Gary Coffman writes:

If you have the same size pipe on the downstream side,
and the same mass of gas flowing in both the upstream and downstream
pipes, where did the pressure go?

Air expands in going through a regulator. The volume of the connecting
pipes has no relevance; this is just one example of your faulty analysis.
The volume of the *flow* is what counts.

So the energy not required to meet load demand at the set pressure
does indeed remain in the reservoir.

No. Some remains, some is lost.

1. ANY EXPANSION OF COMPRESSED AIR NECESSARILY DOES WORK.

2. AIR EXPANDS GOING THROUGH A REGULATOR.

3. THUS, A REGULATOR ITSELF EXPENDS WORK.

You seem to deny these points and conclusions, and I can only assess that
you are hopelessly confused by your faulty analysis.