The U.S. gas industry is in a place that’s just right for the tech industry, said John Harpole, founder and president of Mercator Energy, a natural gas brokerage firm.

It’s a position reminiscent of a fairy tale. Data center developers have found themselves in the same situation as Goldilocks.

“They understand that it’s going to be 10 years before they have nuclear options, there’s a lot of coal-fired electric generation that’s about to be retired or has been retired,” Harpole said.

Natural gas—it’s just right!

Harpole was one in a panel of three discussing the growing demand for natural gas to power a developing AI data center sector at Hart Energy’s DUG Gas Conference & Expo on March 20.

As a developing part of the U.S. economy, the exact amount of power required is debated. Goldman Sachs estimated in 2024 that the data center demand could increase by 160%, about 200 terawatt-hours, by 2030.

Regardless of the actual amount, analysts spent much of the last year discussing how the electricity needs will be substantial, and that natural gas will provide the primary source of generation.

Harpole said the current U.S. electric grid has little chance to supply the oncoming data centers, and that it’s to the facilities’ advantage to locate close to supply.

“There's this fine balance of ‘Can the electric utility actually supply power to you?’ he said. “The area we’re really looking at is self-generation, off-grid power at the producer wellhead rather than the downstream delivery price.”

Rob Cashell, director of natural gas for Enchanted Rock, discussed how the current drive to find electrons has caused a lot of tech companies to re-think their strategies. Enchanted Rock is a company that provides on-site generation.

Most tech companies begin searching for power supplies with demands for renewable energy supplies only, he said. The pendulum has swung back toward traditional generation methods.

“These customers are fuel agnostic, but they need a solution, and they want one quickly.”

The development of AI requires companies to move fast to remain competitive, meaning that virtually any dependable source of electrons has become acceptable, Cashell said. Further, the proposed sites for data centers have become far more dispersed than most tech companies originally planned.

“There's specifically a requirement for some of the data center customers, which we talked to often for latency, and so there can be this request that we want to be 10 miles from the DFW Center,” Cashell said.

“Latency” describes the time it takes for a signal to bounce back and forth between the data center and the customer. The further away a data center is from the major hubs in major cities, the larger the potential latency.

Tech companies want latency to be as short as possible, but have found that finding the perfect site near metropolitan infrastructure is challenging.

“There's also this competing objective of ‘I can't get utility power for X number of years, and how long of a lateral do you want to build from gas infrastructure?’” Cashell said.

 William Sellers, a solutions architect for DartPoints, a company that designs and maintains data centers, said the tech industry considers three things for building sites: the safety and security of the site, the network connectivity, and most importantly, the availability of power.

“That’s really critical, right?” Sellers said. “We can’t wait five or 10 years for a nuclear plant to come online or some other type of plant to supply power. So that is probably the most critical thing for us.”

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