Rising Gas Demand and the Promise of RNG

Alex Rivera 4

Hey everyone, welcome back to Digest This: Unpacking Our Sustainable Future. I’m Alex Rivera here with my co-host, Emily Nguyen. Today, we’ve got a lot to dig into—storms, surging prices, and, believe it or not, opportunity. Emily, can you set the scene for us with what happened during Winter Storm Fern? The numbers are wild.

Emily Nguyen 4

Yeah, absolutely, Alex. So, Winter Storm Fern hit hard—like, across the Lower 48, not just a small area. The U.S. actually saw the biggest natural gas storage withdrawal ever during the week ending January 30, 2026. The numbers from the Energy Information Administration? 360 billion cubic feet gone in just one week. That’s nearly double—well, 89% over—the five-year average for that time period. Just to put that in context, it’s a record no one really wanted to break.

Alex Rivera 4

Yeah, it’s kind of like watching your savings account suddenly drain in a week...except this is energy, and millions of people needed heat. Residential and commercial demand shot up almost thirty percent. I’m pretty sure a lot of folks on the Gulf Coast thought they could escape the freeze, but even they got hit—temperatures were below freezing down there.

Emily Nguyen 4

Exactly. And it wasn’t just about demand going up. You had outages—these freeze-offs and production cuts. It’s almost like a double whammy: more people needing gas, and less available because equipment literally froze. It’s not just houses getting cold, it’s also about natural gas-fired power plants, schools, hospitals—the whole system suddenly under strain.

Alex Rivera 4

Right, and it translated to real pain at the meter. The Henry Hub spot price soared to $9.03 per M.M.B.T.U. That’s more than four bucks higher than the previous week, and I think over five higher than a year ago. I mean, even if you’re not tracking the market every day, that sort of jump is, well, you can’t miss it if you’re paying bills. We’ve talked about storage withdrawals supplementing supply before, but this was kind of a stress test for the system.

Emily Nguyen 4

Yeah, absolutely. And what stood out to me is that storage was already running pretty tight after this withdrawal—so even after all that stockpiled gas went out to meet demand, we ended up below the five-year average for this time of year. It’s another reminder of just how closely linked weather, demand, and resilience really are.

Alex Rivera 4

Honestly, it’s a little anxiety-inducing for anyone thinking about next winter, or, you know, the next big storm. Which kind of brings us over to the bigger context—what’s going on globally, and how these shocks spill over. Emily, want to walk us into the global story?

Emily Nguyen 4

Definitely. So, if you zoom out and look at 2026, we’re seeing this huge liquefied natural gas, or LNG, wave—a lot of it coming from North America. The International Energy Agency expects this supply surge to really reshape global gas markets. And, Alex, you know, LNG is sort of the bridge connecting all these regional gas systems into a much larger, interconnected market. In fact, global LNG supply went up nearly seven percent in 2025, and most of that growth hit in the second half of the year.

Alex Rivera 4

Yeah, North America’s, like, leading the charge there, right? The U.S. brought on over 80 billion cubic meters of new capacity just in the last year. It’s changing the game, especially since so much of it is what they call, uh, “destination-flexible”—meaning the cargoes can go wherever there’s demand, instead of being locked into fixed routes or contracts.

Emily Nguyen 4

Exactly, and that flexibility is a game changer, especially for regions like Asia—China and emerging Asian economies are set to drive nearly two percent demand growth this year, mostly thanks to that additional LNG supply. It’s interesting: as these global links tighten, we’re seeing price correlations shoot up between Europe, Asia, and North America. The highs and lows get passed around much more quickly now due to LNG’s ability to respond to and redistribute shocks.

Alex Rivera 4

It makes those winter price surges we just talked about not just a U.S. story, but an international one, right? That volatility, the spikes we saw—everyone’s kind of riding that same rollercoaster. And Emily, you mentioned to me before that all this flexibility can actually help manufacturers in Asia manage costs a bit better, even when things get wild elsewhere. Is that right?

Emily Nguyen 4

Yeah, so, it’s not perfect—there’s still a lot of volatility—but with more destination-flexible LNG, companies in Asia can sometimes shop around for the best deals or avoid the worst spikes by adjusting deliveries. For some manufacturers, especially in highly competitive sectors, that can mean the difference between staying profitable when input prices swing and having to scale back production. But, like the IEA points out, there are still risks—geopolitical, weather—you name it. So flexibility helps, but it’s not a cure-all.

Alex Rivera 4

I mean, it’s super complicated. And honestly, the amount of new investment—over 90 billion cubic meters of additional annual capacity just approved—is wild. But with all this conventional gas bouncing around, I think it’s a great time to talk about how we fit renewables like RNG into this new picture. Because demand’s going up, supply is flexible, but—

Emily Nguyen 4

—but decarbonization isn’t taking a break. Let’s talk about where Renewables, and specifically RNG, actually fit in.

Emily Nguyen 4

So, with all this new LNG and conventional gas capacity, the pressure’s on—not just to meet demand, but to do it sustainably. Countries and companies are genuinely looking at Renewable Natural Gas because, unlike conventional supply, RNG helps decarbonize the system as a drop-in solution. Plus, the weather shocks we saw back in January? They really highlight why having diverse sources like RNG matter.

Alex Rivera 4

Right, I mean, think about the freeze-offs we saw—those generally hit the big, centralized gas production areas. But RNG comes from lots of smaller, scattered sites: dairies, landfills, wastewater, you name it. Those don’t all freeze out at the same time, so you get more resilience, especially when the traditional system is stretched. It’s kind of like a diversified portfolio for your energy supply.

Emily Nguyen 4

That’s a good analogy, Alex. And the momentum is real. You’ve got corporations interested in blending RNG into their energy mix, both to lower emissions and to hedge against price spikes or outages. Regulators too—they’re increasingly laying out rules that not only allow, but encourage or require RNG blending. I mean, we saw it with sustainability targets and city-level mandates in, what, episode 38 when we looked at Denver’s project?

Alex Rivera 4

Yeah, and on the business side, these kinds of policies and investments actually enable broader adoption. It’s not just a green badge, it’s also risk management—an insurance policy when things get weird. And as global gas systems get more interconnected and, uh, volatile, that distributed resilience becomes more valuable. I feel like every episode, we keep coming back to this: integration isn’t just about tech or policy, it’s about weaving resilience into the foundation, right?

Emily Nguyen 4

Completely. And honestly, as all these new market realities hit, I keep seeing RNG’s role becoming more central. Especially in times of crisis, the flexibility and sustainability upside really matter. Alright, we’ve covered a lot—from record withdrawals and price swings to this shifting, interconnected market and the rise of RNG. I’m sure there are more twists ahead as regulations evolve and the market keeps moving.

Alex Rivera 4

We’ll be keeping an eye on it all for you. Thanks for listening to Digest This. Emily, always great to dig into these topics with you.

Emily Nguyen 4

Likewise, Alex. And thanks to everyone out there for joining us again. Don’t forget to tune in next time for more on the future of sustainable energy. See you soon!