US data centers could consume more natural gas than Germany and Japan combined by 2035

Natural gas prices may increase due to data center demand, impacting electricity costs for consumers.

US data centers are projected to consume more natural gas than Germany and Japan combined by 2035, with new forecasts indicating a demand of approximately 18 billion cubic feet per day. This represents a doubling of previous predictions within nine months and positions data centers as the second-largest driver of natural gas demand growth, following LNG exports. A significant portion of this increase stems from tech giants like Meta, Microsoft, Google, and Amazon planning new natural gas power plants to bypass the grid, which alone could consume 2.9 to 3.4 billion cubic feet per day. However, grid-connected data centers are expected to drive even greater demand growth, potentially adding 15 billion cubic feet per day through the power sector. This surge in demand could lead to higher natural gas prices and a substantial increase in greenhouse gas emissions.

The escalating natural gas demand from data centers signals a potential shift in energy markets, with implications for pricing and availability. The sheer volume of projected consumption suggests that the energy sector may need to rapidly expand infrastructure, potentially creating new bottlenecks or driving innovation in gas supply chains. This dependence on natural gas also raises questions about the long-term sustainability of current data center expansion plans amidst climate concerns.

This trend highlights the growing tension between the exponential growth of AI and cloud computing and the finite resources and environmental impact of the energy required to power them. Companies relying on stable energy prices might face increased operational costs, while policymakers will grapple with balancing technological advancement against environmental commitments and energy security.