President-elect Donald Trump’s promise to cut energy costs for average Americans is already hitting a major hurdle — not from the renewables he blasted on the campaign trail but from the fossil fuels he pledged to “drill, baby, drill.”
New forecasts show the price of natural gas is set to jump in the coming years despite record-high U.S. production. The projections are driven by dramatic increases in demand and too few pipelines to transport the product.
Those market dynamics could cause the costs of heating U.S. homes and manufacturing goods to spike in the coming years.
“We expect prices to rise substantially,” said Paul Cicio, president of the trade association Industrial Energy Consumers of America. “It’s inflationary on all the products we produce, from consumer goods to industrial goods and national defense goods.”
Election observers say inflation was a major reason Trump won at the polls in early November. While stumping for a second term, Trump and his Republican allies slammed Democrats for rising prices, pointing to a rapid increase in the price of electricity under President Joe Biden.
Trump vowed to cut U.S. energy bills by 50 percent in just 12 months. Some experts say that’s all but impossible.
While wind and solar prices are decreasing annually, the U.S. Energy Information Administration says the price of natural gas has ticked up since the election to above $3 per million British thermal units (MMBtu). Gas prices had fallen to less than a $1.50 per MMBtu earlier in 2024, according to EIA, the data-crunching branch of the Department of Energy. The data shows gas consumption outstripping supply, a key market dynamic that often leads to higher prices.
On Tuesday, EIA said it expects the average U.S. benchmark spot gas price to rise from a little above $2 per MMBtu in November to about $3 per MMBtu for the rest of the winter heating season. EIA has predicted that the price of natural gas in the U.S. will average $3 for all of 2025, which would be a roughly 36 percent increase from 2024’s level.
New forecasts from the law firm Haynes Boone show U.S. gas prices reaching about $3.20 per MMBtu in 2026, at which point they plateau for the rest of the decade, even as crude oil prices fall from current levels. That forecast is a slightly lower price than the firm projected in the spring.
A spike would fly in the face of Trump’s pledge. And yet, energy experts say the forecasts are not surprising.
“The industry has shown a remarkable ability to produce more gas on demand. How far that can go? We don’t know,” said Paul Bledsoe, a lecturer at American University’s Center for Environmental Policy and a Clinton-era White House veteran. “It looks like we’re about to enter of period of increased export and domestic demand.”
Demand for natural gas is likely to balloon under Trump, based in large part on liquefied natural gas exports and artificial intelligence data centers that demand a lot of energy. Natural gas is already the most popular way to power homes and businesses in the U.S.
That demand creates faces a “real challenge for the industry to keep prices low,” Bledsoe said.
Lloyd Yates, the American Gas Association’s 2025 chair, told reporters on a call this week that the “forward market curve on natural gas” indicates average U.S. prices in “the $3 range.” Yates, who is also CEO of the utility NiSource, said more U.S. production of gas could keep the price lower.
“Natural gas or energy prices could go down in this country,” he said. “Substantially is the part that remains to be seen.”
When asked whether Trump is sticking to his pledge to reduce energy costs, Trump transition spokesperson Karoline Leavitt said the president-elect “will deliver.”
“President Trump will make America energy dominant again, protect our energy jobs, and bring down the cost of living for working families,” Leavitt said in an email.
‘Demand is increasing’
The Department of Energy is set to release a new analysis this month on the economic and climate impacts of LNG. If the study shows that U.S. prices could rise significantly, LNG critics could use the data to contest future projects. Environmental and consumer groups such as Public Citizen say LNG exports make the U.S. gas market pricier and more volatile.
Many economists have said Trump’s across-the-board tariff pledges, including 25 percent duties on Mexican and Canadian imports, pose a major threat to U.S. prices and average American purchasing power. Tariffs are one of the policy tools that presidents can wield freely.
But the future of natural gas prices is far more complex and, in some ways, out of Trump’s hands.
Electricity demand generally in the U.S. is also set to spike, based on the same demand dynamics along with broad electrification of homes and businesses. A new report from Grid Strategies, a prominent consultancy, shows electricity demand could increase 3 percent annually in the second half of this decade.
Wood Mackenzie, an energy consultancy, predicted in October that electricity demand in the U.S. will increase up to 15 percent by 2029. Similar demand increases would be the biggest in the U.S. for decades. The report argued that electric utilities have “been caught flat-footed.”
To be sure, some utilities like Duke Energy are scrambling to line up new gas-fired power plants for data centers and other purposes. Clean energy advocates say much of the increase in demand can be met with efficiency measures, thereby offsetting the need for more generation. Those advocates have warned state regulators this year to reject new gas plants.
Meanwhile, gas producers are sensing the potential strain on the electricity grid.
Mike Wirth, the CEO of Chevron, said last week that the oil and gas company is aiming to help data center operators build gas plants “behind the meter,” a phrase used to describe energy systems that are not connected to the grid.
“We’re doing some work right now with a number of different people that’s not quite ready for prime time, looking at possible solutions to build large-scale power generation that would not go into the rate base,” he said at an Atlantic Council event. “There’s a sensitivity to increasing electricity rates for the average person, just for the benefit of a few of these tech companies.”
LNG demand is also likely to grab market share. Demand for the product is climbing globally, particularly in emerging economies in Asia.
American LNG exports have spiked in recent years. The U.S. exported 11.9 billion cubic feet per day (Bcf/d) on average in 2023, enough to power millions of homes and industrial operations. All told, DOE has approved LNG projects that could bring exports to at least 48 Bcf/d in the coming years, according to the department.
Trump is expected to sign off on virtually all LNG projects despite the DOE study. That comes as some U.S. businesses say they’re already struggling to lock in pipeline capacity, even as natural gas production is at record highs in the U.S. and expected to tick up slightly next year amid a big deregulation push in Washington.
To address prices, lawmakers on Capitol Hill are racing to strike a deal on permitting changes.
Industry advocates want overhauls to pipeline approvals that will face resistance from Democrats. That means Republicans could go at it alone next Congress with reconciliation rules that require only a simple majority in each chamber.
But even with new legislation, Cicio with the Industrial Energy Consumers of America said prices will go up.
“It takes a long time to build these pipelines, and demand is increasing very fast,” he said. “What little available pipeline capacity that is available anywhere in the country is being locked up by LNG exporters and by and by data centers.
“It’s a combination of these short-term demands that are going to make it very hard in for the next few years, even if we get permitting reform,” Cicio said.
Reporter Carlos Anchondo contributed.
