The United States is in the middle of an energy transformation, and natural gas sits at the center of it. The same fuel that was supposed to be a bridge to renewables is now being called upon to power the AI revolution, sustain manufacturing reshoring, and keep the lights on as coal retires faster than alternatives can replace it.
The United States is on the verge of a natural gas shortage so severe that it could undermine the AI boom, strain the electric grid, and trigger the kind of energy crisis that Americans haven't experienced in decades.
The issue is that the natural gas pipeline system wasn't built for what we're now asking it to do. You've got LNG export facilities pulling massive volumes to the Gulf Coast, data centers and AI infrastructure demanding firm power in places that never needed it before, and a renewables buildout that paradoxically increases gas demand by requiring backup generation for when the wind doesn't blow and the sun doesn't shine.
Starting in 2028, AI data centers and LNG exports will need more gas than the country can produce and deliver. By his math, the US could exhaust its working natural gas storage by 2030. In his words, the upside risk to prices becomes unbounded and convex.
The bottleneck isn't in the production of natural gas — there's plenty of gas in the ground. The bottleneck is in the infrastructure to move it, process it, and export it. And that infrastructure takes years to permit, finance, and build.
The fundamental problem is that America has been extraordinarily successful at producing natural gas, but the infrastructure to move it, store it, and export it has not kept pace with demand growth. We are essentially running a system that was designed for a different era, and the consequences of that mismatch are going to become very apparent very soon.
4d ago
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