Betting the Grid on Gas

Much of the United States’ ability to meet soaring power demand – and do so affordably – includes a big and risky bet on the natural gas industry. Demand for gas and gas turbines from the power sector is enormous, and so too is demand for natural gas from the nation’s rapidly growing liquefied natural gas (LNG) export capacity.

Questions are mounting over whether natural gas production can keep pace, whether the waiting list for gas turbines will ever shorten and just what it might mean for the U.S. economy if natural gas prices begin to break out as a growing number of forecasts expect.

Something is going to have to give. Either gas production stays remarkably strong with prices low while gas turbine demand continues to outpace supply, or colossal new demand from data centers and LNG exports begins to overwhelm supply, leaving American consumers facing a new kind of gas price shock.

Either way, the case for maintaining – and strengthening – dispatchable fuel diversity is only growing stronger. With the uncertainty and risks ahead, the affordability, reliability and immediate availability of coal aren’t just increasingly valuable, they’re essential.

The Rush for Gas

The scale of the planned gas buildout is hard to comprehend. Global Energy Monitor, a leading international research group, reports that U.S. gas-fired capacity in development jumped 50% just during the first half of 2026, reaching 378 gigawatts (GW). A stunning 189 GW of that capacity is intended to directly serve data centers—nearly double the amount at the end of 2025.

That places gas turbine manufacturers in a position of staggering demand. GE Vernova finished the second quarter with a 116 GW gas turbine equipment backlog. Industry-wide turbine backlogs now stretch past the end of the decade.

The Price Problem

Producing the equipment to meet gas-fueled power demand is an enormous challenge, but producing the gas to affordably meet demand could prove to be the far taller hurdle.  

Wood Mackenzie forecasts Henry Hub natural gas prices approaching $5 per million BTUs by 2035–more than double the average price of the past decade.

The same forecast sees power-sector demand alone requiring another 17 billion cubic feet per day of gas by the mid-2030s. At the same time, U.S. LNG export capacity is on track to double, with the U.S. expected to supply more than one-third of the global LNG market by early next decade.

Gas demand is simply outpacing the ability to expand supply. And there’s another challenge: if oil prices retreat from today’s highs, U.S. oil production is likely to fall, and so too will associated gas produced along side it.

The Associated Gas Wild Card

A tremendous volume of U.S. natural gas comes as a byproduct of drilling for oil. In the Permian Basin alone – the nation’s largest oil field stretching across west Texas into New Mexico – associated gas accounts for nearly half of total gas production.

Oil prices are elevated today amid the war with Iran, but the picture could change rapidly if the conflict ends. Treasury Secretary Scott Bessent recently suggested oil could fall to $40-$50 per barrel as constrained global supply returns to market.

A sharp decline in oil prices could weaken drilling economics and wallop associated gas production precisely when the power and LNG sectors need more gas than ever.

America’s Price-Shock Absorber

If natural gas prices do rise – a signal to temper demand – we’re going to need the coal fleet more than ever. Our immense coal reserves and our underutilized coal plants provide an irreplaceable hedge against natural gas price volatility.

We saw exactly that dynamic in 2025. During the first half of the year, natural gas prices jumped and the coal fleet responded. Increased coal generation displaced higher-cost gas and delivered an estimated $30 to $40 billion in combined power-sector and natural gas system savings, according to recent economic analysis. That optionality – that price shock-absorber – is becoming only more valuable.

Can natural gas simultaneously fuel a historic expansion of power generation, supply a rapidly growing LNG industry and affordably meet an unprecedented surge in electricity demand? Perhaps. But sound energy policy can’t be built on wishful thinking.