For 75 years, petroleum has been the predominant U.S. energy source. That's about to change. By 2030, natural gas is expected to surpass oil - not because oil use is falling fast, but because gas keeps winning in power generation while oil demand nearly flatlines.
Coal's share of U.S. electricity generation has fallen from roughly 50% in 2000 to under 20% today, as natural gas and renewables have taken over. This trend is expected to continue despite political support for coal.
This transition represents a fundamental shift in the nation's energy mix, as oil has dominated since the 1950s, fueling transportation and industry. Natural gas, once considered a waste product, now powers homes, factories, and power plants across the country.
Starting in the early 2000s, the shale revolution reshaped American energy by unlocking vast natural gas reserves that became profitable to extract. This abundance drove down prices and made natural gas the preferred fuel for new power plants, displacing coal and competing with oil. Ira Joseph, a researcher at Columbia University's global energy policy center, said, "Gas "is dominant in power because it's so inexpensive". "There's just plentiful amounts of natural gas in this country"."
Meanwhile, U.S. gasoline demand has flattened as electric vehicles cut into oil's traditional base. Growing electricity needs from data centers and EVs are boosting demand for gas-fired power. The Energy Information Administration projects U.S. natural gas demand will rise 3.4% from 2025 to 2027, while petroleum demand edges up just 0.6%.
Get your free investing masterclass bonus when you join Market Briefs, our free daily newsletter
That shift is visible in the electricity market. Between 2015 and 2025, the use of wind and solar energy increased more than threefold, whereas natural gas consumption grew by 23%, despite natural gas seeing larger absolute gains.
Toby Rice, CEO of EQT Corp., expects the crossover soon. "I say we probably cross that threshold within the next couple years, and by 2030, we will have a big lead on petroleum," Rice said.
The government's own forecasts support that view. Coal is still declining despite hundreds of millions of taxpayer dollars allocated by President Donald Trump to support the industry. One source simply outcompetes the other on cost.
Natural gas isn't just winning at home. 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.
As Ira Joseph noted, the economics are straightforward: cheap domestic supply meets rising global demand.
Wind and solar are growing faster in percentage terms, but natural gas remains the largest power-plant fuel by a wide margin. Mark Brownstein, the Environmental Defense Fund's senior vice president of energy transition, summed it up: "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."
For investors, the trend is clear. Toby Rice put it in historical context: "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. "And the age of electrification is going to be driven a lot by natural gas"."
Subscribe to Market Briefs, our free daily newsletter, and claim your bonus investing masterclass
