NatGas to power all the US AI Data Centers?
You might have read my recent post about AI taking out all humanity. Well, I believe we have more road to travel before that happens. And to properly fuel these AI data centers we need a clean reliable fuel. The amount of pushback from communities large and small wanting the data centers to pay their own way will only grow! Here's how I see this playing out.
Natural Gas (AKA NatGas) is the way and should satisfy both sides of the debate!
The USA has benefited from 20+ year Shale Oil Bonanza
NatGas is inexpensive and clean energy source which comes from right here in the good ole USA. The NatGas pipelines are already in-place to allow easy transport for most of the continental US. Here is a breakdown of the top NatGas producing states and the formations they draw the reserves from:
1 The NatGas power house Texas, draws from the Permian Basin. So Texas is rich in Oil and NatGas!
#2 Pennsylvania draws from both the Marcellus and Utica shale formations
#3 New Mexico draws from San Juan Basin (northwest) and the Mancos/Gallup formations
#4 Louisiana draws off Haynesville Shale is technically located in eastern Texas and north Louisiana
#5 West Virginia also draws from both the Marcellus and Utica shale formations. Additionally, they draw from and the shallower Devonian (Ohio) Shale,.
#6 Alaska draws specifically from the Colville Basin. You might know it as the North Slope or Cook inlet.
#7 Oklahoma draws from three (3) Anadarko Basin, Arkoma Basin, and Cherokee Platform.
There are other top producing states but you get the picture NatGas formations are here in America and might just be THE best untapped resource for the AI race.
US supplies of NatGas
2025 estimates of proved shale reserves alone are only about 11–12 years of current production. This does not mean the US will run out of NatGas in 11-years. As the US has technically recoverable resources for 86-years. One should assume continued technological advances to ensure all that gas can be retrieved and thus burned
Large scale generators
Already primarily utilize combined-cycle gas turbine (CCGT) technology, which combines a gas turbine with a steam turbine to achieve high efficiency. Collectively, natural gas generators account for thelargest share of U.S. electricity generation capacity, surpassing other sources like coal and nuclear.
From a financial lens
NatGas pricing is a cyclical commodity. Which makes me wonder will the data center demand be large and constant enough to create a floor price in NatGas? Would that be $3, $4 or $5 floor price? Would that change NatGas nick-name from 'The Widow Maker' to the millionaire maker?
Summary
The US has already been benefiting from US shale production. I hope the data center teams are reading this blog and learn how beneficial NatGas will be for continued growth of their industry. The US needs to continue to develop and enhance NatGas recovery methods to ensure we power our Nation beyond 2050!
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