It may take more than a Sharpie pen and White House cheerleading to change natural gas output levels in the United States.
President Donald Trump’s sweeping measures aimed at maximising U.S. oil and gas production mark a U-turn in energy policy from President Joe Biden’s term, and make it clear that Trump expects domestic fossil fuel production to rapidly rise.
But even with faster permitting for exploration and sales, the new Trump administration may struggle to boost U.S. gas output without help from local and international prices.
That’s because historically weak gas prices for electricity generation, not restrictive former policies, were the main factor in suppressing U.S. gas production in 2024.
If gas prices trend steadily higher in 2025, Trump’s hopes for higher gas output will materialise and will help propel U.S. energy product exports to new heights.
But higher gas prices would also go directly against Trump’s aims to lower energy costs, which were a major factor behind his successful election.
That presents a potential conundrum for Trump’s energy advisers who must now somehow motivate higher gas output without triggering higher energy prices for consumers.
HISTORIC DROP
U.S. gas output from shale and tight gas wells – which account for over 75% of total U.S. natural gas supplies – fell in 2024 for the first time in over a decade as average prices for gas used in electricity generation dropped to historic lows.
The power sector is by far the largest gas consumer in the U.S., and accounted for around 43% of total gas use in 2024, according to the U.S. Energy Information Administration (EIA).
Average prices received by gas producers from power firms were $2.77 per thousand cubic feet (Mcf) in January to October 2024, EIA data shows.
That compares to an annual average of $4.13 per Mcf from the same user base from 2013 through 2023, and means that some gas suppliers received 33% less for their gas in 2024 than they received over the previous decade from their top customer.
Source: By Gavin Maguire from Reuters.com