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Exxon Mobil and Chevron are jumping into the race to power artificial intelligence data centers, while two major oil companies are betting that technology companies will eventually turn to natural gas to meet their massive energy needs.
Exxon exposed plans this week to build a natural gas plant to power the data center. The oil chief says that he would then use it carbon capture and storage technology to reduce plant emissions by 90%.
“We are working with other major industrial manufacturers to rapidly deploy a solution that would provide high reliability and low power consumption to meet the increasing demand for computing power for artificial intelligence,” Exxon Chief Financial Officer Kathryn Mikells told Wall Street analysts on Wednesday. without revealing the names of the companies with which the oil company is working on the project.
The gas plant would not rely on the electric grid and would be independent of utilities, allowing for faster installation than traditional power generation projects, Mikells said. Exxon did not disclose the buyer or the project’s timeline.
Exxon has invested heavily in building a carbon capture network along the Gulf Coast with more than 900 miles of pipelines to transport CO2 from several industrial buyers to permanent storage sites. The oil major estimates that decarbonizing AI data centers could account for up to 20% of its total addressable carbon capture and storage market by 2050.
Chevron is also working on ways to power data centers, Jeff Gustavson, president of the oil company’s new energy business, said at the Reuters NEXT conference on Wednesday.
“This is something that our company is very well positioned to be a part of,” Gustavson said. Chevron is a major national gas producer with power generation equipment and very large tracts of land that could be used for data centers, the executive said.
Gas instead of nuclear
Alphabet, Amazon, Microsoft and Target they primarily bought wind and solar energy for their data centers as they strive to mitigate the climate impact of their operations. But needs power artificial intelligence is growing so much that technology companies are looking for sources of electricity that are more reliable than renewable energy.
As a consequence, technology companies have shown increasing interest in nuclear power. Microsoft helps bring The nuclear reactor on the Three Mile Island back to the grid by purchasing power from the plant. Amazon and Alphabet’s Google unit invest in new generation small nuclear reactors. Meta recently invited companies to send it proposals for the construction of new nuclear power plants.
But the fossil fuel industry and energy analysts have argued for months that the tech sector will ultimately have accept natural gas because nuclear power plants simply take too long to build.
Exxon CEO Darren Woods took a swing at nuclear power on Wednesday and argued that his company is better positioned than any other in the US to meet AI energy needs in the immediate and near term.
“If you’re betting on nuclear power and something that’s coming up, we’ve got a long way to go,” Woods told Wall Street analysts on Wednesday. The small nuclear reactors which technology companies invest in are not expected to reach commercialization until the 2030s.
Exxon does not want to start a power generation business, CEO said. The company plans to use its expertise leading large-scale projects to help install power generation for data centers in the early stages of scaling up AI, Woods said.
After the early ramp-up is complete, Exxon will focus on capturing and storing emissions associated with data centers and supplying decarbonized natural gas to AI-powered power plants, Woods said.
