Anthony Yuen, a natural gas analyst at Citi, predicts demand will "mushroom" staring next year and grow 33 percent by 2020 from last year's 73 billion cubic feet a day.
But now there is concern about whether the natural gas industry can produce all of the gas their old and new customers need, and deliver it to them through a pipeline system that hasn't been able to keep up with the new demand.
"They can," said Bob MacKnight, a director at the research and analysis firm IHS at the firm's annual CERAWeek energy conference. "The key question is, 'Will they?'"
Drillers have suffered significant losses in recent years because of persistently low prices. In 2012, natural gas fell below $2 for the first time in a decade. Many companies curtailed gas production and switched to drilling for oil, which is more profitable because of high prices. Natural gas production rose just 1.5 percent last year, while oil production in the U.S. rose 15 percent to 7.4 million barrels a day.
So far this year, the natural gas futures price has averaged $4.82 per 1,000 cubic feet. That's 20 percent higher than last year's average and 70 percent higher than 2012.
Retail prices are still far below where they were in the early and middle 2000s. But the average residential price is expected to rise 12 percent this year to $11.56 per 1,000 cubic feet, according to the Energy Department. It would be the first increase in residential prices since 2008.
But drilling companies aren't yet convinced that higher natural gas prices will last. Andrew Mackenzie, CEO of BHP Billiton, the Australian mining and oil and gas giant, said in an interview at annual CERAWeek energy conference hosted by research and analysis firm IHS, that he will keep all of his 25 U.S.-based rigs probing for oil. "We have to worry about the sustainability of current (gas) prices," he said.