The 2028 Natural Gas Crisis No One Sees Coming

Summary

Matt Smith presents his bottom-up research showing the US is on track for a structural natural gas shortage starting in 2028, driven by surging LNG exports and AI power demand against constrained production and infrastructure. He outlines the investment implications, naming specific winners like Expand Energy, Range Resources, solar yieldcos, residential solar, and nuclear companies Cameco and BWXT, and losers like Caterpillar and Bloom Energy. The discussion highlights the potential for unbounded gas prices, sharply higher electricity costs, and the urgent need for large-scale nuclear buildout.

• The US natural gas market is headed for a historic deficit by 2028 as LNG export capacity nearly doubles and AI compute adds 5+ BCF/day of demand.
• Domestic gas production growth is capped at about 20 BCF/day due to well depletion, processing, gathering, and interstate pipeline constraints.
• Gas storage is projected to fall below all known historical levels by 2029, creating convex, unbounded upside price risk for natural gas.
• Expand Energy and Range Resources are top upstream winners given high-quality assets and undemanding valuations.
• Utility-scale solar yieldcos like XPLR and Split away energy will capture a windfall from rising power prices set by marginal gas generation.
• Residential solar is economically compelling even without subsidies as a consumer hedge against surging peak electricity prices.
• Large-scale nuclear is the only long-term solution, benefiting Cameco (Westinghouse stake) and BWXT (naval/supply chain).
• Caterpillar and Bloom Energy are poorly positioned as gas turbine and fuel cell manufacturers face demand risk when gas becomes scarce and expensive.