US Data Centers Projected to Significantly Increase Natural Gas Consumption for Electricity
American data centers are projected to consume significantly more natural gas for electricity by 2035 due to the artificial intelligence boom, potentially surpassing the consumption of most countries. This increased demand is already straining the US power grid, notably in regions like Northern Virginia, and is expected to lead to higher electricity prices. Grid operators are warning of a shift towards managing electricity scarcity as data center load grows.
U.S. data centers are forecast to consume more natural gas for electricity than nearly every country globally, excluding China, Russia, and Iran, by 2035. This surge, driven by the artificial intelligence boom, is projected to increase natural gas consumption by 15 billion cubic feet per day, according to BloombergNEF, and represents more than double its December forecast. Natural gas is expected to provide 69% of the electricity for new grid-connected facilities.
Grid operators like PJM Interconnection and the North American Electric Reliability Corporation (NERC) are already grappling with rapidly rising electricity demand from data centers, warning of a shift from managing surplus to managing scarcity. Building new natural gas generation is a slow process, compounded by permitting and transmission constraints. For instance, the estimated cost of a transmission project serving Northern Virginia's data center industry nearly doubled, raising concerns about consumer costs. The construction of data centers continues despite these issues, with Meta launching a $115 million workforce program to train skilled trades for data center construction. The projected increase in demand is also expected to put upward pressure on natural gas and electricity prices, as producers may need to rely more on higher-cost drilling.