Matthew Smith — Natural Gas: The Next Bottleneck
July 21, 2026
AI Summary
5 min readFor 15 years, the United States has been awash in natural gas. Shale production turned the country from an importer into the world’s leading exporter, and the fuel has become the backbone of American power generation, supplying over 40% of the grid. That abundance has bred a deep complacency. But after 18 months of modeling nearly every gas well, pipeline, and processing asset in the country, Matthew Smith, founder and CIO of Chronometer Partners, has reached a stark conclusion: starting in 2028, the U.S. will face a structural deficit of natural gas so severe that it could exhaust its working storage by 2030. In his words, the upside risk to prices becomes “unbounded and convex.” The crisis was set in motion long before AI arrived, but the explosion of data center demand is now accelerating it toward a potential breaking point.
The Die Was Cast Before AI
The problem did not begin with ChatGPT. It began with liquefied natural gas (LNG) exports. A decade ago, the U.S. exported virtually no natural gas. Today, it exports about 15 billion cubic feet (BCF) per day, roughly 12-15% of total daily production. By 2030, known and permitted LNG projects will push that figure to 35 BCF per day. These projects are financed years in advance, with binding contracts and billions in sunk capital. They cannot be turned off easily.
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What you'll learn
- 1 (03:01) **The Core Thesis: An Impending Natural Gas Deficit** - Matthew Smith presents the conclusion of his 18-month analysis: the US is heading toward a historic natural gas supply deficit.
- 2 (05:04) **Why the "Die Was Cast" Before AI** - Smith explains that the current crisis was set in motion years ago by the rapid growth of LNG export capacity.
- 3 (08:02) **Modeling AI's Incremental Gas Demand** - Smith describes how he and his team assigned probabilities to various AI power generation projects to estimate their gas consumption.
- 4 (09:38) **Why "Just Shut Off Exports" Isn't a Solution** - Patrick pushes back with the naive solution of halting LNG exports to solve the problem domestically.
- 5 (12:06) **Is the Problem Running Out of Gas or Just Bottlenecks?** - Patrick seeks to clarify whether the issue is a finite resource or a delivery problem.
- 6 (18:59) **The Rate Limiters: Processing, Gathering, and Pipelines** - Smith details the three major infrastructure constraints that will prevent gas from reaching the market.
- 7 (22:01) **The 2030 Scenario: What Happens If Nothing Changes** - Smith paints a picture of the likely outcome if current inertia continues.
+ Full timestamped outline available in the app
Show Notes
My guest today is Matthew Smith. Matthew is the founder and CIO of Chronometer Partners, which invests in energy, industrials, materials, power and utilities, and related infrastructure.
For the last 18 months he and his team have modeled nearly every natural gas well, pipeline, and processing asset in the United States. He's reached a conclusion most of the market doesn't share.
Starting in 2028, AI data centers and LNG exports will need more gas than the country can produce and deliver. By his math, the US could exhaust its working natural gas storage by 2030. In his words, the upside risk to prices becomes unbounded and convex.
We talk about why this was set in motion long before AI arrived, why the US can't just turn off exports, who wins and loses among producers, nuclear, solar, and the hyperscalers, and what he sees as the only long-term solution.
Please enjoy my conversation with Matthew Smith.
For the full show notes, transcript, and links to mentioned content, check out the episode page here.
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In June, Matthew wrote a letter to a small group of confidants laying out the full case behind his natural gas forecast. He has allowed us to publish it. You can read the full letter here.
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