Ascent Resources

When AI Conversations Reach the Gas Fields

I’m returning home to Oklahoma City from 3 days of meetings about natural gas in Ohio, Pennsylvania and West Virginia. These states are home to the prolific gas producing formations called the Utica Shale and the Marcellus Shale. Some of the discussions were routine, just making sure things are on track for day-to-day operations and baseline near-term development. Increasingly though, conversations include AI and data centers and how they will impact the future of natural gas.

As I write this, I’m 30,000 above Nebraska. I’m typing on my phone and automatically saving to the cloud via the in-flight Wi-Fi. When I get ready to do my final edits, I will open up Word on my laptop and it will all be there, seamlessly. A little message sits between my words and the virtual keyboard, encouraging me to try editing with Microsoft’s Copilot AI tool. (I dismiss it.)

I’m reminded that between cloud computing and basic internet- not to mention the AI we currently have-we are already heavily dependent on data centers. There is a huge push across the United States and throughout much of the world to develop the next generation of data centers, which will make the next generation of AI development possible. These new data centers are envisioned as much larger and requiring much more electrical power than what has been built in the past. Power demand is one of the concerns often raised in communities near proposed data center sites. It raises questions like “Will I be able to get as much electricity as I need?” and “What will this do to my power bill”. Because the power demand is so large and to address these concerns, data centers are increasingly designed to provide their own power generation to avoid creating problems with existing power grids.

Data centers can be built to generate their own electricity, but they can’t generate it from nothing.

Why Data Centers Are Turning to Gas

And that is where natural gas comes in. Data centers can be built to generate their own electricity, but they can’t generate it from nothing. Many of the developers putting together data center proposals to pitch to the big tech companies have settled on natural gas-fueled turbines to generate their electricity. It’s a wellestablished technology that can be deployed relatively quickly. They’ve placed orders to secure turbines and many are now looking to secure the gas.

The long queue of natural gas turbine orders and ongoing discussions around gas supply for data centers give reason to believe that natural gas demand could rise substantially in the coming years. This could drive new investment in drilling, processing and transporting natural gas to the data centers.

The Variables behind Future Gas Demand

While growth in natural gas demand is likely, the degree to which it materializes may be limited by factors such as public or regulatory resistance to data center development. It is also possible that advances in AI chip technology will make data centers more energy efficient and not quite as thirsty for electricity. Uncertainties around long-term natural gas pricing could also limit data centers’ willingness to commit to natural gas as their long-term fuel of choice.

Data centers are already a big part of our daily lives. Natural gas is already a significant source of the energy used to power them. It will be interesting to watch the developing relationship between these two industries as AI technologies advance the need for data centers continues to increase.