The United States is on track to witness record levels of industrial natural gas consumption in both 2026 and 2027, according to the latest projections from the U.S. Energy Information Administration (EIA). In its Short-Term Energy Outlook (STEO) released in May, the EIA forecasts a continued upward trend in the use of natural gas by industrial sectors, driven by a modest increase in manufacturing activity. This anticipated surge marks a significant point for the sector, which has seen relatively stable consumption patterns in recent years, with notable fluctuations only during the pandemic period.
Industrial natural gas consumption is projected to reach new peaks, building on the record set in 2023. The EIA estimates that average annual industrial natural gas consumption hit a record 23.6 billion cubic feet per day (Bcf/d) in 2025. This figure represents a 1% increase from the previous record of 23.4 Bcf/d observed in 2023. The forecast indicates a gradual but steady rise in consumption for 2026 and 2027. This growth is closely tied to an expected slight increase in the natural gas-weighted manufacturing index over the same period. Specifically, the EIA anticipates average annual industrial natural gas consumption to grow by 1.2%, equivalent to 0.3 Bcf/d, in 2026. This growth is expected to accelerate slightly in 2027, with a projected increase of 1.7%, or 0.4 Bcf/d.
Despite these projected gains, the overall growth in consumption is expected to remain moderate. This is attributed to a balancing act between increasing industrial activity and ongoing improvements in energy efficiency. Many industrial facilities have been adopting more advanced technologies, such as more efficient process heaters and heat-recovery systems. These innovations reduce the amount of natural gas required to produce a unit of output, thereby tempering the impact of increased production on overall fuel demand. However, the EIA's forecast suggests that the rise in industrial output will ultimately outweigh these efficiency gains, leading to higher overall natural gas consumption.
The chemicals subsector stands out as the primary driver of industrial natural gas demand. This sector utilizes natural gas extensively for various purposes, including generating heat and electricity, and critically, as a feedstock for the production of essential chemicals like methanol, fertilizers, and hydrogen. Other manufacturing industries also contribute significantly to the overall industrial demand for natural gas. The robust demand from these sectors underscores the integral role natural gas plays in the U.S. industrial landscape, supporting key production processes and contributing to the broader economy.
Industrial natural gas demand exhibits a distinct seasonal pattern, typically peaking during the winter months. Colder temperatures increase the demand for heating at industrial facilities, leading to higher consumption. The EIA forecasts that industrial natural gas consumption will average 26.1 Bcf/d in January 2026 and is expected to rise further to an average of 26.7 Bcf/d in January 2027. In contrast, consumption levels tend to be at their lowest during the summer months. For June 2026 and 2027, consumption is projected to average approximately 22.6 Bcf/d, highlighting the significant seasonal variations in industrial natural gas usage.
Historically, industrial natural gas consumption has remained relatively stable since 2018, with the exception of a notable decline during the COVID-19 pandemic in 2020, followed by a recovery in 2021 and 2022. The period prior to 2018 saw expansion in energy-intensive industries, such as petrochemicals, ammonia production, and refining, particularly along the Gulf Coast. This expansion was fueled by relatively low natural gas prices, which led to a higher baseline rate of natural gas consumption in the industrial sector. Although the pace of new capacity additions has slowed in recent years, the established infrastructure and continued demand from key sectors ensure that natural gas remains a critical energy source for U.S. industry.
Looking ahead, the EIA projects the natural gas-weighted manufacturing index to increase by 1.5% in 2026 and by 0.7% in 2027. These increases in industrial activity are expected to be the primary contributors to the projected rise in industrial natural gas consumption over the next two years, pushing the sector towards new record highs.
