ExxonMobil, Chevron to build natural gas-fueled power plants to power Big Tech’s AI data centers

12/14/2024 / By Arsenio Toledo

ExxonMobil and Chevron are exploring opportunities to provide power to meet the growing demand from energy-intensive AI data centers.
Both companies are planning to build massive natural gas-fired power plants.
The entry of ExxonMobil and Chevron into the power generation industry is driven by Big Tech’s rising appetite for electricity due to its emerging AI and other high-tech industries.
Projections indicate that the emergence of AI data centers could make U.S. electricity demand in 2025 surge following two decades of stagnation.

ExxonMobil and Chevron, two of the United States’ largest oil and gas companies, are exploring opportunities to enter the power generation business as Big Tech is looking for electricity suppliers for its growing number of energy-intensive data centers.

Both companies are considering leveraging natural gas-fired power plants equipped with carbon capture technology to meet the growing demand for low-carbon electricity.

ExxonMobil announced on Dec. 11 that it is designing a “massive” natural gas-fired power plant with a generating capacity of over 1,500 megawatts. ExxonMobil claims its facility, which would be dedicated to powering data centers, will capture more than 90 percent of its carbon dioxide emissions. The company emphasized that the project aims to address the short-term need for reliable electricity while minimizing emissions.

“There are very few opportunities in the short term to power those data centers and do it in a way that at the same time minimizes, if not completely eliminates, the emissions,” said ExxonMobil CEO Darren Woods.

The company has secured land for the facility but has not disclosed its location or cost. ExxonMobil plans to operate the plant independently of the power grid, which could expedite the permitting and construction process. The plant is expected to be operational within the next five years. This would mark ExxonMobil’s first foray into power generation for external customers, as its previous gas-fired plants were built to serve its own operations.

Chevron, meanwhile, has been in discussions for over a year about supplying natural gas-fired power, coupled with carbon capture technologies, to data centers.

Jeff Gustavson, president of subsidiary Chevron New Energies, confirmed the company’s interest in the sector during an interview.

Gustavson highlighted Chevron’s experience in natural gas supply and power equipment operations as key advantages in meeting the growing demand for electricity from data centers.

“It fits many of our capabilities – natural gas, construction, operations, and being able to provide customers with a low-carbon pathway on power through CCUS (carbon capture, utilization and storage), geothermal, and maybe some other technologies,” said Gustavson.

Big Oil’s entry into power generation driven by demand to accommodate AI

Both companies are entering the power market amid a surge in electricity demand driven by the growth of artificial intelligence (AI) and other high-tech industries.

Projections indicate that U.S. electricity demand could reach record highs by 2025, following two decades of stagnation. The urgency to meet this demand has prompted the power industry to invest in new natural gas infrastructure and delay the retirement of fossil-fuel power plants. Natural gas has emerged as a leading option for providing round-the-clock electricity, given its lower cost compared to other sources.

ExxonMobil has also been working with tech giant Intel to develop new liquid cooling technologies for data centers. The partnership aims to design energy-efficient cooling solutions that could reduce emissions and improve operational efficiency. The company has committed $30 billion over the next few years to these efforts, in addition to its plans to increase oil and gas production by 18 percent by 2030.

Chevron, similarly, is leveraging its expertise in natural gas and carbon capture to explore opportunities in the power generation sector. The company’s entry into the market would mark a significant shift from its traditional focus on oil and gas production.

Watch this clip from CNBC discussing how the construction of new AI data centers all over the world is fueling a boom in cooling technology to help prevent these data centers from overheating.

This video is from the TrendingNews channel on Brighteon.com.