DAVID BLACKMON: Are Boom Times Ahead For U.S. Natural Gas? Not So Fast, Says One CEO

Natural gas prices in the United States have been chronically low since 2009, hovering mostly at the lower end of a range bound at $2/MMbtu at the bottom and a high of $5/MMbtu. The only truly notable exception to this 16-year paradigm came in the post-COVID period during the Biden years, when supply chain complications and high inflation caused shortages and created a spike in prices lasting from mid-2022 through mid-2023.

But now, the CEO at one large gas-focused independent driller is warning his peers they should be developing plans to deal with a high degree of volatility in the coming years amid rapidly rising demand for natural gas coming mainly from the rapid expansion of liquefied natural gas (LNG) exports and the explosion of huge, power-hungry AI datacenters.

In an interview with Semafor, Nick Dell’Osso, CEO at Oklahoma-based Expand Energy (formerly Chesapeake Energy) warns that the nascent buildout of major new pipelines and LNG export capacity now underway thanks to the Trump administration’s about-face on permitting is not necessarily a positive for natural gas producers. Dell’Osso says this new market dynamic will likely result in new supplies of the product arriving in “large, chunky volumes,” which could result in frequent price crashes. “If you’re better at responding to volatility, then you position your company for better returns,” Dell’Osso added, advising other independents to build plans that would enable them to quickly reduce production when such gas gluts occur.

Dell’Osso’s remarks are notable since they cut against the grain of prevailing thought that the rapidly rising electricity needs of datacenters and expanding global markets for U.S. LNG exports would create boom times for one of America’s most abundant and affordable energy resources.