The gap between oil and gas has narrowed in the past decade as the shale revolution supercharged natural gas output. (Mark Felix/Bloomberg)
Key Takeaways:
- Natural gas is poised to surpass petroleum as the top U.S. energy source by 2030 after the gap nearly closed in 2025.
- Gas accounted for 36% of U.S. energy consumption in 2025, behind petroleum’s 37%, amid shale growth, electrification and rising power demand.
- EIA expects petroleum demand to rise 0.6% from 2025 to 2027 while gas demand increases 3.4%, further narrowing the gap.
For 75 years, petroleum has been the energy source that has powered the U.S. more than any other. That’s about to change.
By the end of the decade, natural gas likely will 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.
“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, CEO of top U.S. gas producer EQT Corp., said in an interview.
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.
In 2025, natural gas comprised 36% of U.S. 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 past decade as the shale revolution supercharged natural gas output. Over the same period, the U.S. 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 boost electricity demand from gas-fired power plants, putting additional strain on the U.S. grid. According to EIA data, the grid generates more than 40% of its power by burning natural gas. EVs also have, in part, contributed to waning demand for gasoline that is unlikely to return to highs reached before the COVID-19 pandemic, even as Americans drive more each year.
“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.
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.
Rise of electrification, renewables
In decades past, much of the electricity in the U.S. 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.
Even as President Donald Trump apportions hundreds of millions of U.S. 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.
Gas “is dominant in power because it’s so inexpensive,” said Ira Joseph, a senior research associate at Columbia University’s Center on Global Energy Policy. “There’s just plentiful amounts of natural gas in this country,” he added.
In addition to pushing out coal, the favorable economics of gas-fired power have also accelerated the electrification of the U.S. economy generally, according to Rice.
The rise of wind and solar as significant contributors to U.S. electricity generation has also aided the development of gas-fired power plants, as gas facilities can ramp up and down more rapidly than coal and nuclear generators when intermittent renewable power drops.
Notably, the positioning of gas as a top U.S. energy source doesn’t account for the explosive growth of U.S. liquefied natural gas. The U.S. is already the world’s largest exporter of LNG, and shipments are set to roughly double by the end of the decade. Shell predicts U.S. feedgas for LNG plants will make up 23% of total U.S. gas production by 2035, according to its annual LNG outlook.
To be sure, natural gas isn’t the only energy source that is growing. Renewable energy, primarily wind and solar, has outpaced the growth of gas, Brownstein said.
From 2015 to 2025, wind and solar energy use more than tripled while natural gas use rose 23%, even if the absolute growth of natural gas was greater, according to EIA data.
“We’ve gone from the age of wood and horses to the age of coal to the age of petroleum, and now we are in the age of electrification,” Rice said. “And the age of electrification is going to be driven a lot by natural gas.”
