Gas Is Cheap and Plentiful, but Turbines and Grid Rules Slow AI Power

Fuel is cheap, power is not

The Henry Hub spot price was $2.76 per MMBtu on October 27, according to U.S. Energy Information Administration (EIA) data cited in the commentary. Working gas in storage stood 35 Bcf above the five-year average in the week ended October 16.

Supply keeps rising. The EIA said U.S. natural gas gross withdrawals reached a record 137 billion cubic feet per day in July 2026, driven primarily by higher output in the Permian Basin. In its October Short-Term Energy Outlook, the agency forecast dry gas production of 112.20 Bcf/d this year and 116.13 Bcf/d in 2027. It expects the Henry Hub price to average $3.16 per MMBtu in 2027, down 32 cents from 2026.

Electricity is a different picture. The EIA expects wholesale prices in 2026 to average $52 per megawatthour across the 11 hubs it tracks, 11% higher than in 2025. For the PJM region it forecasts a 41% rise this year, the largest increase across all regions.

Rules and pipelines under review

On October 26, the Board of Trustees of the North American Electric Reliability Corporation (NERC) adopted foundational computational load Reliability Standards. NERC said this is the first phase of its broader large loads action plan, aimed at reliability risks from rapidly growing computational loads. NERC will file the standards with the Federal Energy Regulatory Commission (FERC) for approval.

FERC, for its part, unveiled a draft policy statement on October 15 that proposes to stop requesting air dispersion modeling from applicants for Natural Gas Act projects. It is part of a proposal to overhaul and speed up the review of air quality effects for gas projects. Comments are due by November 16, 2026.

On equipment, Global Market Insights estimates the global gas turbine market at $22.6 billion in 2025 and expects it to grow from $25.4 billion in 2026 to $64.8 billion by 2035, a CAGR of 11.2%.

What companies along the chain reported

EQT reported third-quarter sales volume of 583 Bcfe, including 21 Bcfe of strategic curtailments. It launched an open season for its 42-inch POWER Pipeline project, linking Marcellus assets in Pennsylvania to demand at the Clarington hub in Ohio. It also highlighted its announced acquisition of Range Resources Corporation.

Kinder Morgan posted net income attributable to KMI of $764 million, up from $628 million a year earlier, and a natural gas expansion backlog of $13.2 billion within a $14.4 billion total. The company said more than 75% of the backlog is tied to power generation and local distribution company demand. Its Natural Gas Pipeline Company of America reached a final investment decision on the roughly $4.2 billion Permian Link Project, designed to provide about 2.8 Bcf/d of capacity for new power generation serving an A-rated hyperscaler.

Baker Hughes announced an order from a major U.S. technology company for 34 Frame 5 gas turbines and nine NovaLT16 turbines, with generators and gears, providing approximately 1.1 GW for high-performance computing infrastructure. It also reported a separate order of 18 Frame 5 generator packages, about 500 megawatts, for data center projects for a U.S. energy company. Third-quarter orders were $10.8 billion.

Bloom Energy reported record third-quarter revenue of $1,235.8 million, up 138.1% year over year, and raised its 2026 revenue guidance to $4.4 billion to $4.6 billion. According to its quarterly report, its Energy Server is a solid-oxide fuel cell system that converts fuels including natural gas into electricity without combustion.

What it means

The commentary frames the AI power challenge as one of delivery rather than supply. Gas is abundant and priced low, while wholesale electricity costs are rising and new standards and permitting changes are still moving through review. The company results it cites show money going into pipelines, turbines and onsite power for data centers. The piece is independent commentary and states it is not investment advice.