Rising Gas Prices Threaten Data Centers, Coal Emerges as Key Energy Source

Analysts from Wood Mackenzie and Bloomberg New Energy Finance (BNEF) have released studies suggesting that the era of cheap natural gas is coming to an end. The decade-long low prices were driven by rapid production growth, associated gas, and productivity gains, but these factors are no longer sufficient to sustain supply.

As a result, natural gas prices are expected to rise from around $2 per million British Thermal Units (BTU) in the past decade to near $5 per BTU in the next decade. This increase will have significant implications for AI data centers, which rely heavily on electricity generated by natural gas.

Bloomberg forecasts that demand for electricity from AI data centers will surge by 52% by 2030 and by 83% by 2035, exceeding peak demand of America's largest energy market, PJM Interconnection. To mitigate the effects of rising prices, utility companies can rely on coal, which has been shown to keep energy prices low despite rising natural gas prices.

The Interior Department estimates that there is enough coal in federally managed public lands to last at least 600 years, making it a vital source of affordable energy. The ability to use coal instead of natural gas saved American consumers between $30 and $40 billion in 2025, and companies must be able to invest in maintaining and improving the coal fleet.