America Runs on Natural Gas: Fuel Set to Surpass Oil as US Top Energy Source by 2030

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(Bloomberg) — For 75 years, petroleum has been the energy source that has powered the US more than any other. That’s about to change.

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By the end of the decade, natural gas will likely surpass oil for the first time after the gap all but disappeared in 2025. This seismic shift will end a chapter that began in 1950, when petroleum ended the longstanding reign of another fossil fuel: coal.

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“I say we probably cross that threshold within the next couple years, and by 2030, we will have a big lead on petroleum,” Toby Rice, chief executive of a top US gas producer EQT Corp., said in an interview.

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The transition from America being a nation powered by oil to one running primarily on gas shows how much the economics of cheap gas has reordered parts of the energy sector and pushed out competing fuel sources. 

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In 2025, natural gas comprised 36% of US energy consumption, just shy of the 37% made up by petroleum, according to a recent Energy Information Administration report. The gap between oil and gas has narrowed in the last decade as the shale revolution supercharged natural gas output. Over the same period, the US economy electrified and the largest source of demand for domestic oil — gasoline — flatlined.

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The sea change comes as electric vehicle use and data center development boosts electricity demand from gas-fired power plants, putting additional strain on the US grid. According to EIA data, the grid generates more than 40% of its power by burning natural gas. EVs have also, in part, contributed to waning demand for gasoline that is unlikely to return to highs reached prior to the Covid-19 pandemic, even as Americans drive more each year.

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“The facts don’t lie: The United States is in the midst of an energy transition, away from coal and oil, toward electricity produced by natural gas and renewables,” said Mark Brownstein, senior vice president of energy transition at the Environmental Defense Fund.

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The EIA expects American petroleum demand to rise 0.6% between 2025 and 2027, while gas demand jumps 3.4% over the same period, further shrinking the gap between the leading fuels.

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Rise of Electrification, Renewables

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In decades’ past, much of the electricity in the US would have been generated by coal. But since the advent of fracking and horizontal drilling in the 2000s unlocked huge volumes of previously uneconomic gas reserves, gas has largely displaced coal as the nation’s largest power-plant fuel. From 2011 to 2020, more than 100 coal plants were replaced by or converted to gas generators, according to the EIA. 

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Even as President Donald Trump apportions hundreds of millions of US taxpayer dollars to revitalize the coal industry, its decline will likely continue as cheaper forms of energy such as onshore wind and utility-scale solar coupled with gas make up a growing share of grid power generation.