The Trump Administration could face an energy dilemma ahead of the midterm elections. The U.S. energy dominance agenda and booming LNG exports – pillars of the Administration’s policy – are boosting domestic natural gas demand and raising American energy bills.
U.S. LNG exports are hitting record highs, and are set to continue setting records in the coming months and years as new plants are being commissioned, built, and approved, with the strong backing of the Trump Administration.
However, soaring demand for feedgas from the export facilities is putting upward pressure on residential gas prices in the United States and on power prices, too, since the power sector is the top domestic gas consumer. Industry is the second-largest user of natural gas, while feedgas for LNG exports has now climbed to third, having outpaced residential gas use in recent years.
Record Gas Output, Soaring LNG Exports
The U.S. is estimated to have exported 15.0 billion cubic feet per day of LNG last year, up by over 25% from 2024, per data from the Energy Information Administration (EIA) in its latest Short-Term Energy Outlook (STEO).
LNG exports are set to continue rising to an annual average of 16.4 billion cubic feet per day (Bcf/d) this year, and further up to 18.1 Bcf/d in 2027, according to the EIA’s estimates.
Higher natural gas demand and prices are set to incentivize more drilling in the gas-directed shale basins Haynesville and Appalachia, while associated gas output from the Permian basin’s oil production is also set to rise as the increasing gas-to-oil ratio (GOR) will drive natural gas production growth despite wobbling oil prices.
As a result of these factors, total U.S. natural gas production is set to reach record highs in 2026 and 2027, the EIA reckons.
U.S. natural gas marketed production will increase by 2% to average 120.8 Bcf/d in 2026 and then further rise by another 1% to a record-high 122.3 Bcf/d in 2027, according to the administration. Appalachia, the Permian, and the Haynesville basins will drive this production growth.
So far, so good. Higher prices will drive higher production, which, in turn, could ease the upward pressure on gas and electricity prices.
However, the slight rise in supply faces soaring feedgas demand from LNG export facilities and surging demand for gas-fired generation to meet the power-hungry Big Tech firms and their plans to accelerate data center build-out.
The U.S. sees unprecedented power demand growth—AI infrastructure, data centers, and advanced manufacturing are driving the first meaningful growth in U.S. power consumption since the 1990s. The growth is set to average about 2% each year over the next decade, making new electricity generation capacity critical to supporting the advance in AI and the onshoring of manufacturing.
And natural gas would play a critical role in meeting part of this increase in power generation.
“Natural gas will benefit significantly from the rising electricity demand and the requirement for 24/7 uninterrupted supply. It is most flexible among all energy sources and an abundant domestic resource,” Goldman Sachs said in a report last year.
With steadfast support and favorable pro-fossil fuel policies of the Trump Administration, gas will be a winner in the U.S. power demand surge.
Structurally Higher Gas Prices
But the more prominent role of gas would drive higher prices, which are already filtering down to wholesale and consumer prices.
Average wholesale day-ahead electricity prices at most major trading hubs in the Lower 48 states rose in 2025 compared to 2024, driven largely by higher natural gas prices to electric generators, the EIA says.
The rising energy bills will not see a relief, at least not this year, as booming LNG exports are intensifying competition for America’s domestic gas output.
Exporters can afford higher benchmark gas prices in the U.S. more easily than other domestic consumers, because the LNG export price at which they sell their LNG cargoes abroad is currently about double the Henry Hub price, Reuters columnist Gavin Maguire argues.
The continued growth in LNG exports could further tighten the gas supply for U.S.-based consumers, including industry, power generators, and residential customers.
This could be a thorny issue for the Trump Administration in the midterm elections this year as retail customers could vote with their wallets and express dissatisfaction that they haven’t seen President Trump’s campaign promise to “slash energy bills” fulfilled.
Beyond the near-term prospects of U.S. natural gas demand and prices, long-term projections are not in favor of the U.S. consumer, either.
According to Wood Mackenzie, the LNG export growth and the data center boom will boost U.S. gas demand by nearly 40% in the next 10 years, lifting domestic Henry Hub prices to an average US$4.9/MMbtu, or 15 euros per MWh, in the 2030-2035 period. This would be an almost 50% jump compared to 2025 levels, WoodMac noted, and concluded, “Effectively, US LNG supply growth will come at a cost to US consumers and benefit those in Europe.”
By Tsvetana Paraskova for Oilprice.com
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