Maguire: US gas-heavy pipeline to fuel tensions with LNG exporters

U.S. energy firms are building the largest gas-fired generation capacity in the world, cementing the position of the United States as the world's biggest natural gas consumer and the gas-fired producer.

The growing dependence on natural gas in the domestic power sector will also exacerbate tensions between the rapidly expanding LNG export sector and the domestic power industry, as the latter is relying on cheap natural gas and abundant supplies to expand.

The increasing competition between power companies and LNG exporters for U.S. Natural Gas could also increase natural gas prices. This may undermine efforts to reduce electricity bills for households and businesses, and the competitiveness of U.S. LNG in world markets.

HITTING THE GASS

Data from the Energy Institute (EI) and Ember, an energy think-tank, show that gas-fired power stations in the United States account for about a quarter of all global gas production, exports and use, as well as around 27% worldwide electricity generation.

Global Energy Monitor data shows that the United States is responsible for 26% (of the total gas power generation capacity) of the world's gas power network.

The U.S. has a gas capacity of approximately 570,000 megawatts, which is far more than any other country. This includes the 166,000 megawatts in China (second place) and the 113,000 megawatts in Russia (third place).

GEM data indicates that the U.S. is ranked third in terms gas capacity under construction. China is currently building 41,000 MW, compared with 24,000 MW in Saudi Arabia, and 16,300MW in the U.S.

The U.S. has regained the top position in terms of the gas capacity of so-called "pre-construction", which is the process of identifying generation sites and securing the appropriate permits before actual construction.

FAST-GROWING PIPELELINE

According to GEM's latest global data, the U.S. is close to 100,000 MW in new gas-fired capacity that has not yet been built.

This capacity total is noteworthy for two reasons.

First, the U.S. total is far greater than the capacity pipeline planned in other countries at the same stage of development, including the 61,500MW in second-placed China and the 29,200MW in preconstruction in third-placed Vietnam.

The U.S. will see a faster growth in gas-fired electricity capacity than other countries, and this is expected to continue for the near to mid term.

Second, the U.S. total of pre-construction is six times greater than just one year earlier, when 15,000MW of new gas fired power capacity were classified as being in preconstruction.

The surge in U.S. pre-construction gas capacity since mid-2024 underscores the urgency of U.S. energy firms to increase generation using all available means, to meet rapidly increasing power demands from data centers and AI applications, as well as other major electricity users.

The dramatic increase in gas capacity is also a reflection of President Donald Trump's return to office, whose administration has cut federal funding for renewable energy and supported rapid fossil fuel growth.

LNG IMPACT

As the gas-fired generation capacity in the United States increases, the energy sector will consume more natural gas.

This means that LNG exporters will face increased competition in the U.S. for gas supplies, which could lead to higher prices on the gas market.

According to the U.S. Energy Information Administration, the U.S. Natural Gas Production is expected to increase by around 3% in 2025 from the near-record 2024 total to new heights.

These gas production estimates, however, are subject to change. They are based on oil price projections, which may affect the oil and gas extraction rate from oil-rich deposits in the United States.

The benchmark U.S. crude prices have dropped by more than 10% so far in 2025 due to increased production from OPEC and a slow growth in oil demand in key oil import countries.

If ongoing talks between the U.S., Russia and Ukraine to end the conflict in Ukraine are successful and lead to an easing in sanctions on Russian oil supplies, the price of oil could drop even further.

This scenario could lead to a decrease in the production of oil and natural gas in the U.S. and an increase in gas prices if power companies and LNG exporters continue to demand gas.

The peak of production is approaching

According to the EIA’s most recent long-term energy forecast, regardless of the production situation in the near future, the overall U.S. gas output will reach its peak early next decade, and then remain relatively flat until 2050.

This assessment is based upon the future production of key U.S. Gas Basins. Many have already reached their peak output and are considered to be in terminal decay.

The outlook for the next few years still suggests abundant gas supplies, which should allow both LNG exporters and power users to grow.

The gas market faces a number of unknowns, including the future growth of the power sector. This sector is in a rapid expansion phase, and could increase if alternative energy sources are not as abundant as expected.

Recent policy changes by the Trump Administration to reduce support for renewable energy project could lead utilities to add more gas-powered power instead of adding more solar or wind farms.

This could in turn increase gas demand by another gear and trigger a sustained tightening of the U.S. market, which could underpin gas prices steadily and lead to an intensified competition for LNG supplies.

These are the opinions of the columnist, an author for.

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(source: Reuters)