The AI race has become so heated that by 2035, U.S. data centers are predicted to consume more natural gas than Germany and Japan combined.
Over the next decade, data centers are expected to become the second largest driver of natural gas demand growth after LNG exports. The facility could consume about 18 billion cubic feet per day, nearly double the amount the organization predicted just nine months ago, according to a new report from BloombergNEF.
The new forecast takes into account that not all announced data center projects will be completed.
Data centers that generate electricity on-site have made headlines in recent months, with Meta, Microsoft, Google, and Amazon all announcing plans for new natural gas power plants that bypass the grid. Such projects are expected to consume 2.9 to 3.4 billion cubic feet per day by 2035. This is about the same amount that all data centers consume today, including the natural gas used to generate electricity for the power grid.
But on-site data centers may only account for a small portion of overall demand growth, according to BloombergNEF.
By the middle of the next decade, grid-connected data centers are expected to add an additional 15 billion cubic feet of natural gas per day to the power sector. To put this into context, this is five times the combined demand of all other grid-connected sectors by 2035.
If this tremendous demand growth materializes, natural gas prices could rise.
Much of today’s data center construction relies on the stable natural gas prices that have prevailed in recent years. But analysts at Noreva think that may be a false hope. The combined effects of the data center boom and increased LNG exports could push prices higher. Even if tech companies’ balance sheets can withstand such a surge, utility ratepayers may not.
Next is the impact on the climate.
According to the IEA, combusting one cubic foot of natural gas releases the equivalent of 60 grams of carbon dioxide into the atmosphere, including extraction, processing and distribution. The additional demand from data centers adds 1 million tons of greenhouse gas pollution each day. This represents about 12% of total U.S. greenhouse gas emissions today.
If you buy through links in our articles, we may earn a small commission. This does not affect editorial independence.
