Data centers and gas demand make boring pipelines great again |
Data centers and gas demand make boring pipelines great again
New pipeline construction is almost as hard to find in New York and New England as the Loch Ness Monster is in Scotland. But there’s now a NESE (pronounced “Nessie”) sighting in Brooklyn.
Oklahoma-based Williams Companies will break ground April 14 on the Northeast Supply Enhancement pipeline that expands its Transco natural gas network in New York, New Jersey and Pennsylvania.
“That’s the first pipe in New York in over a decade,” Williams CEO Chad Zamarin told Fortune. “What you’re seeing now is very broad [growth] across the U.S. footprint.”
Courtesy of a convergence of the AI data center power wave, rapidly growing export facilities, and population growth, the nation’s natural gas pipeline buildout is looking at its biggest growth surge in nearly 20 years—since the beginning of the shale gas boom.
While massive, long-haul pipelines are underway to liquefied natural gas (LNG) export hubs in Texas and Louisiana, a huge backlog of smaller gas pipelines or expansions is rising throughout the country from the Pacific Northwest to the Rockies and Midcontinent to the Southeast to connect data centers with gas-fired power.
“We’re trying to bring our capabilities to places where American companies and hyperscalers can’t get access to power and otherwise wouldn’t be able to build,” Zamarin said.
U.S. natural gas production was largely flat from 1970 to 2010, and then volumes spiked nearly 70% in a decade to about 100 billion cubic feet per day by 2020. Already having risen another 20% since then, production is projected to keep surging to about 160 billion cubic feet daily by 2040, driven by data centers and exports. The ample domestic supply is why the war in Iran hasn’t affected natural gas prices in the U.S., even while oil and fuel prices have spiked.
And, in order to keep the gas flowing and the data center dots connected, more and more pipe must plow into the ground.
“A few years ago, people were saying we don’t need more gas—ever,” said Hinds Howard, energy analyst for CBRE Investment, citing the pivot to renewable energy. “Now, technology companies that were the most net-zero people are clamoring for any power they can get, no matter if it’s gas or not.”
There are the obvious environmental concerns, but the overall demand surge and the need for power as soon as possible mean that both natural gas and renewable energy will continue to grow quickly.
The energy infrastructure analytics firm Arbo is tracking more than 150 gas pipeline projects nationwide that would provide about 150 billion cubic feet daily of gas supplies.
“I’d say there’s a far greater number of projects that are smaller in this buildout,” Arbo CEO Chip........