KEY FINDINGS
1. Drill More, Pay More
Welcome to the “drill more, pay more” era. The United States has entered a new energy paradigm characterized by rising domestic energy prices alongside rising energy production. Despite record high natural gas production levels, US wholesale natural gas prices (Henry Hub) increased 93% in the first quarter of 2025 (Q1) compared to the same period last year. Even with recent price declines sparked by fears of a tariff-driven economic slowdown, US natural gas wholesale prices remain (as of April 15) twice as high as they were on election day. US natural gas prices are expected to remain high in 2025 and increase through 2026, despite steadily rising production levels, according to US Energy Information Administration (US EIA).
2. Record natural gas exports are driving higher prices and volatility
Natural gas exports from the United States surged to record levels in Q1 and are a leading driver of increased domestic energy prices. As export capacity grows, China, Mexico and other markets are competing with US consumers for natural gas produced in the United States. For the first time in history, the total volume of US natural gas exports (LNG and pipeline) is expected in 2025 to exceed the total amount of natural gas consumed by the entire US industrial sector, which includes all US manufacturing, agriculture, energy extraction, and construction.
3. Rising Natural Gas Prices are a triple blow to US consumers
Rising natural gas prices are a triple-cost blow to US consumers, who will pay higher natural gas bills, higher electricity bills, and higher cost of goods from US manufacturers. Rising wholesale prices could potentially double the cost of natural gas for manufacturers in some regions. These increased energy costs for US manufacturers will harm the global competitiveness of US manufacturers, significantly undermining any potential protections from new tariffs.
4. President Trump’s “unleashing American energy” agenda will likely push prices higher, benefitting oil and gas producers but increasing costs to US energy consumers
President Trump’s “unleashing American energy” agenda aims to boost energy exports and domestic oil, gas, and coal consumption and production while pulling back on policies and incentives that favor renewable energy alternatives and energy efficiency, a sharp reversal from President Biden’s energy priorities. US oil and gas producers will dominate the benefits from President Trump’s energy agenda, while US consumers will pay higher energy bills.
