By 2035, U.S. data centers are projected to consume more natural gas than Germany and Japan combined, driven by a surge in energy demand from artificial intelligence infrastructure, according to a report published by BloombergNEF.
The rapid expansion of artificial intelligence technology could push American data centers to become one of the largest consumers of natural gas globally. According to BloombergNEF, these facilities are expected to consume about 18 billion cubic feet of natural gas per day, representing nearly double the volume the organization predicted just nine months prior. This updated forecast accounts for the expectation that not all announced data center construction projects will reach completion.
On-Site Generation Bypasses the Power Grid
Major technology companies are increasingly taking energy production into their own hands to circumvent strained public utility grids. Meta, Microsoft, Google, and Amazon have all announced initiatives to build dedicated natural gas power plants that operate off-grid, according to BloombergNEF data. These specific on-site projects are projected to consume between 2.9 billion and 3.4 billion cubic feet of natural gas per day by 2035—roughly equivalent to the total amount currently consumed by all U.S. data centers today.
Despite the high profile of these private energy installations, on-site generation will account for only a fraction of total consumption growth. Grid-connected data centers are expected to drive an additional 15 billion cubic feet per day of natural gas consumption by the power sector by the middle of the next decade, according to BloombergNEF. That trajectory means data center demand growth through 2035 will outpace all other grid-connected sectors combined by a factor of five.
Market and Environmental Pressures
The projected demand surge threatens to upend historically stable natural gas prices. Much of the current data center construction relies on stable fuel costs that have prevailed in recent years. However, analysts at Noreva warn that the combined forces of the data center buildout and rising liquefied natural gas exports could cause prices to spike significantly, potentially straining utility ratepayers even if tech balance sheets absorb the costs.
The environmental footprint is scaling in parallel with consumption. The International Energy Agency calculates that burning one cubic foot of natural gas releases the equivalent of 60 grams of carbon dioxide, factoring in extraction, processing, and distribution. The additional demand from data centers will generate an estimated one million metric tons of extra greenhouse gas pollution daily, accounting for approximately 12 percent of total U.S. greenhouse gas emissions today.
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