With soaring North American electricity demand growth, natural gas remained a key part of the energy mix, ensuring stable, reliable, and dispatchable power, which has led to both the gas and power markets becoming increasingly interconnected, according to analysts at Wood Mackenzie.
According to the report, the aggressive expansion of AI data center projects is driving this demand, with 900 gigawatts of planned projects, of which 220 GW are highly likely to proceed.
While tech giants and hyperscalers increasing rely on renewables to power these projects, the report noted that this was largely through "offsets and renewable energy credits," while natural gas still remained the predominant generating source.
The report also noted that gas was the preferred choice for behind-the-meter generation, helping data center projects bypass grid connection constraints.
Analysts also pointed to North America's expanding liquefied natural gas export industry as an increasingly important transmission channel between global energy markets and domestic gas prices.
Wood Mackenzie estimates that about 13 million to 14 million metric tons of global LNG supply remains unavailable because of disruptions stemming from the Middle East conflict, with damage to some production facilities potentially taking as long as five years to repair.
This is compelling international buyers to secure more US LNG cargoes, leading to higher domestic gas prices, which in-turn is pushing up electricity prices as well, highlighting the growing connect between the gas and power markets in 2026.