Chevron to build gas plants for rising electricity demand

Chevron is preparing to take advantage of the rising electricity demand spurred by artificial intelligence (AI). As AI technologies become more prevalent, they require a significant amount of power, especially for data centers. Chevron plans to build gas-fired power plants to meet this growing need and enhance its natural gas usage. AI operations demand much more electricity than traditional services. For example, a single AI query can use ten times the energy of a basic internet search. AI data centers use up to fifty times more power per square foot compared to regular office buildings. Experts predict that electricity demand in the U.S. could rise by 55% over the next 20 years, which is a much higher growth rate than seen in the past two decades. To manage this power surge, a combination of energy sources will be necessary. While renewable energy will play a key role, it has limitations due to its inconsistent nature. Thus, natural gas is expected to fill the energy gap, driving up its demand in the coming years. Chevron, already a significant natural gas producer, is optimistic about its future prospects. The company is collaborating with investment firm Engine No. 1 and gas turbine manufacturer GE Vernova to develop power solutions for AI data centers. They aim to create up to 4 gigawatts of electricity, enough to power about 3.5 million homes, with initial plants operational by the end of 2027. Chevron has started the necessary engineering and permitting processes for several sites to generate this power. They have reported strong interest from potential customers. This initiative will help Chevron stabilize its earnings and respond to changing gas prices. Moreover, the company is considering environmental solutions like carbon capture to minimize emissions and is open to incorporating renewable energy into its plans.