The expansion of AI data centers and a rush to export fracked gas is rapidly reshaping the energy landscape.
By Mike Ludwig ,
December 27, 2024
A ship is docked as the sun sets on November 16, 2023, at the Port of Corpus Christi in Corpus Christi, Texas.Jon Shapley / Houston Chronicle via Getty Images
As the Biden administration scrambles to shield President Joe Biden’s climate legacy from Donald Trump in its waning days, the president-elect is staring down serious political dilemmas over the future of energy.
Two remarkable trends — a rush to lock-in major fracked gas exports for decades to come, and Big Tech’s growing thirst for energy to run supercomputers at artificial intelligence (AI) data centers — are rapidly escalating debates over fossil fuels and the climate crisis. After attacking Biden over inflation and high gasoline prices, Trump will be expected to keep energy costs down as more domestically produced fuel is gobbled up by AI or shipped overseas.
The fossil fuel industry is relishing these developments as it pushes to expand the market for cheap fossil gas produced by the fracking boom. However, allowing the industry to have its way could result in more climate-warming pollution as well as higher prices for already frustrated consumers and businesses on Trump’s watch.
Climate activists declared a victory in January when the Biden administration paused permit approvals for massive new liquified natural gas (LNG) export terminals along the Gulf Coast to give the Energy Department time to update its analysis of the potential economic impacts. Trump and Republicans in Congress railed against the pause as a handout to climate activists and pledged to “unleash” the fossil fuel industry from government oversight and climate regulations once Trump takes office.
Oil and gas companies rewarded Trump with $14 million in campaign donations during the last six months of his campaign (Trump had asked for $1 billion). However, as critics and now the Energy Department point out, exporting large amounts of fossil gas to other countries puts upward pressure on prices at home. Trump has pledged to lift the pause on Energy Department permits for LNG export infrastructure as proposals for massive terminals in Louisiana and Texas face local protests, but increasing exports could allow the Democratic opposition to attack Trump and the GOP when Americans face higher energy bills.
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The Energy Department’s much-anticipated economic analysis of future LNG exports dropped last week, and environmentalists are already planning to leverage the findings to challenge Trump’s pro-polluter agenda.
Energy Secretary Jennifer M. Granholm said the analysis exposes a “triple-cost increase” to U.S. consumers from increasing LNG exports — an increase in domestic fossil gas prices, an increase in the cost of electricity for homes and businesses, and an increase in prices passed down to consumers by manufacturers who are also paying more for energy.
“Special scrutiny needs to be applied toward very large LNG projects,” Granholm said in a statement. “An LNG project exporting 4 billion cubic feet per day — considering its direct life cycle emissions — would yield more annual greenhouse gas emissions by itself than 141 of the world’s countries each did in 2023.”
While not a forecast of future global energy markets, the report models various scenarios for U.S. LNG exports and urges caution when considering permits for large terminals where fracked gas is processed, liquefied and loaded onto ocean tankers. Allowing the industry to expand and export more gas would increase domestic prices by up to 31 percent by 2050, with the greatest impacts concentrated in the Gulf South, the same region already shouldering much of the industry’s pollution.
Granholm said the U.S. should also be strategic about where U.S. exports are sold. China’s demand for LNG is expected to nearly double by 2030, Granholm said, and several Chinese entities have already inked deals with existing or proposed LNG export terminals. Leaders of both parties consider China a top economic and geopolitical competitor, and Trump and Vice President-elect J.D. Vance often rail against the country to the delight of their supporters.
As the world’s top fossil gas producer, the U.S. can meet both domestic and global demand in all modeled scenarios, according to the analysis. The question is whether American consumers will benefit from the fracking boom by paying lower prices for goods and fuel. The industry generally favors exports, which keep prices high despite the massive volume of gas produced in the U.S., including on publicly owned lands leased to fracking companies by the federal government.
Granholm is a Democrat and former attorney general of Michigan. Trump’s pick to lead the Energy Department, Chris Wright, is the CEO of a fossil fuel company who donated to Trump’s campaign and said as recently as 2023 that the climate crisis does not exist.
Louisiana Gov. Jeff Landry, a Republican champion of proposed LNG export terminals facing protests from residents in his state, predictably lashed out at the Energy Department’s analysis. Pointing to data showing that LNG exports create jobs, the U.S. Chamber of Commerce and other pro-industry groups dismissed the report as misleading and politically motivated.
“What’s really politically motivated here is the power of the oil and gas industry over the Chamber of Commerce which has Chevron and other direct players in the LNG industry that bankroll that press statement,” said Tyson Slocum, director of the energy program at the watchdog group Public Citizen, in an interview. “It’s the chamber playing politics here, we are playing with facts.”
Slocum said the fossil fuel industry makes far bigger profits from exporting fracked gas than selling it domestically. Horizontal fracking, a controversial method of producing oil and gas, unlocked massive gas reserves across the U.S. over the past 15 years. So much gas was produced that prices plummeted, Slocum said, and the industry is aggressively searching for ways to expand the market.
“And now they’ve hit on what they believe is a goldmine, they have a two-fer, they have a situation where you have massive brand-new demand for gas happening simultaneously — LNG exports and AI data centers,” Slocum said. “The gas industry is aggressively pushing the narrative that the only solution is more fracking, more gas-powered power plants, more LNG.”
While the Biden administration attempted to slow LNG exports with the permitting pause and economic analysis, officials have not shown the same caution with AI data centers that house supercomputers used to crunch the massive amounts of data consumed by artificial intelligence programs. This requires huge amounts of energy and large volumes of water to keep the systems cool, but the industry is growing rapidly and is expected to consume up to 17 percent of all energy in the U.S. by 2030.
“The natural gas industry is exploiting these events and even encouraging these events to simply make America and the world as addicted to natural gas as possible,” Slocum said.
Last week, The Washington Post reported that the White House is drafting a plan to open up public lands for the construction of AI data centers along with power plants to fuel them. Environmental regulations would reportedly be eased to facilitate faster construction, and the power plants would be fueled by fossil gas, which would be eventually replaced by wind or solar at some unidentified time in the future.
Environmental and public interest groups quickly slammed the plan, saying it could allow the gas-burning power plants to exceed pollution limits and give data centers priority access to energy over other consumers on the electric grid.
“At best, this approach risks American families paying more for power and suffering the consequences of more health harming pollution from power plants,” said Abe Scarr, director of the U.S. PIRG Education Fund’s Energy and Utilities Program, in a statement. “At worst, it leaves American families in the dark, while AI siphons up all the energy on the grid.”
In Arizona, where politicians engineered a data center construction boom with lucrative tax breaks, consumers now face an 8 percent rate hike to pay for new electricity infrastructure, according to The Washington Post. Some Indigenous communities in the state do not have electricity at all, but the rate hike is making room for data centers and a growing population, not bringing power to rural tribal lands.
The Biden administration has not specifically commented on the reported plan to open up public lands to AI data centers, and it remains unclear whether an executive order will be issued before Biden leaves office. In a statement to The Post, the White House said the administration “is continuing to work with all stakeholders to ensure the U.S. leads the world in AI, and AI data centers are powered by clean energy without raising electricity costs for consumers.”
Balancing the rush to export more LNG and the energy demands of data centers with the needs of an electorate fed up with inflation and high prices will soon be Trump’s job. Trump scoffs at the climate crisis, but the costs associated with climate change are rising as well, with extreme weather and other impacts costing the U.S. about $150 billion each year. The incoming president may fantasize about using the vast quantities of “liquid gold” produced in the U.S. to pay down federal debt, but he may soon discover that slashing regulations and “unleashing” fossil fuels may not deliver the results that he expects.
'Big hammer': AI power needs rapidly take a toll on electric grids powering Americans’ homes
View of the United States at night from space (Image: NASA Goddard Space Flight Center)
View of the United States at night from space (Image: NASA Goddard Space Flight Center)
December 28, 2024
ALTERNET
The growing power requirements of artificial intelligence (AI) data centers are now already having a negative impact on millions of Americans, according to a new report.
Bloomberg reported Friday that in many major metropolitan centers, AI data centers are gobbling up so much electricity that the quality of power residents are receiving is starting to go down. As AI continues to proliferate, its footprint on local power grids could present a risk to older home appliances and fragile municipal infrastructure.
According to Bloomberg, many of the distorted power readings it analyzed based on hundreds of thousands of home sensors are within 50 miles of an AI data center. This includes homes in both urban and rural areas, and manifests in the form of "bad harmonics." The publication reported that those bad harmonics — in which waves of electricity traveling into a home are excessively distorted — "can force home electronics to run hot, or even cause the motors in refrigerators and air conditioners to rattle" and cause "billions of dollars in damage."
Aside from questions over whether residents will have enough electricity to run their homes, the growing electricity demand for AI data centers has also led to concerns over whether these power distortions could pose a physical danger to residents if a power surge destroys an appliance or causes an electrical fire. Hasala Dharmawardena, who is a senior engineer of power systems modeling studies at the North American Reliability Corp., warned that decision-makers "need to understand those risks," as AI is "such a big hammer" on local electrical grids.
"The data center is a very large load," he said. "Take your house and increase that by 10,000. That is the difference between your house and a data center."
Thanks to the growing AI industry, U.S. demand for electricity is expected to jump by 16% by 2030, according to a study conducted by Washington D.C. consulting firm Grid Strategies. That's more than triple the 2023 estimate in projected demand. And without significant investments in bolstering electric grid infrastructure, the threat posed by bad harmonics is likely to worsen. Metro areas with the most AI data centers include the Northern Virginia/D.C. metro area, the Dallas-Fort Worth metro area, the San Francisco Bay Area, Phoenix, Arizona, Atlanta, Georgia and Chicagoland.
"Harmonics are a pretty good canary in the coal mine for early signs of stress and problems," said Whisker Labs CEO Bob Marshall, whose company tracks power quality in real time.
The growing power requirements of artificial intelligence (AI) data centers are now already having a negative impact on millions of Americans, according to a new report.
Bloomberg reported Friday that in many major metropolitan centers, AI data centers are gobbling up so much electricity that the quality of power residents are receiving is starting to go down. As AI continues to proliferate, its footprint on local power grids could present a risk to older home appliances and fragile municipal infrastructure.
According to Bloomberg, many of the distorted power readings it analyzed based on hundreds of thousands of home sensors are within 50 miles of an AI data center. This includes homes in both urban and rural areas, and manifests in the form of "bad harmonics." The publication reported that those bad harmonics — in which waves of electricity traveling into a home are excessively distorted — "can force home electronics to run hot, or even cause the motors in refrigerators and air conditioners to rattle" and cause "billions of dollars in damage."
Aside from questions over whether residents will have enough electricity to run their homes, the growing electricity demand for AI data centers has also led to concerns over whether these power distortions could pose a physical danger to residents if a power surge destroys an appliance or causes an electrical fire. Hasala Dharmawardena, who is a senior engineer of power systems modeling studies at the North American Reliability Corp., warned that decision-makers "need to understand those risks," as AI is "such a big hammer" on local electrical grids.
"The data center is a very large load," he said. "Take your house and increase that by 10,000. That is the difference between your house and a data center."
Thanks to the growing AI industry, U.S. demand for electricity is expected to jump by 16% by 2030, according to a study conducted by Washington D.C. consulting firm Grid Strategies. That's more than triple the 2023 estimate in projected demand. And without significant investments in bolstering electric grid infrastructure, the threat posed by bad harmonics is likely to worsen. Metro areas with the most AI data centers include the Northern Virginia/D.C. metro area, the Dallas-Fort Worth metro area, the San Francisco Bay Area, Phoenix, Arizona, Atlanta, Georgia and Chicagoland.
"Harmonics are a pretty good canary in the coal mine for early signs of stress and problems," said Whisker Labs CEO Bob Marshall, whose company tracks power quality in real time.
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