Midstream energy assets and businesses have been one of the most popular sectors for infrastructure investors. But as ESG priorities continue to be integrated into infrastructure investment portfolios and the wider infrastructure market, legacy assets that don’t measure up to these standards are at risk of becoming stranded.

According to the Environmental Defense Fund’s report Managing the transition: Proactive solutions for stranded gas asset risk in California, increasingly, certain gas assets will no longer be considered “used and useful,” and this will leave investors exposed. What constitutes a “used and useful” gas asset will, for example, determine whether a utility can charge customers via rates to recover an investment.

What can investors do if an investment becomes stranded?

“For future near-term gas infrastructure investments, California should establish a decision-making framework that provides for continued operations and safe