The Surprising Shift to Natural Gas Amid the AI Boom

The artificial intelligence (AI) race is rewriting the energy landscape in the United States, with tech companies driving an unprecedented demand for electricity. This surge has caught many by surprise, as utilities and tech giants are increasingly turning to natural gas-fired power plants to meet their energy needs. This trend is not only upending earlier predictions about the decline of fossil fuels but also raising alarms among climate scientists and activists, who worry that this reliance on natural gas could derail efforts to combat climate change.

Why the Sudden Rush to Natural Gas?

The tech industry’s insatiable appetite for power is being fueled by the rapid growth of AI, data centers, and cryptocurrency mining. Companies like Meta and other Big Tech players are snapping up land and building new power projects to support their operations. While some are investing in renewable energy sources like solar, wind, and geothermal, many are opting for natural gas because it is seen as a cheap and reliable option. Analysts at Enverus note that natural gas-fired power is growing faster than ever before, with nearly 46 gigawatts of new capacity expected to come online in the next five years—significantly more than the 39 gigawatts added in the last five years.

The Collision with Climate Goals

The rise of natural gas-fired power plants is a direct challenge to global climate goals. Scientists warn that to avoid the worst impacts of climate change, the U.S. must achieve net-zero greenhouse gas emissions by 2050. However, the construction of new gas plants, which can operate for decades, undermines this effort. Burning natural gas produces carbon dioxide, and methane leaks from pipelines and wellheads are an even more potent greenhouse gas. Experts like John Quigley of the University of Pennsylvania’s Kleinman Center for Energy Policy argue that building new gas plants is a step backward. “At a top level, we will not get to net zero by 2050 if we are building new gas plants. Period,” he said.

The Future of Gas-Fired Power

Despite the concerns, utilities and tech companies are pushing ahead with gas-fired projects. For example, Entergy is building a massive 2,300-megawatt plant in Louisiana to power Meta’s new AI data center. Other major projects include a 1,400-megawatt plant by Duke Energy in North Carolina and Georgia Power’s plans for up to 1,300 megawatts of new gas capacity. These plants are often justified as replacements for older, dirtier coal plants or as temporary solutions to meet growing demand. However, environmental groups like the Natural Resources Defense Council warn that the U.S. must drastically reduce its fleet of roughly 1,500 gas plants to just 100 by 2035 to meet its climate commitments.

The Arms Race for Power

The demand for reliable and affordable power has created an arms race among tech companies. In regions like Texas, data center developers are competing to secure power quickly and efficiently. Chris Kalnin of BKV, a major gas producer in Texas, explained that data center operators are prioritizing speed and cost-effectiveness to attract cloud computing customers. This has led to a boom in gas-fired power plants being built directly next to data centers. Meanwhile, natural gas pipeline operators are also benefiting from the surge in demand, with many eager to expand their infrastructure to meet the growing needs of the tech industry.

Is There Hope for a Greener Future?

While the current trend seems ominous, there are reasons to remain optimistic. Some tech companies are making strides in energy efficiency, particularly in how they cool their servers. Additionally, analysts believe that utilities may be overestimating future electricity demand, as data center proposals often involve multiple locations, but only a fraction are actually built. Environmental advocates like Amanda Levin of the Natural Resources Defense Council argue that many planned gas plants may never come online due to overestimation or improved efficiency. Moreover, the rise of renewable energy and battery storage projects could eventually displace natural gas as the primary power source. For now, the race between fossil fuels and renewables continues, with the planet’s future hanging in the balance.