US gas-heavy power buildout sparks tensions with LNG exporters
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The United States is reshaping the global natural gas market by accelerating both domestic power generation and exports. On one side, the country has solidified its position as the world’s largest producer and consumer of natural gas. On the other, the rapid expansion of gas-fired power plants is creating friction with liquefied natural gas exporters that depend on an abundant supply to compete internationally. Nearly 100,000 megawatts of new gas-fired capacity are in the pre-construction stage, more than six times the total from a year ago, signaling a structural shift in how the United States balances demand at home with commitments abroad.
This buildout is unfolding as electricity use rises, driven by artificial intelligence systems and data centers that consume vast amounts of energy. Federal policy has reinforced this direction by favoring fossil fuels over renewables on the grounds of reliability and cost. The result is a contest within the American energy sector, where utilities and exporters are increasingly competing for the same resource.
Gas-fired power generation expands at record speed
The current wave of gas plant construction is larger than any in decades. Data shows that the United States now leads the world not only in active gas production but also in projects under development. More than 120 new gas-fired plants, totaling about 80 gigawatts, are expected to come online by 2030. That total dwarfs the 35 gigawatts added over the past five years and places the United States ahead of countries such as China and Vietnam, where planned capacity is significant but smaller.
Utilities are pursuing new units in anticipation of surging demand, while investors view natural gas as a steadier option than renewables when policy support fluctuates. Producers also prefer gas because it provides reliable output during peak hours, complementing renewable sources. The volume of construction underscores how gas remains central to the American grid, even as climate debates continue.
Electricity demand from AI and data centers reshapes the market
At the center of this trend is a sharp shift in demand patterns. Data centers supporting AI, cloud services, and digital platforms require immense amounts of electricity, often concentrated in specific regions. Industry forecasts suggest these facilities could double their power needs by 2030, altering long-term planning for utilities and regulators.
Gas-fired generation is often seen as the most reliable option for these requirements. Renewables continue to expand, but their variable output makes them less suited for facilities that run at full capacity around the clock. Policymakers have recognized this, with some officials describing gas as critical to preventing shortages. The outcome is that more natural gas is directed toward domestic power markets, leaving less available for exports.
Competition between LNG exporters and domestic users
The LNG sector has been one of the most notable success stories of the US energy industry, supplying Europe, Asia, and other markets. Exports averaged nearly 12 billion cubic feet per day in 2024 and are forecast to rise to 16 billion cubic feet per day by 2026. At the same time, domestic consumption is climbing past 91 billion cubic feet per day in 2025, with more growth expected.
This dual surge places stress on the supply chain. Analysts note that demand growth is outpacing supply, with an increase of 3.2 billion cubic feet per day expected in 2025 compared with only 1.4 billion cubic feet per day of additional production. The imbalance could lift domestic prices, raising utility costs and weakening the competitiveness of US LNG abroad. For exporters already competing with Qatar and Australia, higher prices represent a serious challenge.
Supply outlook and risk of bottlenecks
For now, production continues to expand. The Energy Information Administration estimates output will reach almost 106 billion cubic feet per day in 2025, up from 103 billion the prior year. Producers who scaled back drilling in 2024 are planning to increase output in response to strong signals from both utilities and exporters. The longer-term picture is less certain. Several forecasts suggest US gas production may peak in the early 2030s before leveling off.
If that occurs, the United States could face structural limits, where both domestic power producers and exporters are constrained. The risk extends beyond higher prices at home, raising questions about credibility in global markets where buyers seek reliable long-term supply contracts. These concerns add urgency to discussions over diversifying the energy mix, including renewables, nuclear power, and storage.
The competition between domestic consumers and exporters has consequences that extend beyond pricing. At stake is the country’s ability to maintain energy security while sustaining influence in global LNG markets. Rising tensions may also redirect investment flows, as some financiers favor projects with guaranteed domestic returns over ventures exposed to global volatility.
The effects reach beyond the United States. European buyers, still reliant on US LNG after the loss of Russian supply, are watching closely for signs of tighter availability. In Asia, where LNG demand continues to grow, higher US prices could shift contracts toward competitors. The trajectory of American energy policy will determine whether the country can sustain its role as both the world’s largest gas consumer and a leading exporter.
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