Natural gas continues to play a pivotal role in the U.S. energy landscape, powering about 43% of the nation’s electricity generation as of 2023.
With surging demand from data centers, artificial intelligence (AI) infrastructure, and industrial growth, natural gas consumption for electricity hit record highs in 2024, averaging 36.9 Bcf/d in the electric power sector.
However, expanding its footprint on the grid faces hurdles like supply chain bottlenecks, infrastructure limits, and turbine manufacturing delays. This article examines current usage patterns, planned expansions, key investment opportunities across sectors, and the status of turbine production.
U.S. Natural Gas Usage for Electricity Generation by State
Natural gas is the primary fuel for electricity in many states, accounting for over 40% of total U.S. power production.
Consumption of electric power varies widely by state, driven by factors like population, industrial activity, and regional resources. Texas leads by a wide margin, consuming nearly twice as much as the next state due to its massive grid and energy-intensive industries. Below is a breakdown of the top states based on 2023-2024 data from the U.S. Energy Information Administration (EIA), measured in million cubic feet (MMcf) for natural gas delivered to electric power consumers.
|
State
|
Annual Consumption (MMcf, 2023)
|
Share of U.S. Total (%)
|
Key Drivers
|
|---|---|---|---|
|
Texas
|
1,800,000+ (est. from trends)
|
~15-20%
|
Oil/gas industry, data centers, population growth. statista.com
|
|
Florida
|
~1,200,000
|
~9-10%
|
High residential demand, no state income tax attracting growth. chooseenergy.com
|
|
California
|
~700,000
|
~5-6%
|
Urban centers, but offset by renewables push. eia.gov
|
|
Pennsylvania
|
~600,000
|
~4-5%
|
Shale gas proximity, industrial revival. eia.gov
|
|
Louisiana
|
~500,000
|
~4%
|
Petrochemical hubs, exports. eia.gov
|
|
Ohio
|
~400,000
|
~3%
|
Manufacturing, data center expansion. chooseenergy.com
|
|
New York
|
~300,000
|
~2-3%
|
Urban heating/power needs. eia.gov
|
|
Illinois
|
~250,000
|
~2%
|
Midwest industrial base. eia.gov
|
|
Georgia
|
~200,000
|
~1-2%
|
Growing tech/data sectors. eia.gov
|
|
Alabama
|
~150,000
|
~1%
|
Southern manufacturing. eia.gov
|
Nationwide, U.S. natural gas consumption for electricity reached 13.5 trillion cubic feet in 2024, up 4% from 2023, with projections for further growth to 91.4 Bcf/d in 2025.
States like Texas and Florida are seeing the sharpest increases, tied to data center booms and electrification trends.
Planned New Natural Gas Power Plants
Developers are racing to meet demand, with over 252 GW of gas-fired capacity in various development stages as of early 2026—nearly tripling from 2025 levels.
If built, this could expand the U.S. gas fleet by 50%, at a cost exceeding $416 billion.
For 2026 alone, plans include 6.3 GW of new capacity, mostly combined-cycle (3.3 GW) and combustion turbines (2.8 GW), concentrated in Texas, Oklahoma, Ohio, Tennessee, and Florida.
Notable projects include:
Duke Energy’s $3.2 billion, 1,400-MW plant in South Carolina (online by 2031).
Vistra’s $1 billion+ expansion in Texas’s Permian Basin for oil/gas industry power.
NRG Energy’s four new plants, totaling over 20 GW, are targeting AI data centers (first online in 2029).
Texas proposals for 130 new plants/expansions adding 58 GW.
Overall, the Federal Energy Regulatory Commission (FERC) forecasts 44.9 GW of proposed capacity soon, outpacing 12.7 GW of retirements through 2028.
Texas alone accounts for nearly a third of U.S. plans (80.6 GW), with 40 GW for data centers.
However, turbine shortages could delay many, as backlogs extend to 2029-2030.
Investment Opportunities in Key Sectors
Rising demand makes natural gas-related stocks attractive for investors seeking growth and dividends. Below are top picks across sectors, based on market cap, production, and strategic positioning.
Natural Gas Producers
Focus on upstream companies with strong reserves and low-cost operations:
ExxonMobil (XOM): Largest U.S. producer, with 2.7+ GW in data center power pipeline; market cap $379B, dividend yield ~3%.
EQT Corporation (EQT): Top producer (38.8B market cap), low-cost shale focus; yield 1.04%.
Cheniere Energy (LNG): Leading LNG exporter (52.7B market cap), expanding facilities; yield 0.84%.
Expand Energy (formerly Chesapeake): Merged entity, largest U.S. gas producer; strong AI/data center ties.
Antero Resources (AR): Denver-based explorer with U.S./Canada assets.
Hyperscalers
These tech giants are investing heavily in energy infrastructure to power data centers, often via natural gas partnerships:
Amazon (AMZN): AWS leads in data centers; $1T+ market cap, partnering on gas-powered facilities.
Microsoft (MSFT): Azure expansions, including gas/nuclear deals; yield ~0.7%.
Google (GOOG): High capex for AI power; collaborating on 2.5 GW gas projects.
Meta (META): Massive Louisiana data center powered by gas expansions.
Oracle (ORCL): 1.4 GW hyperscale sites, yield ~1%.
Pipeline Companies
Midstream firms transport gas reliably, offering high yields:Kinder Morgan (KMI): Largest U.S. network (74.1B market cap), yield 3.51%.
foolWilliams Companies (WMB): Key transporter (90.7B market cap), yield ~2.5%.
Enbridge (ENB): North American leader (117.7B market cap), yield 5.07%.
Energy Transfer (ET): 64B market cap, yield 7.13%.
Enterprise Products Partners (EPD): 80.2B market cap, yield 5.86%.
Utilities
Downstream distributors with stable cash flows:
Atmos Energy (ATO): Top U.S. gas utility by volume (287M Mcf sales), strong infrastructure.
Southern Company (via Nicor/Southern California Gas): 256M+ Mcf, yield ~4%.
Consumers Energy: 220M Mcf, Midwest focus.
Duke Energy (DUK): Expanding gas plants, yield ~4%.
NRG Energy (NRG): Data center-focused, yield ~2%.
Status of Natural Gas Turbine Manufacturers
Turbine makers are struggling with demand outpacing supply, leading to backlogs of 5-7 years and costs rising 2.5x in some markets.
Global orders surged 66% in 2024 to 68 turbines (20 GW), with U.S. hyperscaler needs driving the boom.
Key players—GE Vernova, Siemens Energy, and Mitsubishi Power—control 75% of the market and face €131B+ backlogs.
They are behind current demand but making headway: GE plans to produce 70-80 heavy-duty turbines annually by late 2026 (up from 48 in 2024); Mitsubishi aims to double capacity; Siemens reports 194 units sold in 2025 (vs. 100 in 2024).
U.S. manufacturing could hit 70-80 GW by 2030, but shortages persist, risking delays for 45 GW+ of planned 2030 capacity.
Upgrades to existing units offer a quicker fix, potentially unlocking 6 GW.
The Bottom Line
Natural gas is “rolling” with record consumption and ambitious plans, but grid additions are capped by turbine constraints and costs. Investors can capitalize on producers, hyperscalers’ energy plays, pipelines, and utilities for diversified exposure. As AI and electrification accelerate, monitor supply chain progress for sustained growth.
Sources: power-eng.com, heatmap.news, spglobal.com, danelfin.com
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