By Ryan Dezember

A big promise of the American shale-drilling boom was cheap, plentiful natural gas that would give U.S. manufacturers an edge against global competitors.

Fifteen years in, U.S. gas production continues to reach new highs, the country has become the world's largest exporter of liquefied natural gas and yet domestic manufacturers say they are increasingly cut off from fuel during the coldest winter days.

As frigid weather swept over the mid-Atlantic region late last month, Evonik Industries' plant in Havre de Grace, Md., received notice from its local utility: Shut off the gas or risk huge financial penalties.

In many parts of the country, there isn't enough pipeline capacity to guarantee manufacturers a flow of gas when heating and cooling demand surges. That doesn't happen to power plants and homes, where gas is needed to keep people from freezing. Nor are firms that ship gas to overseas buyers cut off, thanks to long-term supply deals guaranteeing them space on pipelines.

Workers at the Evonik plant were dispatched to close the gas supply valve into the factory, where the German chemical maker produces silica for toothpaste and food products.

Without gas for its manufacturing process, the plant ceased production. Emergency heaters were fired up so equipment didn't freeze. Workers were assigned maintenance tasks until the gas could flow again. The outage lasted seven days.

"It literally goes into mothball mode," said Len Kientz, Evonik's director of energy management in North America. "It really hurt because we lost a week of production time."

Soaring on-the-spot gas prices hit Evonik facilities in Illinois, Indiana, Tennessee and Nebraska this winter, too.

International Paper, the country's largest producer of corrugated packaging, said its containerboard mills and box plants have been plagued by gas availability issues.

Several of its box plants in Texas were without gas for days during last month's winter storm. Others only were able to keep running because the company paid prices for on-the-spot gas that had surged to several times the typical price. The company has had to truck fuel oil to one of its mills, which has been without gas since Jan. 23.

"There is a huge concern within the industrial sector that we are the lowest priority for gas supply and are curtailed first," an International Paper spokeswoman said.

Pipelines curtailed or otherwise restricted the flow of gas to manufacturers more than 40 times last year, said Paul Cicio, chief executive of Industrial Energy Consumers of America, a trade group with members that operate more than 12,000 U.S. manufacturing facilities. "This year it's going to be that or worse," he said.

Cicio said his tally doesn't include the manufacturers that wind down when high gas prices render their operations unprofitable. On-the-spot gas deliveries at trading hubs in areas hardest hit by the recent winter storm shot to some of the highest prices on record.

In New York, gas rose to nearly $150 per million British thermal units from around $3. In New England and Chicago, a million British thermal units topped $80 and $40, respectively. Prices spiked similarly along supply routes in the Southeast and up the Atlantic Coast. Although prices fell back almost as fast as they rose, gas in some areas remains several times more expensive than at the start of the heating season.

Manufacturers say they are at a disadvantage to exporters, which have long-term supply deals with overseas utilities and global energy firms that enable them to in turn lock up capacity on U.S. pipelines for many years.

The manufacturer's group has asked the Federal Energy Regulatory Commission to shorten the length of pipeline supply contracts to a few years, from more than a decade.

"Very few industries can make a commitment that long," said Aubrey Hilliard, Carolinas president at gas marketer Texican Natural Gas. "They end up the odd man out and their capacity gets taken by power plants, and now data centers."

The manufacturer's group has also requested that the Energy Department exercise its power to restrict uncontracted LNG shipments during heat waves and winter storms.

Gas-supply interruptions risk offsetting a big advantage that American manufacturers have had over global competitors ever since shale drillers flooded the market with cheap fuel.

"Natural gas accounts, in my opinion, for like 100% of the unexpected American surge in relative GDP," said Jeremy Grantham, co-founder and long-term investment strategist at Boston money-manager GMO. "Everyone who's operating in heavy industry is operating at one-third the cost of Europe and Japan because everyone uses natural gas."

The price gap between the U.S. and other industrial economies grew wide enough that it wasn't long after shale-drilling took off that energy firms were scrapping plans for LNG import terminals and instead planning export facilities.

A similar fight for fuel emerged in gas-rich Australia. Energy companies fearing potential export restrictions agreed in 2022 to offer uncontracted gas to local buyers before seeking overseas customers in a deal the Australian government said averted a domestic supply crisis.

U.S. energy executives and LNG advocates say there is no evidence that exports have caused higher prices or local availability issues.

President Trump has advocated greater energy exports as a way of gaining geopolitical sway as well as reducing the trade deficit. His administration has approved new LNG facilities, which are expected to help double export capacity by 2030. The president has also pressured trade partners, including the European Union, to commit to buy much more U.S. LNG.

"LNG exports have motivated U.S. production growth and productivity improvements that exert downward price pressures and benefit American consumers," Dean Foreman, chief economist of the Texas Oil & Gas Association, wrote last year in a study.

LNG industry officials note that the flow of gas into export terminals dropped during the worst of the recent winter storm, when about 15% of U.S. production became blocked in frozen wells from West Texas to Appalachia.

Some facilities sold gas back into local markets, where prices had surged well above those overseas, analysts say. Terminals in Maryland and Georgia that typically export LNG unloaded tankers from Trinidad and Tobago and fed the fuel into the U.S. gas grid in late January, according to financial-data provider LSEG.

The U.S. produces plenty of gas, but bottlenecks abound, said Kevin Greiner, CEO of Gas South, which supplies natural gas to about 500,000 customers in the eastern U.S., including curtailed manufacturers.

"We just don't have enough pipe capacity to get the gas from where it's being produced to where it's needed," he said.

Write to Ryan Dezember at ryan.dezember@wsj.com

(END) Dow Jones Newswires

February 10, 2026 12:00 ET (17:00 GMT)

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