US data centers could consume more natural gas than Germany and Japan combined by 2035
The AI frenzy could push U.S. data centers to become one of the largest consumers of natural gas in the world.
By 2035, U.S. data centers may consume more natural gas than Germany and Japan combined, according to a BloombergNEF report. Over the next decade, data centers are expected to be the second-largest driver of natural gas demand growth, trailing only LNG exports. The facilities are projected to consume approximately 18 billion cubic feet of natural gas per day, nearly double the amount previously predicted. This forecast accounts for the fact that not all announced data center projects will be completed.
Data centers generating power on-site have recently garnered attention, with major tech companies like Meta, Microsoft, Google, and Amazon announcing plans for new natural gas power plants that circumvent the grid. These on-site-powered data centers alone could consume 2.9 to 3.4 billion cubic feet of natural gas per day by 2035 – roughly the same amount consumed by all current data centers today.
However, according to BloombergNEF, grid-connected data centers will likely contribute an additional 15 billion cubic feet of natural gas consumption by the power sector by the middle of the next decade.
To put this into perspective, this surge in demand would be five times greater than the combined growth from all other grid-connected sectors. Should this forecast come to fruition, it could drive up natural gas prices. The buildout of today's data centers has traditionally relied on stable natural gas prices, which have been relatively low in recent years.
However, analysts at Noreva warn that the combined impact of the data center boom and rising LNG exports could lead to a surge in prices. Even if tech companies and utilities can absorb such a price increase, consumers may not be able to. Burning one cubic foot of natural gas releases about 60 grams of carbon dioxide into the atmosphere, including extraction, processing, and distribution.
This additional demand from data centers would result in 1 million metric tons of extra greenhouse gas emissions daily, accounting for roughly 12% of current U.S. greenhouse gas emissions.
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