Artificial intelligence's energy demands could reportedly go beyond current renewable sources of electricity consumption. Predictions from experts say that natural gas producers must come in play to meet this demand.
Richard Kinder, executive chairman of pipeline operator Kinder Morgan, says big tech is the primary driver behind these data centers, and he believes corporations are beginning to recognize the value of natural gas and nuclear power.
Kinder Morgan is the largest operator of natural gas pipelines in the US, accounting for 40% of the market.
A Wells Fargo projection from April states that after ten years of sluggish power growth in the US, electricity demand is predicted to rise by up to 20% by 2030.
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Since the development of AI aligns with the growth of domestic semiconductor and battery manufacture, the electrification of the country's vehicle fleet, and other factors, power firms are taking swift action to secure energy.
Wells Fargo reportedly projects that by 2030, the U.S. will need around 323 terawatt-hours more electricity due to AI data centers. Seven times as much power is predicted to be required by AI alone than from the 48 terawatt hours of electricity that New York City currently uses annually.
By the end of the decade, data centers are expected to account for 8% of all electricity consumed in the United States, according to Goldman Sachs.
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Natural Gas and AI Demands
According to CNBC, an April analysis by Goldman Sachs says that natural gas is predicted to cover 60% of the increase in power demand from data centers and AI, with renewable energy sources providing the remaining 40%.
The same article states that, as per Wells Fargo, there might be a daily rise of 10 billion cubic feet in gas demand by 2030.
This would be a 10% increase over the country's overall gas consumption of 100 bcf/d and a 28% increase over the 35 bcf/d now used for electricity generation in the United States.
This, according to equity analyst and Wells Fargo report co-author Roger Read, is one of the primary causes of the growing optimism about gas prices. He continues that for a commodity, those are some "pretty high growth rates."
However, the demand estimates differ since analysts are still piecing together the potential impact of data centers on natural gas prices.
While Houston-based investment bank Tudor, Pickering, Holt & Co. predicts a base case of 2.7 bcf/d and a high case of 8.5 bcf/d, Goldman anticipates a 3.3 bcf/d growth in gas demand.
Underestimated AI Energy Demands
The natural gas forecasts follow just a few months after global cloud computing provider CoreWeave claimed that artificial intelligence's demand for more computing power, data centers, and electricity is currently "underestimated." This is an underestimate that will ultimately lead to strain and limitations on the global power grid system.
Brian Venturo, a co-founder of CoreWeave, made the prediction. He says the requests CoreWeave gets on a daily basis from data centers are "absurd," with some asking for entire campuses.
The co-founder claims that supply networks, which have historically supported very physical firms, are ill-equipped to keep up with the rapid pace of the market. He thinks that when there are more "megacampuses," there will be more strain on the electrical system and political unrest.
The demand for data centers is increasing due to the rise in generative AI, which makes Roseland, New Jersey-based CoreWeave one of the most exciting IT companies.
The infrastructure required to fulfill the demand bothers Venturo, who said, "It worries me." Venturo likened the power requirement of AI to a sprint that requires all the money in the world.
He goes on to say that another factor in increasing demand for new data centers is the challenge of updating outdated ones. These kinds of expansions are not possible with the data centers' existing infrastructure.
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