There is rising global competition regarding artificial intelligence, and it’s essential that America takes the necessary steps to win – but that won’t happen without affordable, reliable energy to meet the enormous power demand that AI requires. While all forms of energy will be needed to meet growing demand, natural gas is uniquely positioned to meet the moment with an abundant, affordable, reliable, and clean energy source.
The rise of artificial intelligence is underway and its growth is driving “unprecedented” demand for electricity at a time when grid operators are warning about the impact of power plant closures. Americans deserve assurances that they will continue to have access to affordable and reliable energy. With investments in data center development set to top the $1 trillion mark by 2029, the AI sector should have great confidence turning to safe and reliable American producers to meet their prodigious energy needs – especially for natural gas.
Fueling Demand with Natural Gas
For the past two decades, the United States experienced stability and relatively flat growth in electricity consumption, with demand slowing in the 1990s and leveling off by the mid-2000s. But according to analysis from the Center for Strategic & International Studies (CSIS), we’ve entered a new era, one in which electricity load growth forecasts could double or triple. One of the major reasons for this nearly certain expansion in electricity is the rise of AI and the data centers it requires. Natural gas demand by the U.S. power sector is expected to increase 28% over current levels by 2030, driven by a 20% increase in demand from data centers. Recent studies have confirmed the role of natural gas in supporting growing electricity demand, finding that 60% of data center demand will be met by natural gas. AXPC’s chart below details some metrics on why this is the case:
This shift isn’t just a possibility – it’s already happening. A recent report from International Energy Agency, Electricity 2025, projects global electricity demand will grow by roughly 4% annually through 2027, the equivalent of adding an entire Japan’s worth of electricity consumption each year. Also, Goldman Sachs recently reported that AI will a drive 165% increase in data center power demand by 2030.
In response, U.S. electric utility providers are adding billions of dollars to their capital spending budgets to build new power supplies and bolster America’s electricity grid as data centers for AI and cloud computing drive up energy demand. Duke Energy has raised its five-year capital expenditure plan and utilities PPL, Exelon, Dominion, and AEP are following suit. Bill Fehrman, CEO of Ohio-based AEP, said these ramped up investments are proceeding “full speed ahead,” as the utility expects to add an additional $10 billion to a $54 billion capital expenditure plan. The chart below gives you an idea why companies are moving so swiftly as data center electricity demand is set to nearly triple by 2030:
Natural Gas is the Obvious Choice for Avoiding Grid Reliability Problems
Thanks to the hard work that American energy workers do every day, natural gas already generates about 43% of U.S. electricity – the largest of any resource used in the country. As the chart below shows, natural gas is critical in its unique ability to ramp up or down very quickly in order to meet electricity demand fluctuations over the course of a typical day. As more and more intermittent sources of energy have been added to the grid, it is increasingly important that natural gas provides baseload power to ensure reliability when intermittent sources are unavailable.
Natural Gas: A Key to Both Energy Affordability and Emissions Reductions
Natural gas role in the United States’ electric grid energy source mix cannot be understated. It’s a critical component in keeping energy affordable while also reducing emissions. The chart below compares the electric grid energy sources of two large states, Florida and California. From 2003-2022, Florida consistently added natural gas generation to their electricity grid mix – and as a result, household energy prices are half of California’s. Simultaneously, Florida has more than doubled California in emissions intensity reductions over that same time.
Real Reform Will Help America Win on AI
Energy demand is going up, and the need for natural gas is increasing as well. Because of this, AXPC is working to ensure policymakers in Washington – both in the Trump Administration and on both sides of the aisle in Congress – know the facts and are working to remove barriers to production, and pass meaningful, durable permitting reforms and sensible tax policies to encourage the investment in American energy production that is needed to ensure that America continues to lead on AI. There is no American AI without American energy—especially
