Driven by a surge in LNG exports, the North American natural gas market will support 29 billion cubic feet per day (bcfd) of production from 2022-2033

If the gas market hits 29 bcfd, it will triple its current market size, according to a new report from Wood Mackenzie.

“The North America gas market expansion for the next decade will be equivalent to adding two new Permian basins,” said Dulles Wang, Director of Americas Gas and LNG Research for Wood Mackenzie. “As Europe diversifies to more secure supply sources and international buyers across the globe seek reliable low-cost supply, North America is poised to deliver.”

According to the report, the North American gas supply will return at a measured pace. Producers continue to focus on capital discipline but will gradually increase investment over the next few years to support market expansion. The resulting onset of new supply will put downward pressure on gas prices until LNG export facilities come online towards the end of the decade, creating an outlet for international demand centers.

Policy support impacts long-term demand

Although growth will slow after 2030, various incentives included in the Inflation Reduction Act of 2022 (IRA) will support the North American natural gas demand in the long term, such as carbon capture and storage as well as hydrogen. Development in these areas will boost gas demand long term.

“As more investments are made in new technology, gas will play a key role in the decarbonization of our energy industry, especially with the incentives provided by the IRA,” said Wang. “It will ensure that natural gas will have a vital role to play for decades to come.”