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Now back at the University of Pennsylvania, she talks to Heatmap about community engagement, gaps in the decarbonization market, and goats.

In November of 2020, Jennifer Wilcox had just moved to Philadelphia and was preparing to start a new chapter in her career as a tenured “Presidential Distinguished Professor” at the University of Pennsylvania. Then she got the call: Wilcox was asked to join the incoming Biden administration as the principal deputy assistant secretary for the Office of Fossil Energy, a division of the Department of Energy.
Wilcox had never even heard of the Office of Fossil Energy and was somewhat uneasy about the title. A chemical engineer by training, Wilcox had dedicated her work to climate solutions. She was widely known for having written the first textbook on carbon capture, published in 2012, and for her trailblazing research into removing carbon dioxide from the atmosphere. With Penn’s blessing, she decided to take the job. And in the just over three years she was in office, she may have altered the course of U.S. climate action forever.
First, Wilcox led a total transformation of the department to align it with the Biden administration’s climate goals. She started by arranging 15-minute meetings with each of the nearly 150 employees who worked with her at the D.C. office to understand their perspectives on their work, whether they were happy, and their fears and challenges. She admits she can be intense.
“I took all that information, and I sat on it with many weekends and a blank piece of paper and a pencil and drew crazy diagrams,” she told me, trying to funnel everyone’s feedback into a new vision for the department.
Previously, the Office of Fossil Energy’s primary function was to support research into oil, gas, and coal extraction and use. Wilcox flipped the mission on its head, reorganizing the department into one that would support research, development, and deployment of solutions that reduced dependency on those resources and minimized their environmental impacts. By July, she had codified that mission in a new name — the Office of Fossil Energy and Carbon Management.
Wilcox maxed out her leave this spring. I caught up with her about a week after she left the DOE, as she was picking up where she left off — preparing for her first semester as a professor of chemical engineering and energy policy at Penn. She’s also starting a new side gig as chief scientist at Isometric, a carbon credit certification company that’s trying to improve trust in carbon removal measurement and verification through rigorous standards and transparency.
I asked her to reflect on her time at the Department of Energy, the changes she oversaw, and what she’s looking to do next. Our conversation has been edited for length and clarity.
When was your last day at DOE? Did you leave because you had an obligation to come back to Penn?
My last day was Friday, May 31, so just a week or so ago. Typically, when you’re in an academic tenured position, you can have a maximum of a two-year leave. Within the first year of my appointment at DOE, the Bipartisan Infrastructure Law went through, and then in the second year, the IRA went through — the Inflation Reduction Act. And I was like, this is big stuff. It felt like just a defining moment — in my career, but also in terms of climate legislation. And I thought, how could I possibly leave now? So I went back to Penn and I wrote, I thought, a pretty thoughtful letter of the impact that I could have if I could stay just a year and a half longer. And they said yes.
Could you share the story of how you were asked to go work for the department in the first place?
Sure, it’s pretty funny. Something that many people don’t know is we have a small farm — we had 22 acres in Massachusetts, and goats and a pig and chickens and oh my goodness. Penn was like, “We’ll move your goats, too,” and so we moved everybody. And here I am at the kitchen table amidst boxes, and the goats are outside, and I’m on my laptop, and I get this email from the Biden-Harris transition team. I was like, ain’t nobody got time for that. That’s spam. Delete! And then a couple days go by and I get another one, and I was like, come on. Is this real? And I forwarded it to my husband. He’s an ER doctor, and he’s like, “Honey, that’s real. You have to respond!” And so I sent my CV.
One of the first things you did was rename the department. How did that happen?
When I came in, it was really early days of, okay, net zero by 2050, and there was a question of, what does that mean for our office? Should this office exist in a net zero world? I knew that I was being recruited to think about reshaping, rethinking the portfolio.
We only had two R&D offices at the time. One was called Oil and Gas — we renamed that Office of Resource Sustainability. The other was literally the Office of Coal. What I decided to do was take that program and move it over. That whole office is all about, if you’re choosing to extract energy resources from the Earth, how do you do it in a way that’s minimal impact?
Now, what’s left is how you manage the pollution of how we use fossil fuels — that’s the carbon dioxide. And so we built out a whole new division on carbon removal. We teased out a whole program on hydrogen, and then we also separated out carbon conversion into its own division, and then carbon transport and storage. And so rather than one program focused on carbon, we had five, which is pretty cool. I mean, the amount that I was empowered and supported — and by the way, we got it all through without a single pushback, in nine months. So that was huge.
How would you characterize how the field changed from the time that you entered the office until now? Have research questions changed? Have policy priorities changed?
I think things are starting to change. One of the things from these last few years of having the resources that have started to become mobilized, it’s helping us to recognize where the gaps really are. When you have money to be able to put out for certain topic areas, you get to see who’s going to apply, and who applies gives you an indication of where the technology is at and how much of it’s ready.
For instance, if you look at the $3.5 billion for direct air capture hubs, we had to write the funding opportunity announcement to meet industry where they’re at. There’s only a couple of companies that are really even at a stage where they can start to think about demonstration on the tens of thousands of tons of removal, let alone a million tons per year.
Some of the gaps that we saw were, in direct air capture, making sure that there’s enough companies that are supported to be able to get us to the scale that we need to. And then for the other approaches to carbon removal, making sure that if we want these projects to be durable, in terms of carbon removed on a time scale that impacts climate, we need to figure out how to quantify the net carbon that’s removed.
And then one significant gap that we saw that we are trying to fill with this funding: When we think about corporations and net zero pledges, a lot of times the carbon removal purchasing is associated with Scope 3 emissions that companies don’t have the ability to control. These are supply chains. It could be paper, it could be fuel, food, glass, cement, steel. And so looking at that whole sector, it’s about 10 different industrial sectors that we need to figure out how to decarbonize. If we can think about decarbonizing these supply chains, it’ll take some of the pressure off of the carbon removals to counterbalance those.
The last piece that I feel like gets forgotten is, in the infrastructure law, we had $2.5 billion for building out geologic storage. That’s an issue because you can do the carbon capture, but the big question is, where are you going to put it? And can you get it from point A to point B? We have a whole program called CarbonSAFE that essentially shepherds the industry through the process, starting with characterization all the way to a class six permit from EPA. Building that capacity out means that’s one less thing that industry has to worry about as they’re looking at carbon capture.
During your time there, the department was interfacing with hundreds of researchers and startup founders who were all trying to get new projects or companies off the ground. I’m curious, what are some of the most common misunderstandings you saw from applicants?
There’s a couple of things, but one that stands out — and maybe this is because I have a background in academia — there’s a lot of technologies out there that are actually pretty far along, especially in point source capture [technologies that capture carbon from the smokestacks of industrial facilities before it enters the atmosphere]. Yet, at universities, they’re still trying to develop the next solvent or solid sorbent. It’s like, we can stop doing that.
Where the R&D comes in is actually getting data over a long period of time. How does the material behave? How can we recycle it and reuse it over and over again? How can we design it in a way that reduces NOx, SOx pollution, particulate matter, making the air cleaner? But it’s not about how do we just develop a new technology, because there’s a lot out there.
It seems like one of the hardest things the department was trying to do under your leadership was to strengthen its work on community engagement and community benefits — hard because many advocates for fenceline communities are so skeptical of the solutions you were working on. How did you navigate that tension?
Well, one thing is, I know what I don’t know, and I’m usually pretty willing to say what I’m good at and what I’m not good at. In the early days, I knew that this was going to be a challenge for our office and so I recruited a social scientist: Holly Jean Buck, she’s a professor at the University of Buffalo. We brought Holly in to help us develop some of the language around … it started off with community benefits, but some of our investments don’t always lead to benefits, so let’s be honest, right? And so what we wanted to think about is, what are the societal considerations and impacts of our investments? We ended up recruiting a few others, and now we have a team that’s focused on domestic engagement, and also communications and outreach.
What do you think it could mean for some of what you’ve accomplished and other things you’ve set in motion if Biden is not reelected?
I feel pretty good about what we’ve put in place, that it’s sustainable. The other thing about what I saw is that industry is really leaning in on doing these things. The low-carbon supply chains — a lot of glassmakers, cement facilities — are very interested in improving energy efficiency, are interested in carbon capture or using hydrogen as a heat source. And so what we have done is really looking at making sure they’re economic. All of these efforts that we’ve put in place are extremely bipartisan, and they’re essentially just supporting industry in a way such that they’re achievable because they’re economic.
Let’s talk a little bit about what’s next. Why did you want to work with Isometric? What are you going to be doing there?
When I was at DOE, from the beginning, we were looking at, you know, there’s a lot of the carbon removal portfolio where we don’t have the rigor in place to be able to determine the durability of the removals, the additionality of them, the time scale on which the carbon is actually removed, quantifying net removed. And so we started a commercialization effort, leveraging our national labs to help us to develop the framework. Isometric is working toward establishing rigorous frameworks, and I’m hoping to leverage the efforts ongoing at DOE — and with transparency, so that others may follow, which could lead to more durable removals and greater impact at the end of the day.
What about on the academic side of your career. Where do you plan to focus your research?
Some of the work that we were doing, or the team has been continuing to do while I’m at DOE, is mineralization, looking at different waste feedstocks that have alkalinity [a property that’s useful for carbon removal], like magnesium and calcium. One of the things that we’re going to focus a little bit more on is asking the question of, what else is there? You know, if there’s rare earth elements or critical minerals that could be used for clean energy technologies, EV motors, magnets for wind turbines. And so, I’m really excited about looking at these materials and seeing what value is there.
I’m also really excited about helping with the measurement and quantification of some of the more natural systems of removal, like forests. One of the new majors at Penn is artificial intelligence. I think there’s an opportunity right now to think about, how can we take data, whether it’s from drones or whether it’s from Lidar and airplanes or satellite data, bringing it together in an integrated way again, so that we have more robust databases that are also transparent.
There’s so many debates going on around carbon removal right now, and it feels like they often come down to philosophical differences. Are these debates important? Or do we just need to decide what we’re going to do and then reevaluate it later?
We’re not in a position anymore to think we can just decarbonize and not do greenhouse gas removals. We know we need to do both. And so I think that there are some kind of “no regrets” things that we can do — opportunities, as we’re scaling up both in the near term, to think about them in a coordinated way. In communities that don’t have solar today, imagine you have a direct air capture facility going in, and then they’re bringing clean energy that they’re using for direct air capture, but they’re bringing it for the first time ever to a community that wouldn’t otherwise have access.
But it really is regional. I think it’s regional in that there’s limited resources in any given region, whether it’s low-carbon energy, land, clean water, even geologic pore space. You have it in some states and not others. And so we really need to look at those resources and always prioritize decarbonizing, but recognize that it’s not necessarily one or the other.
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Because you never know what’s going to take off.
Not even 12 months of unceasingly bleak climate news could keep climate tech founders and funders from getting involved in some seriously sci-fi sounding ideas. While the first half of the year may have been defined by a general retrenchment, the great thing about about early-stage venture capital is that it very much still allows for — nay, encourages — the consideration of technologies so far beyond the mainstream that their viability is almost entirely untethered from current political sentiment.
Below are seven of the most fantastical technologies investors took a bet on this year, with almost all announced in just the past quarter alone. In an undeniably rough year for the sector, perhaps VCs are now ready to let their imaginations — and pocketbooks — run just a little bit wilder.
In November, the startup Terranova emerged from stealth with $7 million in seed funding and a plan to lift low-lying areas out of flood zones by deploying robots to inject a wood-based slurry deep underground, thereby raising the land above sea level. The lead investors were Outlander and Congruent Ventures.
“Terranova’s mission is nothing less than to terraform the earth and usher in a new era of resilience and societal abundance,” Terranova’s 24-year old CEO Laurence Allen said in a press release. He cofounded the company with his father, Trip Allen, who lives in the flood-prone Bay Area city of San Rafael.
The company says that its system, which consists of three robots and one “mothership,” can lift one acre by a foot per day, making it more cost-effective than other options for defending against climate change-driven flood risk, such as building a levee or a sea wall. Already the startup has quoted San Rafael $92 million to lift about 240 acres of land about four feet.
Not one, but two space-based solar companies made headlines this year. Just this month, Overview Energy emerged from stealth with plans to deploy satellites that beam energy via lasers directly to Earth, targeting preexisting utility-scale solar farms. The company has already raised $20 million in seed funding in a round led by Lowercarbon Capital, Prime Movers Lab, and Engine Ventures, and is now raising a Series A expected to close next spring.
Back in April, another space-based solar startup called Aetherflux raised a $50 million Series A led by Index Ventures and Interlagos. That funding will support the startup’s first launch, targeted for next year, which will deploy a constellation of satellites into low-earth orbit — a far lower altitude than Overview is targeting. These satellites will also use lasers to transmit solar energy to ground stations on Earth, where the power will be stored in batteries for later use.
If these companies can prove that their tech actually works in space, they have the potential to turn solar into an always available, 24/7 resource. That’s not going to happen in the next few years, though. Overview’s CEO Marce Berte told me that the company is aiming to put megawatts of power on the grid by 2030 and gigawatts by the mid-2030s, with the ultimate goal of building a system that can deliver the equivalent of 10% to 20% of global electricity use by 2050.
Did you know that low-frequency sound waves can extinguish a fire? It’s a relatively well-understood phenomenon, but now one company, Sonic Fire Tech, has raised $3.5 million to turn this hypothetical concept into a commercial firefighting tool. With a seed round co-led by Khosla Ventures, Third Sphere, and AirAngels, the startup hopes to launch pilots with homeowners, utilities, and firefighting agencies at the beginning of next year.
As Scientific American explained, the system emits low-frequency sound waves below the threshold of human hearing, which prevent and extinguish flames by displacing oxygen away from the fuel. This deprives a potential or existing fire of the air it needs to sustain combustion. The system can channel the soundwaves through ducts atop a building’s roof and beneath its eaves, or be installed on utility equipment. There’s even the potential for a “sonic backpack,” which would offer portable protection for firefighters.
The startup’s goal is to produce 500 units by the second quarter of next year, and it’s now seeking public-sector grant funding as well as partnerships with insurance companies for its novel “infrasound-based fire suppression.”
My colleague Robinson Meyer broke the news in October that an Israeli geoengineering startup called Stardust Solutions had raised a $60 million round led by Lowercarbon Capital. The company aims to develop tech that would enable solar radiation management — an as-of-now hypothetical method of cooling the planet by injecting aerosols into the stratosphere to reflect sunlight away from Earth — by the end of the decade.
The tech is controversial, however. Many experts believe that solar radiation management systems, if they’re developed at all, should be built by governments after much public deliberation. Stardust, by contrast, is a for-profit company seeking patent protection for its proprietary sunlight-reflecting particle. While the company says that the particle meets certain standards for safety and reflectivity, it has not disclosed what those standards are or anything about its composition.
The company’s CEO, Yanai Yedvab, said that Stardust is farther along than any other research efforts, public or private. And while some dispute the viability of Stardust’s proprietary particle, the fact that the company received a vote of confidence from a prominent climate tech VC indicates that this tech is entering the mainstream. As Rob put it, “Stardust may not play the Prometheus here and bring this particular capability into humanity’s hands. But I have never been so certain that someone will try in our lifetimes.”
Though climate tech investors have poured millions into the long-held dream of fusion energy, we’re likely still a long ways away from connecting a commercial reactor to the grid. But one startup, Maritime Fusion, is already looking to put fusion reactors on ships. The company raised a $4.5 million seed round last month led by the transportation firm Trucks VC to do just that.
The startup is developing a low power-density tokamak reactor that requires less power and less uptime than grid-connected power systems. According to TechCrunch, the startup projects that its first reactor will be up and running by 2032 and will cost about $1.1 billion to build, a far lower price than reactors on land will likely command. Another potential advantage is that at sea, fusion won’t have to compete with low-cost solar and wind resources, but rather more costly green shipping fuels such as ammonia and hydrogen.
"Breakeven fusion is on the horizon, but the grid may not be the first place fusion achieves commercial success," said Maritime Fusion’s CEO Justin Cohen in a press release.
Even with the rapid rise in grid-scale batteries, pumped storage hydropower still leads the world in total energy storage capacity. But traditional pumped hydro is costly to build and only feasible in specific geographies. One startup, Sizeable Energy, thinks it can overcome these constraints by building pumped hydro out at sea, raising $8 million in a round led by Playground Global to do so.
Traditional pumped-hydro systems store energy by using excess electricity to pump water into an elevated reservoir, then releasing it downhill through turbines when demand rises. Sizeable’s concept is the same, just offshore: One reservoir floats on the water’s surface, while the other — connected by a pipe and turbines — sits on the seafloor. When power is plentiful, brine is pumped into the upper reservoir; when it’s scarce, the brine gets released. And because that brine is heavier than the surrounding seawater, it naturally flows downwards to spin turbines.
Sizable is now working to deploy its pilot plant in Italy, with the goal of installing commercial projects at a variety of sites around the world next year.
This one’s a bit of a bonus. Technically Deep Fission, a startup planning to build tiny fission reactors in underground boreholes, raised its pre-seed round last year, But this year it went public via a curious SPAC merger on the lesser-known stock exchange OTCQB, raising $30 million in the process.
The idea is that building a reactor a mile underground will save costs and enhance safety, as it negates the need for the large pressure vessels and containment structures that are typically responsible for holding a reactor in place and preventing radioactive leaks. Instead, the company says that the surrounding rock will serve as a natural barrier and containment vessel.
But as Latitude Media pointed out, some are questioning whether the recent raise will be enough for the company to build what’s sure to be an expensive pilot by next July — as it aims to do — and to deploy reactors at the three project sites that it’s already announced. Next year certainly promises to be a reckoning for the hitherto unconsidered fortunes of the underground small modular reactor industry.
Microsoft dominated this year.
It’s been a quiet year for carbon dioxide removal, the nascent industry trying to lower the concentration of carbon already trapped in the atmosphere.
After a stretch as the hottest thing in climate tech, the CDR hype cycle has died down. 2025 saw fewer investments and fewer big projects or new companies announced.
This story isn’t immediately apparent if you look at the sales data for carbon removal credits, which paints 2025 as a year of breakout growth. CDR companies sold nearly 30 million tons of carbon removal, according to the leading industry database, CDR.fyi — more than three times the amount sold in 2024. But that topline number hides a more troubling reality — about 90% of those credits were bought by a single company: Microsoft.
If you exclude Microsoft, the total volume of carbon removal purchased this year actually declined by about 100,000 tons. This buyer concentration is the continuation of a trend CDR.fyi observed in its 2024 Year In Review report, although non-Microsoft sales had grown a bit that year compared to 2023.
Trump’s crusade against climate action has likely played a role in the market stasis of this year. Under the Biden administration, federal investment in carbon removal research, development, and deployment grew to new heights. Biden’s Securities and Exchange Commission was also getting ready to require large companies to disclose their greenhouse gas emissions and climate targets, a move that many expected to increase demand for carbon credits. But Trump’s SEC scrapped the rule, and his agency heads have canceled most of the planned investments. (At the time of publication, the two direct air capture projects that Biden’s Department of Energy selected to receive up to $1.2 billion have not yet had their contracts officially terminated, despite both showing up on a leaked list of DOE grant cancellations in October.)
Trump’s overall posture on climate change reduced pressure on companies to act, which probably contributed to there being fewer new buyers entering the carbon removal market, Robert Hoglund, a carbon removal advisor who co-founded CDR.fyi, told me. “I heard several companies say that, yeah, we wouldn't have been able to do this commitment this year. We're glad that we made it several years ago,” he told me.
Kyle Harrison, a carbon markets analyst at BloombergNEF, told me he didn’t view Microsoft’s dominance in the market as a bad sign. In the early days of corporate wind and solar energy contracts, he said, Microsoft, Google, and Amazon were the only ones signing deals, which raised similar questions about the sustainability of the market. “But what it did is it created a blueprint for how you sign these deals and make these nascent technologies more financeable, and then it brings down the cost, and then all of a sudden, you start to get a second generation of companies that start to sign these deals.”
Harrison expects the market to see slower growth in the coming years until either carbon removal companies are able to bring down costs or a more reliable regulatory signal puts pressure on buyers.
Governments in Europe and the United Kingdom introduced a few weak-ish signals this year. The European Union continued to advance a government certification program for carbon removal and expects to finalize methodologies for several CDR methods in 2026. That government stamp of approval may give potential buyers more confidence in the market.
The EU also announced plans to set up a carbon removal “buyers’ club” next year to spur more demand for CDR by pooling and coordinating procurement, although the proposal is light on detail. There were similar developments in the United Kingdom, which announced a new “contract for differences” policy through which the government would finance early-stage direct air capture and bioenergy with carbon capture projects.
A stronger signal, though, could eventually come from places with mandatory emissions cap and trade policies, such as California, Japan, China, the European Union, or the United Kingdom. California already allows companies to use carbon removal credits for compliance with its cap and invest program. The U.K. plans to begin integrating CDR into its scheme in 2029, and the EU and Japan are considering when and how to do the same.
Giana Amador, the executive director of the U.S.-based Carbon Removal Alliance, told me these demand pulls were extremely important. “It tells investors, if you invest in this today, in 10 years, companies will be able to access those markets,” she said.
At the same time, carbon removal companies are not going to be competitive in any of these markets until carbon trades at a substantially higher price, or until companies can make carbon removal less expensive. “We need to both figure out how we can drive down the cost of carbon removal and how to make these carbon removal solutions more effective, and really kind of hone the technology. Those are what is going to unlock demand in the future,” she said.
There’s certainly some progress being made on that front. This year saw more real-world deployments and field tests. Whereas a few years ago, the state of knowledge about various carbon removal methods was based on academic studies of modeling exercises or lab experiments, now there’s starting to be a lot more real-world data. “For me, that is the most important thing that we have seen — continued learning,” Hoglund said.
There’s also been a lot more international interest in the sector. “It feels like there’s this global competition building about what country will be the leader in the industry,” Ben Rubin, the executive director of the Carbon Business Council, told me.
There’s another somewhat deceptive trend in the year’s carbon removal data: The market also appeared to be highly concentrated within one carbon removal method — 75% of Microsoft’s purchases, and 70% of the total sales tracked by CDR.fyi, were credits for bioenergy with carbon capture, where biomass is burned for energy and the resulting emissions are captured and stored. Despite making up the largest volume of credits, however, these were actually just a rare few deals. “It’s the least common method,” Hoglund said.
Companies reported delivering about 450,000 tons of carbon removal this year, according to CDR.fyi’s data, bringing the cumulative total to over 1 million tons to date. Some 80% of the total came from biochar projects, but the remaining deliveries run the gamut of carbon removal methods, including ocean-based techniques and enhanced rock weathering.
Amador predicted that in the near-term, we may see increased buying from the tech sector, as the growth of artificial intelligence and power-hungry data centers sets those companies’ further back on their climate commitments. She’s also optimistic about a growing trend of exploring “industrial integrations” — basically incorporating carbon removal into existing industrial processes such as municipal waste management, agricultural operations, wastewater treatment, mining, and pulp and paper factories. “I think that's something that we'll see a spotlight on next year,” she said.
Another place that may help unlock demand is the Science Based Targets initiative, a nonprofit that develops voluntary standards for corporate climate action. The group has been in the process of revising its Net-Zero Standard, which will give companies more direction about what role carbon removal should play in their sustainability strategies.
The question is whether any of these policy developments will come soon enough or be significant enough to sustain this capital-intensive, immature industry long enough for it to prove its utility. Investment in the industry has been predicated on the idea that demand for carbon removal will grow, Hoglund told me. If growth continues at the pace we saw this year, it’s going to get a lot harder for startups to raise their series B or C.
“When you can't raise that, and you haven't sold enough to keep yourself afloat, then you go out of business,” he said. “I would expect quite a few companies to go out of business in 2026.”
Hoglund was quick to qualify his dire prediction, however, adding that these were normal growing pains for any industry and shouldn’t be viewed as a sign of failure. “It could be interpreted that way, and the vibe may shift, especially if you see a lot of the prolific companies come down,” he said. “But it’s natural. I think that’s something we should be prepared for and not panic about.”
America runs on natural gas.
That’s not an exaggeration. Almost half of home heating is done with natural gas, and around 40% — the plurality — of our electricity is generated with natural gas. Data center developers are pouring billions into natural gas power plants built on-site to feed their need for computational power. In its -260 degree Fahrenheit liquid form, the gas has attracted tens of billions of dollars in investments to export it abroad.
The energy and climate landscape in the United States going into 2026 — and for a long time afterward — will be largely determined by the forces pushing and pulling on natural gas. Those could lead to higher or more volatile prices for electricity and home heating, and even possibly to structural changes in the electricity market.
But first, the weather.
“Heating demand is still the main way gas is used in the U.S.,” longtime natural gas analyst Amber McCullagh explained to me. That makes cold weather — experienced and expected — the main driver of natural gas prices, even with new price pressures from electricity demand.
New sources of demand don’t help, however. While estimates for data center construction are highly speculative, East Daily Analytics figures cited by trade publication Natural Gas Intel puts a ballpark figure of new data center gas demand at 2.5 billion cubic feet per day by the end of next year, compared to 0.8 billion cubic feet per day for the end of this year. By 2030, new demand from data centers could add up to over 6 billion cubic feet per day of natural gas demand, East Daley Analytics projects. That’s roughly in line with the total annual gas production of the Eagle Ford Shale in southwest Texas.
Then there are exports. The U.S. Energy Information Administration expects outbound liquified natural gas shipments to rise to 14.9 billion cubic feet per day this year, and to 16.3 billion cubic feet in 2026. In 2024, by contrast, exports were just under 12 billion cubic feet per day.
“Even as we’ve added demand for data centers, we’re getting close to 20 billion per day of LNG exports,” McCullagh said, putting more pressure on natural gas prices.
That’s had a predictable effect on domestic gas prices. Already, the Henry Hub natural gas benchmark price has risen to above $5 per million British thermal units earlier this month before falling to $3.90, compared to under $3.50 at the end of last year. By contrast, LNG export prices, according to the most recent EIA data, are at around $7 per million BTUs.
This yawning gap between benchmark domestic prices and export prices is precisely why so many billions of dollars are being poured into LNG export capacity — and why some have long been wary of it, including Democratic politicians in the Northeast, which is chronically short of natural gas due to insufficient pipeline infrastructure. A group of progressive Democrats in Congress wrote a letter to Secretary of Energy Chris Wright earlier this year opposing additional licenses for LNG exports, arguing that “LNG exports lead to higher energy prices for both American families and businesses.”
Industry observers agree — or at least agree that LNG exports are likely to pull up domestic prices. “Henry Hub is clearly bullish right now until U.S. gas production catches up,” Ira Joseph, a senior research associate at the Center for Global Energy Policy at Columbia University, told me. “We’re definitely heading towards convergence” between domestic and global natural gas prices.
But while higher natural gas prices may seem like an obvious boon to renewables, the actual effect may be more ambiguous. The EIA expects the Henry Hub benchmark to average $4 per million BTUs for 2026. That’s nothing like the $9 the benchmark hit in August 2022, the result of post-COVID economic restart, supply tightness, and the Russian invasion of Ukraine.
Still, a tighter natural gas market could mean a more volatile electricity and energy sector in 2026. The United States is basically unique globally in having both large-scale domestic production of coal and natural gas that allows its electricity generation to switch between them. When natural gas prices go up, coal burning becomes more economically attractive.
Add to that, the EIA forecasts that electricity generation will have grown 2.4% by the end of 2025, and will grow another 1.7% in 2026, “in contrast to relatively flat generation from 2010 to 2020. That is “primarily driven by increasing demand from large customers, including data centers,” the agency says.
This is the load growth story. With the help of the Trump administration, it’s turning into a coal growth story, too.
Already several coal plants have extended out their retirement dates, either to maintain reliability on local grids or because the Trump administration ordered them to. In America’s largest electricity market, PJM Interconnection, where about a fifth of the installed capacity is coal, diversified energy company Alliance Resource Partners expects 4% to 6% demand growth, meaning it might even be able to increase coal production. Coal consumption has jumped 16% in PJM in the first nine months of 2025, the company’s Chairman Joseph Kraft told analysts.
“The domestic thermal coal market is continuing to experience strong fundamentals, supported by an unprecedented combination of federal energy and environmental policy support plus rapid demand growth,” Kraft said in a statement accompanying the company’s October third quarter earnings report. He pointed specifically to “natural gas pricing dynamics” and “the dramatic load growth required by artificial intelligence.”
Observers are also taking notice. “The key driver for coal prices remains strong natural gas prices,” industry newsletter The Coal Trader wrote.
In its December short term outlook, the EIA said that it expects “coal consumption to increase by 9% in 2025, driven by an 11% increase in coal consumption in the electric power sector this year as both natural gas costs and electricity demand increased,” while falling slightly in 2026 (compared to 2025), leaving coal consumption sill above 2024 levels.
“2025 coal generation will have increased for the first time since the last time gas prices spiked,” McCullagh told me.
Assuming all this comes to pass, the U.S.’s total carbon dioxide emissions will have essentially flattened out at around 4.8 million metric tons. The ultimate cost of higher natural gas prices will likely be felt far beyond the borders of the United States and far past 2026.