In this episode, we dive into what’s driving natural gas prices higher and what mineral and royalty owners can expect in 2026 and beyond. We explored how two major forces are reshaping the market: the explosive growth of AI data centers that require massive amounts of electricity, and the continued expansion of liquefied natural gas (LNG) exports to meet global demand.
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Hype or Reality?
Did you know that some of the planned AI data centers will consume enough power to supply hundreds of thousands of homes, and projections for additional natural gas demand by 2030 range anywhere from 1.3 billion cubic feet per day on the low end to 16 billion cubic feet per day on the high end. We discussed specific mega projects like Microsoft’s five-gigawatt data center in Texas and Meta’s four-gigawatt facility in Louisiana, both of which will likely rely heavily on natural gas for power generation. We also examined the liquefied natural gas export landscape, with new terminals coming online that could add another 15 billion cubic feet per day of demand by the end of the decade. Of course, there are uncertainties to consider, including potential technology improvements that could reduce power consumption, political headwinds around climate policy, competition from other global suppliers like Qatar, and the possibility that we’re in an AI investment bubble that could burst. Despite these risks, the underlying fundamentals point toward significantly higher natural gas demand in the coming years, which should translate to better prices for those of us holding natural gas royalties.
Here’s what this means for you as a mineral and royalty owner. Natural gas prices have been depressed for years due to oversupply, but these new demand drivers could finally push prices higher and keep them there. Companies are already signing long-term contracts to secure natural gas supplies for their data centers, and export terminals are locking in commitments years in advance.
Of course, there are risks to consider. Technology could become more efficient and require less power than currently projected. Political changes could favor renewable energy mandates that slow natural gas adoption. We could also see a correction in AI company valuations that dampens investment in new data centers. Additionally, other countries like Qatar are expanding their own liquefied natural gas production, which could compete with American exports.
Despite these uncertainties, I believe we’re entering a period where owning natural gas royalties is going to be increasingly valuable. The fundamentals are shifting in favor of higher sustained demand, and that should translate into better royalty payments for those fortunate enough to own natural gas interests.
If you want to hear our full analysis, including specific project examples and a breakdown of the numbers, be sure to listen to this episode!
Resources
LNG Export Projects and Capacity
- North America’s LNG export capacity is on track to more than double by 2028 – U.S. Energy Information Administration
- Global LNG Capacity Tracker – International Energy Agency
- U.S. LNG Export Terminals – Existing, Approved not Yet Built, and Proposed – Federal Energy Regulatory Commission
- The eighth U.S. liquefied natural gas export terminal, Plaquemines LNG, ships first cargo – U.S. Energy Information Administration
- New LNG Export Capacity In U.S, Mexico And Canada Has Significant Implications – American Oil & Gas Reporter
- LNG exports and U.S. power price – Institute for Energy Economics and
AI Data Centers and Electricity Demand
- AI is set to drive surging electricity demand from data centres – International Energy Agency
- Energy demand from AI – International Energy Agency
- AI to drive 165% increase in data center power demand by 2030 – Goldman Sachs
- AI data centers fuel quicker growth in power demand – Bloomberg Professional Services
- Powering the US Data Center Boom: The Challenge of Forecasting Electricity Needs – World Resources Institute
- Data Centers, LNG Exports To Boost 2025 Natural Gas Prices – American Oil & Gas Reporter
- Natural Gas Demand for Data Centers? It’s No Hype, Says Kinder Morgan Exec – Natural Gas Intelligence
- Data Centers Could Add 6 Bcf/d to Gas Demand: EDA Forecast – East Daley Analytics
- Why It’s So Difficult to Estimate Data Center Demand for Natural Gas – Natural Gas Intelligence
- Fueling the Future: Natural Gas and the Rise of Data Center Power Demand – Woodway Energy
- Data Centers and Natural Gas – Norton Rose Fulbright
- How natural gas is powering the US AI data center boom – Data Center Dynamics
Natural Gas Price Forecasts
- Short-Term Energy Outlook: Natural Gas – U.S. Energy Information Administration
- Natural Gas Prices to Rise in 2025 on Way to $4 in 2026 – Natural Gas Intelligence
- Natural Gas Prices Expected to Rise Amid Increasing LNG Exports and Data Center Demand – Institute for Energy Research
- Natural Gas Prices in the U.S.: What’s Fueling the Strength in 2025? – Peoples Company
- Natural Gas forecast 2025–26: Price targets and market outlook – Capital.com
- Eastern U.S. natural gas increasingly meets LNG-fueled demand growth – U.S. Energy Information Administration
- U.S. Natural Gas Futures Surge on Supply Tightness | OilPrice.com
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Disclaimer: This episode and accompanying show notes are provided for general information purposes and should not be construed as financial, legal, or investment advice. For guidance specific to your situation, please consult with qualified legal and financial professionals.
