Natural gas usage in the United States has skyrocketed this year, reaching unprecedented levels and significantly impacting global gas demand. The surge in natural gas-fired power generation is attributed to a combination of warmer weather, increased electricity necessities, and the rapid rise of AI technology.

According to recent data compiled by LSEG and reported by Reuters, U.S. power producers generated a staggering 55.6 million megawatt hours (MWh) from gas-fired plants between January and September 2023. This marks a 5% increase from the same timeframe in 2022, making it not only the highest output since 2021 but also indicative of a larger trend toward reliance on natural gas.

Since June, natural gas has constituted an all-time high of 46% of the electricity generated in the U.S., highlighting its pivotal role in the energy landscape. However, this trend poses a challenge to the Biden Administration's ambitious goal of establishing a ‘clean power’ grid by 2035, as the government's focus on transitioning to renewable energy sources comes under pressure from rising gas consumption.

The dramatic increase in power demand can be linked to several factors including the electrification of various sectors and the need for power to sustain data centers and support the burgeoning AI industry. With high energy demands from tech manufacturing and the AI surge driving the electric grid, electricity-generating companies are ramping up investments in natural gas infrastructure.

In fact, during the first half of 2024, electricity-generating firms unveiled plans to add new gas-powered capacity that equals the total amount announced throughout the entirety of 2020. This reflects both confidence in the reliability of natural gas and its significant role in meeting growing energy needs.

Furthermore, after a period of stagnation in power consumption, the U.S. is experiencing a substantial uptick in electricity demand, fueled by advances in technology and expanding industries that rely heavily on constant energy supplies. Historically, natural gas has been the largest contributor to U.S. electricity generation, comprising approximately 40% of the national energy mix.

As the nation balances its immediate energy needs with long-term climate goals, the debate around natural gas usage continues to intensify. Will the U.S. shift gears to green energy fast enough to counter the lure of natural gas? Only time will tell. Stay tuned for more updates on this unfolding energy saga, as the world watches closely!