Derivatives

3 Months Ended

Mar. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives [Text Block]

Note 8 – Derivatives

Commodity-Related Derivatives

We are exposed to commodity price risk. To manage this volatility, we use various contracts in our marketing and trading activities that generally meet the definition of derivatives. Derivative positions are monitored using techniques including, but not limited to value at risk. Derivative instruments are recognized at fair value in our Consolidated Balance Sheet as either assets or liabilities and are presented on a net basis by counterparty, net of margin deposits. See Note 7 – Fair Value Measurements and Guarantees for additional fair value information. In our Consolidated Statement of Cash Flows, any cash impacts of settled commodity-related derivatives are recorded as operating activities.

We enter into commodity-related derivatives to economically hedge exposures to natural gas, NGLs, and crude oil and retain exposure to price changes that can, in a volatile energy market, be material and can adversely affect our results of operations.

At March 31, 2023, the notional volume of the net long (short) positions for our commodity-related derivative contracts were as follows:

	Commodity	Unit of Measure	Net Long (Short) Position
Index Risk	Natural Gas	MMBtu	931,475,691
Central Hub Risk - Henry Hub	Natural Gas	MMBtu	(30,773,146)
Basis Risk	Natural Gas	MMBtu	(38,069,941)
Central Hub Risk - Mont Belvieu	Natural Gas Liquids	Barrels	(1,153,119)
Basis Risk	Natural Gas Liquids	Barrels	(2,231,000)
Central Hub Risk - WTI	Crude Oil	Barrels	91,250

Derivative Financial Statement Presentation

The fair value of commodity-related derivatives, which are not designated as hedging instruments for accounting purposes, was reflected as follows:

	March 31, 2023				December 31, 2022
Derivative Category	Assets		(Liabilities)		Assets		(Liabilities)
	(Millions)
Current	$	611	$	(623)	$	1,099	$	(1,278)
Noncurrent	156		(461)		269		(734)
Total derivatives	$	767	$	(1,084)	$	1,368	$	(2,012)
Counterparty and collateral netting offset	(511)		631		(1,034)		1,236
Amounts recognized in our Consolidated Balance Sheet	$	256	$	(453)	$	334	$	(776)

The pre-tax effects of commodity-related derivative instruments in Net gain (loss) on commodity derivatives reflected within Total revenues and Net processing commodity expenses in our Consolidated Statement of Income were as follows:

	Gain (Loss)
	Three Months Ended  March 31,
	2023		2022
	(Millions)
Realized commodity-related derivatives not designated as hedging instruments	$	174	$	(69)
Unrealized commodity-related derivatives not designated as hedging instruments	332		(125)
Net gain (loss) on commodity derivatives	$	506	$	(194)
Realized commodity-related derivatives not designated as hedging instruments in Net processing commodity expenses	$	(4)	$	1
Unrealized commodity-related derivatives not designated as hedging instruments in Net processing commodity expenses	$	(5)	$	2

Contingent Features

Generally, collateral may be provided by a parent guaranty, letter of credit, or cash. If collateral is required, fair value amounts recognized for the right to reclaim cash collateral or the obligation to return cash collateral are offset against fair value amounts recognized for derivatives executed with the same counterparty.

We have specific trade and credit contracts that contain minimum credit rating requirements. These credit rating requirements typically give counterparties the right to suspend or terminate credit if our credit ratings are downgraded to non-investment grade status. Under such circumstances, we would need to post collateral to continue transacting business with these counterparties. At March 31, 2023, the contractually required collateral in the event of a credit rating downgrade to non-investment grade status was $7 million.

We maintain accounts with brokers or the clearing houses of certain exchanges to facilitate financial derivative transactions. Based on the value of the positions in these accounts and the associated margin requirements, we may be required to deposit cash into these accounts. At March 31, 2023, net cash collateral held on deposit in broker margin accounts was $120 million.