US Natural Gas Prices Could Triple as AI Data Centers Fuel Demand
Natural gas prices in the US could triple in the coming years due to increased demand from AI data centers, according to a new report from energy research firm Noreva. The company's CEO, Peter Gardett, warns that investors have been too complacent about rising gas prices and that basic supply-and-demand dynamics point toward a significantly tighter market.
The major hyperscalers, including Meta, Microsoft, Google, and Amazon, are building massive natural gas power plants in Texas and Louisiana to support their AI data center operations. These facilities will require significant amounts of fuel, which could lead to higher operating costs for data centers if natural gas prices increase as projected.
Noreva projects that natural gas prices could exceed $10 per million BTUs in certain regions, up from the current range of roughly $2 to $4.50. This would represent a substantial price increase, particularly since fuel costs make up about half of large-scale electricity generation expenses.