Expectations are rising for a significant increase in US natural gas demand over the next few years.
This anticipated surge is primarily fueled by two factors: expanding LNG export capacity and greater consumption from the power sector, driven by continued investment in data centers, according to an ING Group report.
The US stands as the world’s leading consumer of natural gas, accounting for over 20% of global demand, with usage nearing 90 billion cubic feet daily.
Over the past decade, US natural gas demand has expanded by almost 5% annually.
This growth trajectory is closely tied to the shale revolution, which dramatically boosted domestic supply, providing consumers with a low-cost energy source.
Concurrently, the increasing focus on decarbonisation has accelerated the decline of coal’s role in the US power generation mix since its peak in 2007.
US power sector
The power sector has historically been the primary driver of natural gas demand, which is expected to continue growing.
This growth will be fueled by increasing power demand stemming from the expansion of data centers in the US, ING said in its report.
Furthermore, demand from the industrial sector may also strengthen due to the potential onshoring of production in the US, a trend influenced by the Trump administration’s trade policy.
Robust demand growth is also anticipated in other sectors, notably LNG, driven by the significant pipeline of LNG export projects in the US.
US gas demand is projected to increase by up to 20 billion cubic feet per day (bcf/d) by 2030, ING’s report showed.
This growth is substantial, equating to 19% of current US dry gas production, and is primarily driven by the rising need for feedgas in Liquefied Natural Gas (LNG) plants.
The actual number may be lower than projected if the LNG plants do not operate near full capacity.
“This is not unrealistic when you consider that the global LNG market is set to be in large surplus over the latter part of this decade,” ING analysts said.
The power sector is expected to experience the next strongest demand growth.
Despite the potential for an additional 4.2 bcf/d in demand growth by 2030, this projection is less robust than the 6 bcf/d demand increase observed between 2019 and 2024, according to the report.
A major factor limiting faster demand expansion in the power sector is the ongoing production bottlenecks affecting gas turbines.
Data centres and manufacturing
The US AI-driven data centre sector is quickly expanding, and its electricity consumption is projected to rise significantly from 4% today to more than 10% of total US electricity by the year 2030, ING said.
To meet this surge, natural gas has become the preferred source thanks to its low cost and reliability.
Natural gas is expected to provide 130 TWh of the almost 250 TWh of new electricity generation projected for US data centers by 2030, according to the International Energy Agency.
Increased electricity demand is not only anticipated from data centres but also from the manufacturing and industrial sectors, spurred by the Trump administration’s “America-first” onshoring strategy.
One significant example is the aluminium industry.
If Section 232 tariffs lead to the addition of primary aluminium smelting capacity to meet domestic needs, the sector’s power consumption could jump from approximately 10 TWh to 60 TWh.
This increase would represent about 1.5% of total US power demand, though the actual realisation of this investment remains uncertain.
“As a result, power companies are planning to expand power generation from natural gas. As of September 2025, approximately 40 GW of gas-fired capacity is scheduled for development by 2030 – double the 21 GW planned a year earlier,” ING Group added.
Flat industrial gas demand; Trump policy an upside risk
The industrial sector’s use of natural gas is varied, encompassing heating, material processing, power generation, and serving as a raw material for chemical and fertiliser manufacturing.
In 2024, this sector accounted for 26% of domestic natural gas demand in the US, according to the report.
Over the past decade, demand from the industrial sector has generally remained stable, with the exception of an expected decline during the Covid pandemic.
According to the EIA’s Manufacturing Energy Consumption Survey (MECS) and broader EIA data, the chemical sector is the largest industrial consumer of natural gas, representing 37% of total industrial demand.
This gas serves a dual purpose, functioning as both a feedstock and a source of heat and energy.
The oil refining sector accounts for about 12% of industrial natural gas demand (EIA MECS), using it as both fuel and a feedstock for hydrogen to reduce diesel’s sulfur.
However, with US refining capacity likely peaking, natural gas demand from this sector is expected to decline.
The US is projected to lose 550k barrels per day of refining capacity, roughly 3% of the total starting in 2025, over 2025-2026, the report showed.
Demand for natural gas within the industrial sector is forecast to remain largely consistent over the next few years.
The EIA projects only a slight decrease in industrial demand, anticipating a decline of just 0.4% between 2024 and 2030.
However, there is a great deal of uncertainty around how demand evolves, largely due to the Trump administration’s push to bring back manufacturing to the US.
Marginal growth from residential and commercial sectors
Space heating is the primary driver of natural gas demand in the US residential and commercial sectors, which account for 13% and 10% of total demand, respectively, ING Group said.
Despite this, demand in these sectors has been relatively flat, with increasing electrification and adoption of renewables exerting some downward pressure.
The sale of heat pumps in the US has seen a noticeable increase over the last ten years.
This growth has been further boosted by the Inflation Reduction Act (IRA), which provides a 30% tax credit for installation expenses, up to a maximum of $2,000.
US heat pump sales have surpassed gas furnace sales since 2022, according to AHRI data.
The Inflation Reduction Act (IRA), passed in 2022 with credits available from 2023, likely accelerated this trend, reducing natural gas demand in residential and commercial sectors.
However, under the “One Big Beautiful Bill Act,” this credit is scheduled to be scrapped at the end of 2025, which could slow the trend and provide more support for natural gas demand than previously expected.
The EIA projects 1% compound annual demand growth through 2030 for these two sectors.
However, the weather is key to the outlook due to the large share used for space heating.
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