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Exxon Mobil and Chevron are entering the competitive landscape of energy provision for artificial intelligence (AI) data centers, aiming to meet the escalating energy demands of the technology sector through natural gas solutions.
This week, Exxon announced its intention to construct a natural gas facility tailored to power a data center, integrating carbon capture and storage (CCS) technology that could potentially reduce emissions by up to 90%. “We are collaborating with various large-scale industrial partners to swiftly implement a solution that ensures both high reliability and low carbon intensity to fulfill the surging demands for computational power required by AI,” shared Exxon’s Chief Financial Officer, Kathryn Mikells, during a presentation to Wall Street analysts, though she did not reveal the identities of the collaborating companies.
The proposed gas plant is designed to operate independently of the electric grid, allowing for quicker implementation than conventional energy projects. However, Exxon has yet to announce specific customers or a timeline for the initiative.
Exxon has already made significant investments in developing a comprehensive carbon capture infrastructure along the Gulf Coast, featuring over 900 miles of pipeline dedicated to transporting carbon dioxide from various industrial clients to secure storage facilities. The company projects that decarbonizing AI data centers could account for as much as 20% of its total addressable market for carbon capture and storage by the year 2050.
Chevron is also exploring options to power data centers. At the Reuters NEXT conference, Jeff Gustavson, president of Chevron’s new energy division, remarked, “Our company is well-positioned to take part in this market.” He noted that Chevron’s status as a significant natural gas producer, along with its power generation capabilities and extensive land holdings, provides a solid foundation for entering the data center energy sector.
Preferred Energy Sources: Gas versus Nuclear
Major technology firms like Alphabet, Amazon, Microsoft, and Meta have predominantly invested in wind and solar energy for their data centers to mitigate their environmental impact. Nevertheless, the soaring power requirements for AI have prompted these companies to seek more dependable energy sources.
This trend has led to increased interest in nuclear energy among tech companies. For instance, Microsoft is assisting in the revival of the Three Mile Island nuclear plant by purchasing energy from it. Similarly, Amazon and Google’s parent company, Alphabet, are investing in advanced small modular reactors, while Meta has solicited proposals for the development of new nuclear facilities.
Despite this growing enthusiasm for nuclear options, industry experts maintain that the tech sector will likely have to pivot towards natural gas, given the lengthy timelines associated with nuclear plant construction. Exxon’s CEO, Darren Woods, expressed skepticism about nuclear energy during a presentation, asserting that his company is exceptionally well-equipped to satisfy the immediate energy requirements of AI.
“If you’re relying on nuclear as a future solution, the timeline to realization is extensive,” stated Woods. He further emphasized that the small modular reactors currently being explored are not anticipated to be operational before the 2030s.
While Woods clarified that Exxon does not aim to enter the power generation market, he indicated that the company intends to leverage its project management expertise to facilitate the establishment of energy sources for data centers during the AI development phase. Once initial operations are underway, Exxon plans to concentrate on capturing and storing emissions linked to data centers and providing decarbonized natural gas to the power facilities that support AI systems.
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