Rystad Energy

Cheap No More: How Rising Demand Is Reshaping US Natural Gas, with Artem Abramov and Jai Singh

The episode examines how the United States’ natural‑gas market is transitioning from a decade of ultra‑low prices to a tighter, higher‑cost environment. Rising demand from newly approved LNG export projects, rapid data‑center build‑outs supporting AI workloads, and broader electrification are challenging the shale sector’s ability to keep gas cheap. Analysts note that while Henry Hub is currently below $3/MMBtu, structural forces are pushing the price band toward $4‑5/MMBtu over the next decade. Seven Gulf‑coast LNG projects, representing roughly 13‑14 BCF per day of feed‑gas, have received final investment decisions, and data‑center gas consumption could add another 3‑4 BCF per day, albeit with significant permitting risk. Existing basins—Haynesville, the Permian, and the Appalachian—will meet near‑term demand, but tier‑2 plays will only become viable if prices climb to $5‑6/MMBtu. Jay Singh highlighted the recent Freeport outage’s price impact and the $10 billion Japanese acquisition of Haynesville assets as evidence of a market shift. Artem Abramov emphasized the “black‑box” uncertainty around tier‑2 basin response to higher prices, while both stressed that data‑center forecasts are being tempered by efficiency gains and project cancellations. The outlook suggests higher domestic gas prices for consumers and utilities, while reinforcing the United States’ position as a major LNG exporter. Midstream capacity upgrades and strategic investment in higher‑cost basins will be essential to balance export ambitions with domestic supply security.