Two US Fossil Fuel Giants Double Down on Data Center Power
Williams and Chevron are investing heavily in natural gas plants and pipelines to power data centers, a move that could lock in fossil fuel use for decades. Analysts warn the trend may delay the renewable transition while meeting AI's growing electricity demand.
The rapid growth of artificial intelligence is opening a new market for fossil fuel companies in the United States. Energy giants Williams and Chevron are investing heavily in natural gas infrastructure to power data centers, describing the demand as a major opportunity for investors.
BloombergNEF estimates that US natural gas production may need to rise by 36 percent by the mid-2030s, partly because of data centers. Yet the environmental cost could be substantial: permit applications for five of seven gas-fired plants linked to data centers in these companies’ quarterly results show they could release up to 21 million tons of greenhouse gases annually, comparable to Guatemala’s yearly emissions. Actual output might be lower.
Williams, a major pipeline operator, is building six behind-the-meter gas plants for data centers, including four serving Meta facilities in Ohio. In July it announced more than $5 billion in investments for these ventures, with private equity firm KKR also involved. Four Williams plants that have filed permits could emit up to 9.6 million tons of greenhouse gases per year, according to their applications. The company is also constructing a 9-mile pipeline across an Ohio suburb and hopes it will become an energy corridor attracting additional data centers.
Chevron has taken an even bigger step. It is developing a 2.67-gigawatt gas power plant for a Microsoft data center in Texas — the largest project of its kind. The two companies signed a 20-year power purchase agreement in June. The plant’s permit allows for more than 11.5 million tons of carbon-dioxide-equivalent emissions a year. Chevron executives say the project can be replicated and that they are already talking to other potential customers.
Environmental groups warn that this fossil fuel expansion could slow the renewable energy transition. Because gas plants are long-lived assets, they may lock in dependence on natural gas for decades, even if future administrations change policy. It also remains unclear whether these plants will ever be connected to the national grid, a decision that could affect power prices across the country.
