AI boom is driving a surprise resurgence of U.S. gas-fired power
Energy companies in the United States are planning new natural gas-fired power generation at the fastest pace in years, a signal that fossil fuels are likely to have a longer runway than once thought.
From Florida to Oregon, utilities are racing to meet a surge in demand from AI data centers, manufacturing facilities and electric vehicles. The staying power of gas, which in 2016 overtook coal as the No. 1 U.S. source of electricity, has surprised some experts who not so long ago had projected the era of domestic demand growth for the fuel might soon come to an end.
“A few years ago, there was the expectation that solar and wind would be able to solve our additional generation needs,” said Jed Dorsheimer, group head of the energy and sustainability sector at investment bank William Blair. Dorsheimer now sees gas accounting for as much as 60% of new generation. “There’s been a call for peak oil and peak gas, and eventually those calls will be right.”
The prolonged reign of natural gas will bring major environmental consequences, though both sides dispute in which direction. On one hand, the abundance of cheap U.S. gas from fracking has hastened the decline of coal, with its weighty carbon footprint.
