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 10 – 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, 2022, 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

Sequent Acquisition (1)

Natural Gas

MMBtu

661,224,762

Central Hub Risk - Mont Belvieu

Natural Gas Liquids

Barrels

(2,205,000)

Basis Risk

Natural Gas Liquids

Barrels

(17,504,000)

Central Hub Risk - Henry Hub

Natural Gas

MMBtu

49,036,730

Basis Risk

Natural Gas

MMBtu

43,098,730

Central Hub Risk - WTI

Crude Oil

Barrels

(459,000)

(1)Derivative instruments include both long and short natural gas positions. The volume represents the net of long natural gas positions of 3.7 billion MMBtu (million British thermal units) and short natural gas positions of 3.1 billion MMBtu.

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


	March 31, 2022				December 31, 2021
Derivative Category	Assets		(Liabilities)		Assets		(Liabilities)
	(Millions)





Current	$	657	$	(954)	$	619	$	(760)
Noncurrent	204		(426)		166		(429)
Total derivatives	$	861	$	(1,380)	$	785	$	(1,189)

Gross amounts recognized	$	861	$	(1,380)	$	785	$	(1,189)
Counterparty and collateral netting offset	(716)		903		(476)		772
Amounts recognized in our Consolidated Balance Sheet	$	145	$	(477)	$	309	$	(417)

For the three months ended March 31, 2022 and 2021 the pre-tax effects of commodity-related derivatives instruments in Net gain (loss) on commodity derivatives in our Consolidated Statement of Income were as follows:


		Gain (Loss)
	Three Months Ended March 31,
		2022		2021
		(Millions)
Realized commodity-related derivatives designated as hedging instruments		$	—	$	(2)
Realized commodity-related derivatives not designated as hedging instruments		(69)		(34)
Unrealized commodity-related derivative instruments not designated as hedging instruments (1)		(125)		—
Net gain (loss) on commodity derivatives		$	(194)	$	(36)

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(1)Amounts for the three months ended March 31, 2022 include $59 million related to our Gas & NGL Marketing Services segment and $66 million related to our Other segment.

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. As of March 31, 2022 the contractually required collateral in the event of a credit rating downgrade to non-investment grade status was $32 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, 2022, net cash collateral held on deposit in broker margin accounts was $187 million.