Commodity Derivatives

12 Months Ended

Dec. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Commodity Derivatives [Text Block]

Note 16 – Commodity 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 15 – Fair Value Measurements, Guarantees, and Concentration of Credit Risk for additional fair value information. In our Consolidated Statement of Cash Flows, any cash impacts of settled commodity derivatives are recorded as operating activities.

We enter into commodity 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 December 31, 2023, the notional volume of the net long (short) positions for our commodity derivative contracts were as follows:

	Commodity	Unit of Measure	Net Long (Short) Position
Index Risk	Natural Gas	MMBtu	820,590,728
Central Hub Risk - Henry Hub	Natural Gas	MMBtu	(40,757,055)
Basis Risk	Natural Gas	MMBtu	3,091,504
Central Hub Risk - Mont Belvieu	Natural Gas Liquids	Barrels	(1,218,000)
Basis Risk	Natural Gas Liquids	Barrels	(50,000)
Central Hub Risk - WTI	Crude Oil	Barrels	(155,000)

Commodity Derivatives Financial Statement Presentation

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

	December 31, 2023				December 31, 2022
Commodity Derivatives Categories	Assets		(Liabilities)		Assets		(Liabilities)
	(Millions)
Current	$	623	$	(496)	$	1,099	$	(1,278)
Noncurrent	243		(345)		269		(734)
Total commodity derivatives	$	866	$	(841)	$	1,368	$	(2,012)
Counterparty and collateral netting offset	(552)		554		(1,034)		1,236
Amounts recognized in our Consolidated Balance Sheet	$	314	$	(287)	$	334	$	(776)

The pre-tax effects of commodity derivative instruments in our Consolidated Statement of Income were as follows:

	Gain (Loss)
	Year Ended December 31,
	2023		2022		2021
	(Millions)
Net gain (loss) from commodity derivatives within Total revenues:
Realized commodity derivatives designated as hedging instruments	$	—	$	—	$	(55)
Realized commodity derivatives not designated as hedging instruments	253		(91)		16
Unrealized commodity derivatives not designated as hedging instruments	703		(296)		(109)
	$	956	$	(387)	$	(148)
Net gain (loss) from commodity derivatives within Net processing commodity expenses:
Realized commodity derivatives not designated as hedging instruments	$	(4)	$	16	$	2
Unrealized commodity derivatives not designated as hedging instruments	(43)		47		—
	$	(47)	$	63	$	2
Total net gain (loss) from commodity derivatives	$	909	$	(324)	$	(146)

Contingent Features

Generally, collateral may be provided in the form of 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 December 31, 2023, the contractually required collateral in the event of a credit rating downgrade to non-investment grade status was $15 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 December 31, 2023, and 2022, net cash collateral held on deposit in broker margin accounts was $2 million and $202 million, respectively.