Data Centers Are Driving a New U.S. Natural Gas Buildout

Data centers, fueled by the artificial intelligence revolution, are sparking a new wave of natural gas construction in the United States. Fueled by the insatiable demand of hyperscale data centers, Big Tech players are constructing massive power plants to support their energy needs. Amazon is building a massive gas-fired power plant in Texas, which could become the single-largest emitter of power-related greenhouse gases in the entire country.

Nvidia, alongside SoftBank and the federal government, will develop the US's largest fossil-fuel plant to power OpenAI's Ohio OpenAI project. Microsoft is also in discussions with Chevron regarding a $7 billion gas-powered data center in Texas.

A June report from Business Insider predicts that if all data centers permitted through 2025 come online, they will consume between 224.3 terawatt-hours and 358.8 terawatt-hours of electricity annually, a 50% increase from the previous year. The United States now accounts for roughly one-third of all planned gas-fired capacity worldwide, with Texas adding new proposals faster than any other region.

However, the development of these plants remains uncertain due to bottlenecks in gas turbine supply and potential political and social backlash. Despite this, the energy demands of data centers are largely falling on residential utility customers, contributing to an energy affordability crisis. Recent polls show that 75% of voters oppose the development of new data centers in their area.

The Trump administration has attempted to address this issue by requiring AI firms to supply their own energy, but this approach may not alleviate the financial burden on consumers while pushing gas power to new heights, threatening Silicon Valley's decarbonization commitments.