US data centres are projected to consume more natural gas than Germany and Japan combined by 2035, according to a new report from BloombergNEF. The facilities could consume about 18 billion cubic feet per day, nearly double the amount the organisation predicted just nine months ago.
Over the next decade, data centres are expected to be the second-strongest driver of natural gas demand growth after LNG exports. The forecast takes into account that not all announced data centre projects will be completed.
Data centres that produce power on site have drawn attention in recent months, with Meta, Microsoft, Google and Amazon all announcing plans for new natural gas power plants that will bypass the grid. BloombergNEF projects such projects will consume 2.9 billion to 3.4 billion cubic feet per day by 2035 — about as much as all data centres consume today, including natural gas used to generate power for the grid.
But on-site-powered data centres could represent just a fraction of overall demand growth. By the middle of the next decade, grid-connected data centres are predicted to drive an additional 15 billion cubic feet per day of natural gas consumption by the power sector — five times more demand growth through 2035 than from all other grid-connected sectors combined.
If that demand growth materialises, it could nudge natural gas prices higher. Analysts at Noreva think the combined impact of the data centre boom and rising LNG exports could cause prices to soar, and that utility ratepayers might not be able to bear a surge even if tech companies' balance sheets can.
Burning one cubic foot of natural gas releases the equivalent of 60 grams of carbon dioxide into the atmosphere, including extraction, processing and distribution, according to the IEA. The additional demand from data centres will generate 1 million metric tons more greenhouse gas pollution daily, about 12% of total US greenhouse gas emissions today.