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The energy strategy that seeks to transform the future of AI.
The energy needs of artificial intelligence (AI) are increasing and the technology sector is looking for more reliable energy sources.
In this context, Exxon Mobil and Chevron have decided to take advantage of the opportunity to position themselves as the main energy suppliers for AI data centers. Both oil companies are betting on natural gas as the ideal solution to satisfy this growing demand.
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Exxon Mobil presents its natural gas plant for data centers
Exxon Mobil announced this week the construction of a natural gas plant that will power artificial intelligence data centers. The company plans to reduce the project’s carbon emissions by 90% through the use of advanced carbon capture and storage (CCS) technologies.
“We work with large industrial companies to deliver a reliable, low-carbon energy solution,” said Kathryn Mikells, Exxon’s chief financial officer, during a presentation to Wall Street analysts. Without revealing the names of its business partners, Mikells stressed that the plant will operate independently of the electrical grid. This autonomy will allow it to be installed faster than conventional energy generation projects.
Exxon has also invested in a carbon capture network that stretches along the US Gulf Coast. This network includes more than 1,448 kilometers of pipelines that transport CO2 from industrial customers to permanent storage sites.
The company estimates that decarbonizing AI data centers could account for up to 20% of its addressable market for carbon capture and storage services by 2050.
Image of a marine oil plant. Source: The Economist
Chevron also enters the energy game for AI
Not only Exxon is moving chips in this new market. Chevron is also exploring ways to power AI data centers. Jeff Gustavson, president of Chevron’s new energy unit, explained that the company is well positioned to participate in this initiative.
“We are a major producer of natural gas, we have power generation equipment and we have large tracts of land that could be used for data centers,” Gustavson said during the Reuters NEXT conference. With this infrastructure, Chevron seeks to leverage its experience in the industry to become a key partner of large technology companies.
The dilemma between natural gas and nuclear energy
Technology companies such as Alphabet, Amazon, Microsoft and Meta have mainly opted for wind and solar energy for their data centers. However, the growing demand for AI-generated energy is driving these companies to look for more stable alternatives. In response, some technology companies have shown growing interest in nuclear energy.
Microsoft, for example, is helping to restart the Three Mile Island nuclear reactor by purchasing power from the plant. Amazon and Alphabet’s Google unit are investing in next-generation small nuclear reactors, while Meta has requested proposals for building new nuclear plants.
However, the fossil fuel industry and energy analysts argue that the technology sector will eventually have to adopt natural gas. They argue that building nuclear plants takes too long. The small nuclear reactors that the technologies promise are not expected to be commercially available until the 2030s.
Exxon confident in its competitive advantage
Exxon CEO Darren Woods said his company is better positioned than any other company in the United States to meet AI’s immediate and future energy needs. During his speech before Wall Street analysts, Woods criticized the technology companies’ commitment to nuclear energy, calling it an option with “a long way to go.”
“If you’re going for nuclear power, there’s a long way to go,” Woods said. Exxon is not looking to become a power generation company, he explained, but it does want to use its experience in large projects to install power generation capacity for data centers during the early stages of AI expansion.
Once this initial phase is complete, Exxon will focus on capturing and storing emissions associated with data centers. It also plans to supply decarbonized natural gas to power plants that power AI, securing its position as a key supplier in this emerging market.
Conclusion
The energy transition has opened new doors for oil companies. Exxon Mobil and Chevron are leading this transformation, focusing on data center power.
With investments in carbon capture and their natural gas infrastructure, these companies compete with nuclear energy and supply the growing demand for AI. Decarbonized natural gas could be the fuel of the digital future.
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