Stockholm (NordSIP) – The fossil fuel industry’s apparent efforts to hedge against the eventual reduction in global demand for oil and gas continue with the announcement by two US oil majors of plans to supply electricity to artificial intelligence (AI) data centres. Speaking in December 2024 at the Reuters NEXT conference in New York, Chevron New Energies President Jeff Gustavson said that the company believes that its experience in powering its own operations can be extended to meeting the needs of technology companies.
The precise impact on electricity demand of the upsurge in AI use is difficult to quantify, given the lack of granular data and the ongoing effect of efficiency gains. Nevertheless, in its 2024 Environmental Sustainability Report Microsoft revealed an almost 30% increase in greenhouse gas emissions over the course of 2023. This has largely been attributed to the tech giant’s multi-billion-dollar investment in AI. With Alphabet (Google), Meta (Facebook), and Amazon joining Microsoft in ploughing USD 150 billion into AI during 2023, the International Energy Agency (IEA) sees the new technology as a clear driver of projected growth in electricity consumption.
Both Chevron and ExxonMobil have announced plans to meet this demand with new gas-fired power plants coupled with carbon capture, use, and storage (CCUS) facilities. In presenting his company’s plans, Gustavson emphasised Chevron’s purported ability to provide customers with a low-carbon pathway via CCUS along with geothermal, baseload – presumably nuclear – and in his words: “Maybe some renewables.” Gustavson added that more information on the exact energy mix will be provided at a later date.
Electricity demand growth by end-use in the Stated Policies Scenario (STEPS) 2023-2030 (Source: IEA)
Although data centres’ share of total global energy consumption remains relatively low when compared with heavy industry, the building sector, electric vehicles, or air conditioning, they tend to be clustered in certain countries and regions where their impact is therefore much greater. For example, data centres account for 17% of Ireland’s electricity consumption. There are also clusters in various US regions, hence the heightened interest from fossil fuel companies to secure those technology companies as clients for natural gas-fired power.
The fossil fuel industry is keen to present Liquefied Natural Gas (LNG) as a low-carbon transition fuel. Although it does produce fewer carbon emissions than coal, such claims are seen as incompatible with international climate agreements and goals. Moreover, the effectiveness and economic viability of large-scale CCUS is far from being proven, with the IEA not considering it a core solution to GHG reduction efforts.
