AI proliferation depends on Permian Basin gas: Chevron CEO

US energy markets will need more Permian Basin gas to meet the electricity needs of data centers that power artificial intelligence, Chevron CEO Mike Wirth said Sept. 17 at a conference in Houston.

"Natural gas will help power the rapid growth of artificial intelligence with its insatiable demand for reliable electricity," Wirth said during a keynote address opening the annual Gastech conference. "[This] means AI's advance will depend not only on the design labs of Silicon Valley, but also on the gas fields of the Permian Basin," he said.

Data center demand

Upstream and midstream companies operating across all shale basins see immense growth potential in the expansion of data centers powering artificial intelligence. Some executives, including CEO Toby Rice of Appalachian producer EQT, have projected AI data center-related power demand to be a more promising and more firm demand source than LNG exports in years to come.

Demand from large industrial sources, including data centers, could mean that total US Lower 48 peak electricity demand needs could rise to 870 GW by 2030, up from about 800 GW in 2023, according to gas market analysts with S&P Global Commodity Insights.

"Growth in peak demand will result in a stronger call on gas-fired generators," the analysts said in a long-term North American market outlook updated in September.

The Permian has connectivity with some of the regions expected to see the largest shares of power demand growth driven by large industrial loads. The Electric Reliability Council of Texas, PJM Interconnection and Southeast are expected to account for three-quarters of the rise in peak power demand in 2035, Commodity Insights analysts estimated.

Others market analysts have identified some downside risks to bullish power demand growth estimates associated with data centers, including that innovation yields more-efficient data center operation and lower demand growth than forecasts assume.

LNG and AI

Global growth of AI presents new export opportunities for LNG companies, too, executives said during remarks at Gastech Sept. 17.

Jack Fusco, the CEO of Cheniere Energy, said 1 GW of load equates to about 1 million metric tons/year of LNG-fueled power generation.

"We do think it's going to be universal," Fusco said of power-demand growth related to data centers. "We don't think it's going to be all US-centric."