Natural gas is poised to supplant oil as the United States' primary energy source by 2030, a significant shift attributed to its increasing demand in electricity generation, particularly for booming data centers and AI investments. This trend is further fueled by substantial growth in Liquefied Natural Gas (LNG) exports, with the US expected to account for over one-third of global LNG supply in the early 2030s. The power sector is experiencing an additional 17 billion cubic feet per day (Bcf/d) of gas demand by the mid-2030s from data centers and AI, representing nearly a 50% increase from 2025 levels.
While natural gas prices have remained relatively low for much of the past decade, averaging between $2 and $4 per million British thermal units (MMBtu), Wood Mackenzie forecasts a significant increase, with Henry Hub natural gas prices approaching $5/MMBtu (in real terms) by 2035. This rise is driven by both sustained demand growth and the increasing difficulty and cost associated with expanding supply, as the highest-quality acreage is already in production. The US Energy Information Administration (EIA) also projects a gradual increase in natural gas prices, with the Henry Hub spot price expected to average around $3.34/MMBtu in the second half of 2026 and $3.46/MMBtu in 2027.
Utilities, investors, and data centers are increasingly prioritizing natural gas over renewables-only solutions, recognizing its ability to provide reliable, round-the-clock power. Natural gas' share of electricity generation is projected to remain strong, accounting for 40% in 2026 and 2027. This demand is also influenced by the retirement of coal-fired power plants and updated assumptions regarding renewable incentives. The sustained growth in US LNG export capacity, projected to more than double from current levels, further underscores natural gas' growing dominance in the global energy landscape.
