The era of cheap natural gas in the United States is over. Wood Mackenzie forecasts that Henry Hub natural gas prices will approach $5 per million British thermal units (mmbtu) by 2035, up from the $2 to $4 range that held for most of the past decade. The projection appears in the firm's new report, "Defying gravity: why US Henry Hub natural gas prices are set to rise," which warns that the structural conditions behind a decade of price stability have fundamentally shifted.
The numbers driving this forecast are striking. Power sector demand alone is expected to add 17 billion cubic feet per day (bcfd) by the mid-2030s, a near-50% increase from 2025 levels, with load growth from data centers and AI investment accounting for roughly half the gas demand of the entire existing power sector. Investment decisions for new US LNG export capacity hit a record high in 2025, with more projects reaching final investment decision in 2026. US LNG capacity is on track to more than double from current levels, and the country is forecast to account for more than one-third of global LNG supply in the early 2030s. On the supply side, associated gas—which came at near-zero marginal cost—accounted for roughly half of all US gas supply growth over the past decade. Over the next ten years, that share is expected to fall below 20%.
"The conditions that kept Henry Hub between US$2 to US$4/mmbtu for the best part of a decade are no longer all operating at full force," said Kristy Kramer, Head of LNG Strategy and Market Development at Wood Mackenzie. The report attributes past price stability to rapid play development, near-zero-cost associated gas, and year-on-year productivity gains—tailwinds that have largely run their course. Dulles Wang, Director of Americas Gas and LNG Research at Wood Mackenzie, emphasized that with supply less responsive to price signals than it once was, prices will need to go higher and stay higher to bring new molecules to market, particularly from dedicated gas producers.
The report explains that two structural shifts are working in the same direction simultaneously: demand continues to grow at a sustained pace while supply is becoming harder and more expensive to grow. US producers have spent years drilling their best acreage, and as the highest-quality portions of Marcellus, Permian, and Haynesville are developed, remaining inventory will be less productive and more geologically complex. Breakeven costs have stopped falling, and technology gains in mature plays are now incremental rather than transformative. Meanwhile, the power sector has become structurally more volatile as it leans more heavily on gas to balance intermittent renewable generation, and Henry Hub prices will reflect that volatility.
The report frames the shift in price formation at Henry Hub—from supply-driven to demand-driven—as a fundamental change in the risk calculus for any position exposed to US gas economics. For upstream operators, LNG project developers, and counterparties in long-term negotiations, the price trajectory is a direct input to investment decisions being made now. Kramer warns that as the US moves past one-third of global LNG supply in the early 2030s, buyers are already questioning over-reliance on a single supply source. The scale of the US LNG position may look like a commercial advantage, but those questions will only get louder.