Matthew Smith — How America Runs Out of Natural Gas by 2030 - [Invest Like the Best, EP.483]
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Our guest today is Matthew Smith. He's been on the show before many years ago, and I always love talking to him about energy markets where he's worked for twenty years. He's the founder and CIO of Cronometer Partners, which invests in energy, industrials, materials, power and utilities, and related infrastructure. He and his team have modeled nearly every natural gas well, pipeline, and processing asset in The United States. He's reached a conclusion that most of the market does not share. Starting in 2028, AI data centers and LNG exports will need more gas than the country can produce and del
We are headed into a place where we see an historic deficit in natural gas supply available in The United States, which does portend some pretty serious consequences. Natural gas, which is over 40% of US power generation, is imminently going to become the most important fuel in the country. Overtaking petroleum given the amount that we use now for generation. Our work suggests that twenty six, twenty seven natural gas is appropriately supplied but as we get into '28 and you plug in this compute and you assign gas to very specific assets as they're plugged in as well and you continue to export
How much of this is just attributable to data centers? Like just purely we're building a lot more data centers, that's just for AI. Is it that simple or is there something else going on as well?
The die was cast long before AI compute came to the scene. If I may set the stage a little bit, US gas was plentiful starting in about 2010 when shale started to really change, come to the scene and change things. We had been importing natural gas to satisfy consumption on top of what we produce domestically. Shell started to be very productive, surprised the upside, and became this this abundant force. And as natural gas became more abundant, we started to export it, starting with Cheniere. We've gone from that early Cheniere exporting to today, we're exporting about 15 Bcf a day of nameplate
All that stuff.
All of this stuff. And so what we've gone about doing is we will start with our base case which is we'll call it P50. Everything with a probability of 50% or more. 50% being they have some approvals. They have usually a PPA. Someone planning to buy power from them under contract. You know, they usually have some sort of interconnection agreement or they're in process with the interconnection agreement. Those are the assets we've taken seriously in our base case. And so we'll call that the P50 level. And when you do that, it's about five Bcf a day, we think, of very credi
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