For years, the U.S. market benefited from a surge in production as operators prioritized high-quality plays and extracted abundant associated gas from oil drilling. These efficiencies kept Henry Hub prices anchored, allowing the U.S. to transition from a domestic player to the world’s largest LNG exporter. Exports grew from 0.5 billion cubic feet per day in 2016 to 15.0 Bcf/d by 2025, a trajectory projected to reach 18.1 Bcf/d by 2027.

However, the market is hitting a structural ceiling. Wood Mackenzie analysts warn that the most productive acreage is already in use, technology gains are plateauing, and a decline in oil-directed drilling will likely shrink associated gas volumes. Simultaneously, the power sector is facing an unprecedented surge in demand, with nearly 252 gigawatts of gas-fired capacity currently in various development phases to support AI infrastructure and on-grid requirements. Kristy Kramer, Head of LNG Strategy at Wood Mackenzie, notes that the power sector alone demands an additional 17 Bcf/d by the mid-2030s. While U.S. gas will remain competitive against higher global prices in Europe and Asia, domestic consumers must prepare for a new, more expensive reality as these supply-side tailwinds evaporate.