[energyintel.com] A data center boom in the US is straining the grid and pushing up energy costs. Meeting demand will require every available resource, but one solution lies in wasted natural gas. Capturing fugitive methane could supply an important part of the new demand, cut emissions, and support energy security.
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The US is facing a looming energy crunch — and it is already affecting electricity prices. Massive new data centers, which support cloud computing operations and the development of new artificial intelligence technologies, are rapidly increasing their electricity consumption.
The scale of the expansion is staggering. According to projections from the Lawrence Berkeley National Lab, electricity consumption by data centers could jump by roughly 150-400 terawatt hours per year by 2028.
For scale, 150 TWh is more electricity than all the power plants in the state of New York generate in a year, according to data from the US Energy Information Administration. On the high end, 400 TWh is more than the combined annual generation of Washington state, Oregon and California.
Searching for Power Sources
In other words, by 2028, the US potentially needs to add another New York or another West Coast worth of electricity just to support the expansion of data centers — and it’s likely that electricity demand from US households and businesses outside of the technology sector will increase, too.
There is no single energy source that can tackle this challenge alone. Data center developers and utility companies recognize this. They are pursuing as many options as they can find, including wind turbines, solar panels, battery storage, nuclear power and advanced geothermal power plants on the generation side — and sophisticated operations and demand-side measures as well.
Power plants that run on natural gas are also leading contenders — especially in the short term. But keeping up with the demand for natural gas from data centers, residential customers, commercial and industrial users and export markets will be a challenge.
Tapping Wasted Gas
This is where wasted natural gas — in the form of so-called fugitive methane emissions — could play a critical role in supporting the expansion of US data centers while potentially putting downward pressure on domestic energy prices.
Every year, US oil and natural gas supply chains release somewhere between 7.6 million and 16.1 million metric tons of methane, according to emissions inventory data from the US Environmental Protection Agency and the International Energy Agency. All of that fugitive methane amounts to somewhere between 1 billion-2 billion cubic feet per day of wasted natural gas.
That’s a large amount of untapped energy. On the low end, it’s roughly equal to the natural gas output of the state of Alaska. On the high end, it exceeds production levels in the federal waters of the US Gulf.
In the context of data centers, extra natural gas volumes of between 1 Bcf-2 Bcf/d could cover a significant fraction of the sector’s anticipated growth over the next few years — especially if coupled with smart operations and demand-side measures.
According to S&P Global, data centers will likely need between 3 Bcf-6 Bcf/d of additional natural gas by 2030. Meeting roughly one-third of that additional energy demand with natural gas that’s already being produced, but being released into the atmosphere for free, just makes good sense.
Making the nation’s oil and natural gas infrastructure as efficient as possible will help limit the bottlenecks and other supply constraints that drive up energy prices for all consumers, including residential households.
The technologies to eliminate natural gas waste are relatively straightforward and already in use across the industry. They include low- and zero-emission pneumatic controllers, vapor-recovery units and autonomous systems that can detect potential methane releases in real time, throttle back production to limit the size of those releases and alert field crews to investigate and make any needed repairs.
The more complicated issue is detecting fugitive methane emissions across the nation’s sprawling energy infrastructure so they can be captured and sold in the form of natural gas.
But there have been major breakthroughs on that front — and more are coming.
University research labs, innovative technology vendors, energy producers and environmental regulatory agencies are using drone flights, aircraft surveys, satellite data, ground-level monitors and cutting-edge data science to find, measure and fix methane leaks.
Methane Capture Meets AI
But the burgeoning US AI sector could play a pivotal role in taking the field of methane capture and natural gas waste reduction to the next level.
In partnership with energy producers, monitoring and measurement experts, and government regulators at the state and federal level, the developers of large data centers could prioritize the use of gas that’s produced with the lowest possible fugitive emissions.
Given the scale of data-center demand, this would create a powerful new economic incentive for bigger, more ambitious efforts to find and eliminate waste across the natural gas sector — including investments in improved pipeline infrastructure to move the gas from where it’s captured to where it’s needed.
Denver-based data center developer Crusoe has blazed a trail in this space. But scaling up methane capture efforts to ease the looming energy crunch for the tech sector — and the US as a whole — will require the engagement of many more AI leaders.
Unlocking a significant source of additional supply in a tight energy market wouldn’t be the only benefit. It would also limit emissions of a powerful greenhouse gas, because methane has a much higher global warming potential than carbon dioxide.
Worldwide, eliminating fugitive methane emissions of oil and gas supply chains would be the climate equivalent of converting every car and truck in the world to an electric powertrain and running all of those vehicles on zero-emission power sources, according to the Energy Emissions and Modeling and Data Lab.
As a general rule, limiting natural gas waste was always a good idea, for both economic and environmental reasons. But today, as the US strives to win the global AI race, the case for turning this wasted energy into a new energy resource has never been stronger.
Morgan Bazilian is the director of the Payne Institute for Public Policy at the Colorado School of Mines. Greg Clough is the institute’s deputy director. Simon Lomax leads the Payne Institute’s Accelerated Methane Reduction Initiative. The views expressed in this article are those of the authors.
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