Investing.com -- Data centers in the United States are projected to consume more natural gas than most countries within the next ten years, according to a new outlook from BloombergNEF.

Natural gas consumption for electricity generation at data centers is forecast to increase by 15 billion cubic feet per day in the decade ending in 2035, even when accounting for planned projects that may never be completed. This volume exceeds the current gas consumption of all nations except China, Russia, Iran and the United States, based on data from the US Energy Information Administration. The projection is more than double BloombergNEF's December forecast of 6.9 billion cubic feet per day.

Natural gas is expected to supply 69% of the power needed by new grid-connected facilities in BloombergNEF's forecast. The fuel's abundance and low production cost in the US, combined with gas power plants' ability to quickly adjust output as needed by 24/7 data centers, drives this expectation.

The power sector becomes the second-largest driver of US gas demand in the decade through 2035, trailing only new liquefied natural gas export terminals entering service on the US Gulf Coast. Power-sector gas consumption is projected to reach 54 billion cubic feet per day by 2035, up 18 billion cubic feet per day from 2025, while gas demand from LNG exports rises by 21 billion cubic feet per day.

Henry Eaton, a gas market analyst at BloombergNEF and the lead author of the report, said the forecast for data center gas consumption carries "fairly large" error bars "both to the upside and the downside."

The combined gas needs of AI data centers and LNG export plants present challenges for domestic gas producers, which are currently projected to increase gas output by 35 billion cubic feet per day between 2025 and 2035 but will need to produce an additional 11 billion cubic feet per day to meet forecasted demand.