And the price of US natural gas fell back to where it had been 30 years ago.

By Wolf Richter for WOLF STREET.

Marketed production of natural gas jumped by 4.5% in 2025, to a record 43.2 trillion cubic feet. Since 2006, production has soared by 123%; since 2016 by 52%, according to EIA data.

The fracking boom in the US generates enormous amounts of hydrocarbons across the spectrum, and a substantial part of natural gas – along with other hydrocarbon gases and liquids – is produced as a byproduct of fracked oil wells. Drill Baby Drill since the mid-2000s.

The US is also the largest producer of crude oil and petroleum products in the world, and a large exporter of them. This massive amount of reliable energy produced in the US has had a huge impact on the global energy landscape, on the US economy, and on how the US can conduct its foreign policy.

Drill Baby Drill milestones:

• In 2011, the US became the largest natural gas producer in the world.
• The price of US natural gas began collapsing in 2008 amid this new overproduction with no outlet at the time via liquefied natural gas (LNG) exports in the lower 48 states and only limited pipeline exports to Mexico and Canada (see last chart, price of natural gas).
• In 2016, natural gas passed coal as the dominant fuel for power generation in the US (my analysis: Power Generation by Source in 2025).
• In 2025, power generation from natural gas accounted for 40% of total power generation in the US, while coal accounted for 16%.
• The first LNG export terminal in the lower 48 states came on line in 2016, and large-scale LNG exports began. As more export terminals came online, LNG exports soared.
• In 2017, the US became a net exporter of natural gas, exporting more than importing.
• In 2023, the US became the largest exporter of LNG in the world and has since then further outdistanced Qatar and Australia.

US natural gas exports spiked to record.

The US began exporting LNG in 2016 when the first LNG export terminal became operational. As more export terminals were built, LNG exports soared and turned the US into the largest LNG exporter in the world by 2023, surpassing Australia and Qatar. And the lead has widened.

The US also exports natural gas via pipelines to Mexico and Canada.

Total exports of natural gas via pipeline and LNG in 2025 spiked by 16.4% year-over-year to a record 9.0 trillion cubic feet, or about 21% of US marketed production.

LNG exports spiked by 26.1% to a record 5.5 trillion cubic feet.

Pipeline exports to Mexico rose by 3.4% to a record 2.42 trillion cubic feet; to Canada, exports rose by 4.6% to record 1.04 trillion cubic feet.

Imports remained roughly stable at 3.16 trillion cubic feet, essentially all of it via pipeline from Canada, and only minuscule amounts via LNG in the Boston area, which is still inadequately connected via pipeline to the producing areas in the US.

This chart shows imports (blue) as a negative figure and total exports as a positive figure (red). The import peak was in 2007.

“Net exports” of natural gas spike to new high.

The US became a net exporter of natural gas in 2017, exporting more than importing. In 2025, net exports soared by 27.5% to a record 5.82 trillion cubic feet (red in the chart below).

Imports from and exports to Canada are a function of where producing areas, pipelines, and population centers in both countries are. The trade goes in both directions: The US exported 1.04 trillion cubic feet to Canada and imported 3.14 trillion cubic feet from Canada. On net, the US imported 2.1 trillion cubic feet more from Canada than it exported to Canada; net exports to Canada were therefore a negative 2.1 trillion cubic feet (blue line); this figure is included in global next exports.

LNG exports by region. 

In 2025, US exports to Europe (includes the UK) spiked by 62% to a record 3.4 trillion cubic feet, accounting for almost two-thirds of total LNG exports. Europe became the largest buyer of US LNG in 2022 (dotted red line in the chart below). The importing countries are those that have LNG import terminals that feed into the European system of pipelines, in that order in 2025: the Netherlands, France, Spain, the UK, Spain, Germany, and Italy.

LNG exports to Asia fell by 38% to 899 billion cubic feet in 2025 (green line). The biggest importers were South Korea, Japan, India, and Taiwan. LNG exports to China collapsed to near-nothing.

Exports to the Middle East and Africa spiked by 105% in 2025 to a record 857 million cubic feet, nearly equating Asia, on a massive increase by Egypt, which accounted for over half of the 2025 volume (dotted blue line).

Exports to Latin America fell by 18% to 330 million cubic feet (yellow).

Production boom crushed the price of natural gas.

Currently, natural gas futures trade at $2.89 per million Btu. The brief spike in January to $7.50 due to weather conditions has been wrung out. The price of natural gas was already in this range 30 years ago, despite 30 years of inflation in other products and services.

The reason natural gas can be priced this low is that it’s a byproduct of oil production, and even wells that are primarily natural gas produce significant amounts of other hydrocarbons, including crude oil.

In 2008, a few years after US production from fracking took off, the price collapsed as overproduction set in with no LNG export terminals in the lower 48 states as an outlet.

This low price of natural gas in the US makes US LNG very competitive on the global market. It also transformed the US power-generation industry (see my analysis linked below the chart).

And in case you missed it last week: WHOOSH Goes Demand for Electricity. US Power Generation by Source in 2025: Natural Gas, Coal, Nuclear, Wind, Hydro, Solar, Biomass, Geothermal, Petroleum

 

Enjoy reading WOLF STREET and want to support it? You can donate. I appreciate it immensely. Click on the mug to find out how: