the same 30-inch pipe supports 4.9 to 5.5 GW instead of 7.2, and the delivered cost per MWh goes up by a third. Speed-to-power is being bought with efficiency, and the pipe's advantage is partly spent on the way.

What It Means

The decision rule is not "pipes beat wires." It is narrower and more useful than that.

If the energy is gas, ship the molecule. Roughly 40 percent less capital, about 4 times less permanent land, a slight edge on losses, and no interconnection queue. You give back 2.3 times on O&M and you accept single-commodity risk. On a 100-mile haul to a firm 90 percent load, that trade is not close.

If the energy is not gas, there is no decision. Build the wire, and build it at 765 kV, because six times the transfer for one corridor and five percent lower statewide losses is the best trade available in transmission engineering right now.

What is actually happening in Texas is that we are doing the second thing for the first reason. About 38 gigawatts of behind-the-meter gas has been announced in this state while ERCOT plans a $33 billion, 2,468-mile 765 kV network whose certificates are not granted and whose in-service dates start in 2030. Meanwhile the postage-stamp transmission rate went from $30.95 per kW-year in 2013 to $68.55 in 2025, and every dollar of that build lands in it.

Nobody is choosing gas at the load because they ran this model. They are choosing it because the pipe can be in the ground before the wire has a route. The arithmetic just happens to agree with them.

Solid 8 on the nerd scale. I ran it three times.

Disclaimer: The Grid Report is Barrio Energy's market intelligence product. Nothing here is investment advice. Cost figures for the 30-inch pipeline case are scaled from named Texas intrastate projects on a dollars-per-inch-mile basis and are the author's estimate, not a quoted price; throughput is calculated from the Panhandle B equation at stated assumptions. Links go to primary sources wherever possible. Form your own view, and check my math.