Natural gas use is increasing because it sits at a unique crossroads: cheaper than it was a decade ago, cleaner-burning than coal, flexible enough to back up renewable energy, and now accessible in quantities that were unimaginable before the shale revolution. Global gas demand hit an all-time high in 2024, rising 2.7% in a single year. That growth rate exceeded the average from the entire 2010s, signaling that natural gas isn’t just holding steady but accelerating.
The Shale Revolution Changed the Supply Picture
The single biggest reason natural gas is more widely used today is that there’s dramatically more of it available at lower cost. Starting around 2005 to 2007 in the United States, producers began combining two techniques: horizontal drilling and hydraulic fracturing. Horizontal drilling lets a single well reach sideways through rock for thousands of feet, while fracturing injects high-pressure fluid to crack open tight shale formations and release trapped gas. Together, these methods unlocked enormous reserves that were previously too expensive or technically impossible to tap.
The results were staggering. Unit capital costs for shale gas production fell 25% to 30% after 2012 alone, and the price of natural gas dropped with them. At the U.S. benchmark (Henry Hub), spot prices averaged around $2.00 to $2.50 per million BTU through much of 2023 and 2024, compared to spikes above $8.00 during the 2022 energy crisis. Even with prices climbing back toward $3.00 to $4.00 in 2025, natural gas remains one of the cheapest fuels per unit of energy in most markets. When supply is abundant and prices are low, industries, utilities, and governments naturally shift toward that fuel.
It Produces Far Less CO₂ Than Coal
Burning natural gas releases about 117 pounds of CO₂ per million BTU of energy. Coal releases about 212 pounds for the same amount of energy. That means natural gas produces roughly 45% less carbon dioxide than coal for every unit of electricity or heat it generates. It also beats diesel (163 pounds) and gasoline (156 pounds) on the same measure.
This gap matters enormously for countries trying to cut emissions quickly. Replacing a coal plant with a natural gas plant delivers an immediate, large reduction in CO₂ without requiring entirely new grid infrastructure. Many nations, particularly in Asia, have leaned on this “coal-to-gas switching” strategy as a faster path to lower emissions than building out solar and wind farms from scratch. Natural gas isn’t zero-emission, but it’s a significant step down from coal, and that practical reality has driven policy decisions worldwide.
There is a caveat worth understanding. Methane, the main component of natural gas, is 28 times more potent than CO₂ as a greenhouse gas over a 100-year period. Leaks anywhere along the supply chain, from wellheads to pipelines to processing plants, can erode the climate advantage. How much methane actually escapes is a subject of active measurement and debate, and it’s one reason some environmental groups are skeptical of framing natural gas as a “bridge fuel.”
Electricity Generation Is the Biggest Driver
Power plants are where most of the growth in natural gas demand is concentrated. In the United States, natural gas fueled about 43% of all utility-scale electricity generation in 2023, making it the single largest source of power by a wide margin. The electric power sector alone consumed roughly 40% of all the natural gas used in the country that year.
This dominance grew over the past 15 years as cheap shale gas made it uneconomical to keep running older coal plants. Utilities retired coal capacity and replaced it with gas-fired generation, often using the same transmission lines and grid connections. The trend is self-reinforcing: as more gas plants come online, demand for natural gas rises, which supports continued investment in production and pipelines, which keeps prices competitive.
Natural Gas Fills the Gaps for Wind and Solar
One of the less obvious reasons gas demand keeps growing is its role as a partner to renewable energy. Wind and solar are intermittent: they produce power only when the wind blows or the sun shines. When output drops unexpectedly or demand surges beyond what renewables can cover, the grid needs something that can ramp up fast.
That’s where natural gas “peaker” plants come in. These facilities can start generating electricity within minutes, covering the gap until conditions stabilize. The United States relies on roughly 1,000 peaker plants, most of them gas-fired, even though they typically run only 2% to 7% of the hours in a year. They exist for those critical moments when supply and demand don’t match.
As countries install more solar and wind capacity, they paradoxically need more fast-response backup. Battery storage is increasingly competitive for this role, with faster response times than gas peakers, but the sheer scale of backup needed means gas plants continue to be built alongside renewable projects. The more renewables grow, the more the grid currently leans on natural gas to stay stable.
Industrial and Chemical Demand Keeps Rising
Beyond electricity, natural gas is a raw material for products most people don’t associate with fossil fuels. The bulk chemicals industry is the largest industrial consumer of natural gas in the U.S., using about 3 trillion cubic feet in 2017 alone. Most of that goes toward heat and power for manufacturing processes, but roughly 25% is used as a chemical feedstock, primarily for fertilizer and methanol production.
Fertilizer is especially important. The process of making ammonia, the base ingredient in most synthetic fertilizers, requires hydrogen stripped from natural gas molecules. Global agriculture depends on this supply chain. As the world’s population grows and food demand rises, so does the need for fertilizer, and by extension, natural gas. This industrial demand floor means that even if electricity generation shifts away from gas over time, a substantial baseline of consumption will persist.
LNG Is Connecting New Markets
Liquefied natural gas, or LNG, has transformed natural gas from a regional commodity into a global one. By cooling gas to minus 260°F, producers can shrink its volume by a factor of 600 and ship it by tanker to any country with a receiving terminal. This has opened up markets in Asia, Europe, and South America that don’t have their own domestic gas reserves.
The expansion underway is massive. Between 2025 and 2030, about 325 billion cubic meters per year of new LNG export capacity is set to come online, the largest wave of additions in history. The United States has been the dominant force, accounting for more than half of all final investment decisions on new LNG projects since 2019. In 2025 alone, U.S. companies sanctioned over 83 billion cubic meters per year of new capacity, a single-year record. Qatar is a distant second at under 20% of global investment decisions, with the rest spread across a dozen countries.
This infrastructure buildout locks in decades of future gas demand. Once a $10 billion liquefaction terminal is built, the economics require it to operate for 20 to 30 years to pay for itself. Countries that sign long-term LNG import contracts are committing to natural gas consumption well into the 2040s and 2050s.
Homes Still Run on Gas
Residential use adds another layer of persistent demand. In the United States, 47% of households reported natural gas as their main heating fuel in 2024. That’s down slightly from 49% in 2010 as electric heat pumps gain ground, but it still represents nearly half the country’s homes. Households that heat with gas also tend to use it for water heating, cooking, and clothes drying, creating a bundle of gas appliances that’s expensive and inconvenient to replace all at once.
Electrification of homes is happening, with electricity overtaking gas in some regions, but the installed base of gas furnaces, water heaters, and stoves is enormous. The average furnace lasts 15 to 20 years, so even if every new installation were electric starting tomorrow, natural gas demand from existing homes would persist for a generation.
Price Volatility Hasn’t Killed the Trend
Natural gas prices can swing wildly. Henry Hub prices jumped from around $2.70 in early 2021 to nearly $9.00 by mid-2022 during the global energy crisis triggered by Russia’s invasion of Ukraine. But they crashed back below $2.00 by early 2024. Through all of that turbulence, consumption kept climbing. The 2024 demand growth of 2.7% came during a period of relatively low prices, suggesting that when gas is cheap, industries and utilities simply use more of it.
The long-term price trend also favors continued growth. Abundant shale reserves in the U.S. and expanding LNG trade create competitive pressure that tends to pull prices back down after spikes. Compared to the structural cost increases facing coal (tighter environmental regulations, declining investment) and the intermittency challenges facing renewables (storage costs, grid upgrades), natural gas occupies a pricing sweet spot that keeps attracting new users.