Henry Hub vs Waha.

Henry Hub, in Louisiana, is the pricing point behind the U.S. natural gas benchmark — the number quoted when someone says the price of gas. Waha, in West Texas, is the Permian Basin's local pricing hub. The difference between the two is called basis, and it is one of the most information-dense numbers in energy: a single spread that tells you whether a basin's gas can reach its buyers.

Two hubs, two jobs

Henry Hub sits where major pipelines converge near the Gulf Coast, which is why the national futures contract settles there: it is the most connected, most liquid point in the system, and its price reflects national supply and demand. Waha sits where Permian gas gathers before leaving the basin. Its price reflects something much narrower — how much gas West Texas is producing versus how much the pipelines out of it can carry.

Why basis exists

If gas moved freely, every hub would trade near the benchmark, separated only by the cost of transport. Gas does not move freely; pipelines have fixed capacity. Basis is the market pricing that constraint. When takeaway from a basin is ample, the local hub tracks Henry closely. When production presses against pipeline limits, in-basin gas must discount until someone absorbs the surplus, and the spread widens.

Reading the spread

A narrow Waha–Henry basis says the basin's gas is reaching market. A wide one says supply is straining takeaway. A negative Waha price — which has happened repeatedly — says the constraint is binding hard: producers paying to have gas removed, because pipeline space is worth more than the molecules in it. The spread is a live gauge of stranded energy, and a persistently wide basis is the signature of a basin holding more energy than exits. Why the Permian produces that signature structurally — oil-driven supply that grows no matter what gas is worth — is the deeper story in why Waha gas is so cheap.

Why in-basin buyers price off Waha

A consumer inside the basin — a processing plant, a compressor station, behind-the-meter power generation — buys gas where it stands, so its fuel cost tracks the local hub, not the national one. That is the quiet advantage of consuming energy where it is produced: the buyer lives permanently on the cheap side of the constraint, while everyone downstream of the pipelines pays benchmark prices plus transport. Converting basin-priced gas into electricity for load on the same ground is the engine behind the behind-the-meter cost math.

About Corley Energy

Corley Energy is a behind-the-meter independent power producer, founded in 2024 by Jake Corley, Tim Bozeman, and Mark Meyer. We convert stranded Permian Basin natural gas into firm, contracted electricity for AI data centers at Power Foundry, our ~1,000-acre development in Upton County, Texas. Start with what a power foundry is, see the company facts, or check current capacity on the Sites page.

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