Time To Update Your Priors: Natural Gas Is Expensive

When fracking spread across our country in the early 2000s, it ushered in an era of cheap gas and fundamentally changed the American energy landscape. Gas toppled coal to become the dominant source of electricity generation in the country–– and the United States became the world’s largest natural gas producer.

However, we’ve gotten so used to the idea of cheap natural gas that we’re failing to reassess whether that narrative is still true. The data is increasingly telling us it isn’t – we’re now the world’s largest natural gas exporter and natural gas power plants are far more expensive to build – both of which force Americans to pay more for power. That means we risk locking ourselves into expensive decisions with decades-long consequences.

The fracking revolution began nearly 20 years ago—today’s reality is different. If government officials and utility executives still think we’re in the era of cheap natural gas, their decisions will be driven by outdated knowledge, and they won’t be able to fight rising power prices if they invest in the wrong technology.

Natural gas prices face upward pressure on two fronts

Soaring data center electricity demand has sent utilities scrambling to add new sources of electricity to the grid. In places like Virginia, ground-zero for the data center surge and home to roughly 20% of the world’s data centers, the gas industry is shouting from the rooftops that gas is needed to meet this new demand while keeping costs low.

That premise is wrong on multiple levels.

First, it’s essentially impossible to build a new gas-fired power plant by the end of this decade. Gas turbine manufacturers like GE Vernova, Siemens Energy, and Mitsubishi scaled back their production capabilities years ago when new turbine orders were few and far between. As a result, power producers trying to source new turbines face wait times of five to seven years.

Second, much of the workforce that built the surge of gas infrastructure in the 2000s and 2010s has either retired or moved on to other industries, creating a deep workforce shortage. If utilities want to build a new gas plant, it’ll be years before they can get the equipment, and even then, it’s hard to find workers to build it—but we need the power now, not in 2030. That means new gas-fired power plants will be dramatically more expensive this time around.

NextEra CEO John Ketchum says building a new gas-fired power plant today would cost three times as much as the last facility the utility built, back in 2022.

And that’s only half of the equation—once the facility is built, you need fuel to run it. Turns out, that’s drastically more expensive now too.

The U.S. Energy Information Administration (EIA) forecasts natural gas prices will rise 14% in 2026, following a 59% year-over-year increase from 2024 to 2025. EIA attributes rising prices to increased demand stemming from rising liquified natural gas (LNG) exports and flat production capabilities.

“Gas is only going to get more expensive going forward,” said Tyson Slocum, director of Public Citizen’s energy program. “You can build more pipelines in Virginia or anywhere else, but that extra natural gas is still going to be competing with folks in Berlin and Beijing for access to the U.S. gas.”

“LNG is tying us more to global markets that pay more than we do for gas,” said Joshua Rhodes, a research scientist at the University of Texas, Austin. “That has to put more upward pressure on gas.”

Like any other commodity that’s sold across the world, gas companies seek the highest-priced markets. These companies say American natural gas increases our domestic energy security, but they don’t care about home heating bills, they just want to make the highest possible profit – even if that means selling our gas to countries like China.

And yet, Energy Secretary Chris Wright wants to double LNG exports within five years, and then double them again. LNG exports already increased 25% between 2024 and 2025.

Expensive natural gas prices hit households with a double whammy

Because natural gas is the largest source of U.S. electricity generation, when the fuel gets more expensive, it forces consumers to pay higher electricity bills. In fact, every region of the country has seen electricity prices increase over the last three years.

Wholesale electricity prices spiked 23% in 2025, and EIA predicts they’ll climb another 8.6% in 2026. “Natural gas prices tend to be the biggest determinant of power prices,” according to EIA.

But it’s not just electricity bills that are causing sticker shock—the majority of homes in the U.S. use natural gas to heat them, so as gas prices rise, so too will home heating bills. Indeed, EIA is forecasting that home heating costs will rise next year. Federal Reserve data shows retail gas utility service has risen 11% over the past year, near an all-time high. That means more expensive home heating bills for families this winter, potentially fueling the 8% increase in home heating costs expected this year.

Americans are already struggling to pay their utility bills—1 in 20 households has a utility debt high enough to be sent to a collection agency, and average monthly energy bills have increased 35% since 2022, according to a recent report.

Fortunately, rapidly growing wind, solar, and storage can help keep costs in check and can be deployed quickly to meet growing electricity demand. Wind and solar are the cheapest sources of new electricity, and they’ve gotten exponentially cheaper over the past decade– 91% of new renewable power projects commissioned last year were more affordable than new fossil fuels, according to the International Renewable Energy Agency.

And renewables and battery storage are essentially the only new sources of electricity being added to the U.S. grid right now, comprising over 90% of new capacity in 2025 and 2024. The truth is that states with the highest levels of wind and solar generation like Iowa, Oklahoma, and New Mexico have had the lowest utility bill rate increases in America, Energy Innovation research finds.

If policymakers rely on natural gas as a solution for the energy affordability crisis, they will fail to protect American families and businesses from higher energy prices.