The Paradox of Record Gas Demand
Record Gas Demand Meets Rising Battery Storage Capacity
A handful of recent charts from the EIA help illustrate a few points worth repeating. Specifically, while AI power demand growth is driving overall power demand and intense interest gas fired generation assets, that does not necessarily translate into rising gas consumption from the power sector.
Power demand is (has) inflected. How fast and how far might be up for debate (read more on Enverus’ forecast), but the direction of travel is up and to the right.
The same dataset from the EIA also forecasts that “natural gas consumption in the United States will increase 1% to set a record of 91.4 billion cubic feet per day (Bcf/d) in 2025”.
That’s not the interesting part. Record consumption is set to be achieved with a slight decrease in power burn. That may seem paradoxical given the market’s intense interest in gas fired generation assets (new and existing).
Clues as to what is happening shows up in the capacity addition data. Development of battery storage capacity continues to accelerate, with over 12 GW of new battery storage capacity is anticipated to come online in the second half of 2025 alone.
These batteries tend to operated in the peak hours where natural gas would have traditionally provided balancing, thereby contributing to flat-to-declining gas burn in the power sector this year.
The majority of this new battery capacity is concentrated in Texas, California, and Arizona—states with significant solar penetration. This concentration highlights how battery adoption is being closely tied to managing solar variability, further reducing the reliance on gas for intraday balancing.
But batteries don’t eliminate the need for gas. Gas remains critical for short-duration reliability and indispensable for longer-duration flexibility and baseload in many regions.
How much battery growth—and other emerging technologies—can challenge gas will determine whether the gas burn curve bends upward, flattens, or eventually turns down.