WIRED reported that Williams and Chevron, two American oil and gas companies, are presenting data-center demand to investors as a huge win. The AI boom is giving fossil fuel companies a new industry to sell their gas, pipelines, and power plants to, even as oil giants post billions of dollars in quarterly profits boosted largely by the soaring price of oil thanks to the conflict in the Middle East.
Data Centers Become a Demand Driver
According to WIRED, Ashish Sethia, global head of commodities and energy at BloombergNEF, said data centers are becoming "a big driver for both power and gas demand in the US." A BloombergNEF report published last week found that increased natural gas demand by the mid-2030s, driven partly by data centers, means the US would need to increase production by 36 percent.
Williams' Behind-the-Meter Buildout
WIRED detailed that Williams, one of the biggest oil and gas infrastructure companies in the US, is building six behind-the-meter gas plants for data centers across the country, including four serving Meta data centers in Ohio. (Meta declined to comment.) The largest behind-the-meter gas power plant Williams is building for Meta in Ohio is just under 700 megawatts.
The company is also building a 9-mile natural gas pipeline across an Ohio suburb. Williams executives envision the pipeline serving not only its power plants for Meta but also supplying natural gas to the growing number of data centers in that region. On a May earnings call, Williams president Chad Zamarin said the company "overbuilt the capacity" of a pipeline serving one of its Meta-affiliated power plants to "be an energy artery along which other projects could be developed." Last year, Williams announced it would build a power plant and associated pipeline infrastructure in Ohio solely for use by a data center, according to WIRED.
Emissions Permits and Actual Output
According to WIRED, five of the seven data-center-connected gas-fired power plants highlighted in the two companies' second-quarter results could emit as much as 21 million tons of greenhouse gases per year, according to their permit applications. That amount is roughly on par with the annual emissions of Guatemala, though the actual emissions may be lower than what's on the permits.
Williams' four power plants that have filed permit applications could emit up to 9.6 million tons of greenhouse gases per year, which the EPA says is equivalent to the emissions from more than 22 average natural gas plants. Williams spokesperson Alex Schott told WIRED in an email that the facilities are "designed to operate well below permitted limits" and comply with state air requirements. Schott said the company's modeling puts actual emissions from these plants at "potentially" two-thirds less than what's on the permits.
Investment and Future Growth
WIRED reported that in mid-July, Williams announced more than $5 billion in investments for its data center ventures, including money from private equity giant KKR. Executives from both Williams and Chevron said on earnings calls that they expect to expand on facilities they are building now for the data center industry for years to come.
Lukas Shankar-Ross, deputy director at Friends of the Earth, an environmental nonprofit, said of the alliance:
The frightening thing about the tech and oil alliance is that this is a lifeline to an industry that we need to be phasing out.
| Metric | Figure | Source |
|---|---|---|
| US gas production increase needed by mid-2030s | 36% | BloombergNEF |
| Potential annual GHG emissions from five plants in Q2 results | 21 million tons | Permit applications |
| Potential annual GHG emissions from Williams' four plants | 9.6 million tons | Williams permit applications |
| EPA-equivalent natural gas plants | More than 22 | EPA |
| Williams' investment in data center ventures | More than $5 billion | Williams |
| Largest Meta behind-the-meter plant in Ohio | Just under 700 MW | Williams |
The projects underscore how data-center demand is reshaping US energy infrastructure, with Williams committing more than $5 billion and KKR backing its data-center ventures, according to WIRED. While Schott said actual emissions could be two-thirds below permit limits, the permit applications alone put Williams' four Ohio-area plants on par with more than 22 average natural gas plants, WIRED reported. Williams' decision to overbuild pipeline capacity in Ohio, as described by Zamarin, points to further data-center growth in the region, WIRED reported.
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