Natural gas demand could exceed expectations as power consumption by artificial intelligence and data centers surges, Chevron CEO Mike Wirth told CNBC on Monday.
“It’s a little hard to quantify right now because things are moving so fast in terms of artificial intelligence,” Wirth told CNBC’s Sara Eisen at the Milken Institute Global Conference in Los Angeles. “But I think the demand for natural gas will probably be higher than people have been to date. estimate.”
Voss said the electrification of the nation’s fleet, heating and manufacturing, as well as increased demand for data centers, will require reliable and affordable backup generation.
Wind and solar power provide affordable power in some areas but still face challenges in generating enough power to meet peak demand because they rely on variable weather conditions, Chevron’s chief executive said.
“When the sun goes down, the data center doesn’t shut down,” Voss said. “We need to have the ability to provide baseload supply for all of that demand. I think natural gas is going to be a big part of that equation going forward.”
The United States is phasing out coal-fired power plants, nuclear power is expensive and geothermal energy is not as proven as other energy sources, Voss said. “Natural gas is the most likely source of reliable baseload supply,” the CEO said.
Research released by Wells Fargo in April showed that U.S. electricity demand is expected to surge by 20% by 2030. Natural gas demand could increase by 10 billion cubic feet per day (bcf/d) by the end of the century, Wells said. To put this into perspective, current electricity generation consumption in the United States is 35 bcf/d and total consumption is 100 bcf/d.
Goldman Sachs predicts that natural gas will meet 60% of new data center power needs, while renewable energy will provide 40%.The investment bank said natural gas pipeline operators such as children morgan, williams & co. and producer EQT Group Stand up and benefit.
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