Energy
Monday, May 6th, 2024 4:56 pm EDT
Key Points
- Chevron CEO Mike Wirth predicts a surge in natural gas demand driven by increasing electricity consumption, particularly from artificial intelligence (AI) and data centers.
- The move to electrify various sectors such as vehicles, heating, and manufacturing, along with the rise in demand from data centers, will necessitate reliable and affordable backup power generation.
- While wind and solar power offer affordability, they face challenges in meeting peak demand due to variable weather conditions, highlighting natural gas as a key source for reliable baseload supply amidst the phase-out of coal plants and the expense of nuclear power.
Chevron CEO Mike Wirth anticipates a surge in natural gas demand driven by increasing electricity consumption, particularly from artificial intelligence (AI) and data centers. Wirth emphasizes the need for reliable and affordable backup power generation to support the electrification of various sectors such as vehicles, heating, and manufacturing. While wind and solar power offer affordability, their reliance on variable weather conditions poses challenges in meeting peak demand. Wirth highlights the continuous operation of data centers, underscoring the importance of natural gas in providing baseload supply. With coal plants being phased out and nuclear power being expensive, Wirth views natural gas as the most viable option for reliable baseload supply. Research suggests that electricity demand in the U.S. could surge by up to 20% by 2030, leading to a significant increase in natural gas demand. Goldman Sachs forecasts that natural gas will cater to 60% of the new electricity demand from data centers, positioning natural gas pipeline operators and producers like Kinder Morgan, Williams Companies, and EQT Corp to benefit from this trend.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/05/06/chevron-ceo-says-natural-gas-demand-will-outpace-expectations.html
