Demand Push

2026-07-26 · Source: Doomberg · Field: Energy & Utilities — Traditional Energy & Fossil Fuels, Energy Markets & Policy · Depth: Intermediate, quick

Summary

The article examines persistent predictions of a US natural gas supply shortage, contrasting them with historical US shale gas production. This production has more than doubled in 15 years, surpassing 100 billion cubic feet per day (bcf/d) in the lower 48 states. It introduces Matthew Smith's thesis, from Chronometer Partners' CIO, Matthew Smith. After 18 months of modeling, Smith forecasts an unprecedented US natural gas shortage beginning in 2028. This could potentially exhaust working storage by 2030. He attributes this crisis to rapidly escalating demand, especially from AI data centers, not production exhaustion. While the author expresses skepticism about Smith's "big predictions," they agree that fast-growing demand could lead to a high-price crisis.

Key takeaway

For investors evaluating long-term energy infrastructure or AI data center development, understand that demand-side pressures, not just production, are critical. Your investment models must account for rapidly escalating natural gas demand, especially from AI. This could lead to price volatility and potential shortages by 2028. Re-evaluate assumptions about abundant, cheap natural gas for future projects.

Key insights

US natural gas supply is robust, but rapidly increasing demand, particularly from AI, poses a significant risk of future price crises and shortages.

Principles

• Production growth often outpaces supply exhaustion fears.
• Rapid demand increases can drive energy price crises.

Method

Matthew Smith modeled every well, pipeline, storage facility, and power plant in the American natural gas system to forecast future supply and demand.

Topics

• US Natural Gas Production
• Shale Gas
• Energy Demand Forecasting
• AI Data Centers
• Natural Gas Shortage
• Energy Market Analysis

Best for: CTO, VP of Engineering/Data, Executive, Investor, Consultant, Director of AI/ML

Related on AIssential

• Matthew Smith — Natural Gas: The Next Bottleneck - [Invest Like the Best, EP.483] — US natural gas supply faces an imminent, structural deficit by 2028, driven by AI and LNG exports, leading to unbounded price risk.
• Energy IPOs surge as investors hunt for ways to play AI boom — AI's energy demands are fueling a speculative surge in energy IPOs, attracting investors despite high post-IPO volatility.
• Data centers’ energy demand threatens Trump’s “Made in America” plan — AI data center energy demand is escalating electricity costs for US manufacturers, directly undermining "Made in America" initiatives and grid stability.
• Blue Chips — The AI boom is driving demand for "behind the meter" natural gas data centers, despite regulatory hurdles and slow progress.
• The AI Data Center Delusion — The AI data center boom faces critical power grid and supply chain constraints, forcing reliance on fossil fuels despite "Net Zero" pledges.
• Open Thread 424 — Global energy security is robust, with multiple mechanisms mitigating severe oil supply shocks from geopolitical events.

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Editorial summary, takeaway, and curation by AIssential. Original article published by Doomberg.