A new research report from energy research firm Noreva warns that hyperscalers betting heavily on natural gas to power AI data centers may face price shocks in the coming years. Natural gas prices could triple in some U.S. regions as demand from Amazon, Google, Meta, and Microsoft collides with declining supply growth and rising liquefied natural gas (LNG) exports.

According to Noreva CEO Peter Gardett, the energy market has been lulled into a false sense of stability. “I think everyone in the energy markets has been lulled into a sense that gas prices can’t go up,” he said. “You just need simple arithmetic to get to a much tighter gas market than you were in just a few years ago.”

Hyperscalers are placing big bets on cheap natural gas. In March, Meta announced plans for a 7.5-gigawatt natural gas power plant in Louisiana. Microsoft and Google each said they’d build gigawatt-scale gas plants in Texas, and Amazon plans a 7.6-gigawatt gas plant in Texas. For companies that historically avoided large capital expenditures, this marks a significant shift into physical infrastructure and unfamiliar energy markets. Gardett said at least one investor was “surprised” by how much natural gas price risk hyperscalers are willing to take on. “They’re doing things that are not normal for an off-taker to do,” he said.

Noreva expects natural gas prices to soar above $10 per million BTUs in certain hubs. Current prices range from about $2 to $4.50 per million BTUs, with Henry Hub at just under $3. Fuel represents about half the cost of electricity from a large power plant, so a doubling or tripling of prices could make “bring your own power” AI data centers much more expensive to run. That could drive up token costs or push hyperscalers to connect to the grid, raising electricity prices for everyone.

While futures contracts aren’t anticipating big changes, Gardett said he’s not convinced they’re right. Natural gas prices have been stable due to relatively flat demand and steady supply additions, but he expects supply growth to slow and new wells to get more expensive. “What’s changing the number is that finally we’re connecting the domestic gas market to the global gas market,” he said. “And the second is the AI demand pull.”

In West Texas, natural gas has historically been a byproduct of oil drilling, sold at a discount due to limited pipeline infrastructure. But new pipelines are being built to connect to export markets, which will link regional prices to national and international markets. Even modest price swings near hyperscalers’ data centers could be magnified elsewhere. “You will get places where you get a lot of gas next to someplace where there’s none, and so you’ll get those big differentials,” Gardett said, predicting some regions could see prices above $10 per million BTUs for extended periods.

Under that scenario, hyperscalers’ natural gas consumption could add a new dimension to the data center backlash. Already, 80% of consumers are worried about data centers’ impact on their utility bills. Gardett summed it up: “On future Alphabet earning calls, you will hear them talk about the correlation between natural gas pricing and Google results, which is strange, but that’s where we are.”