ExxonMobil, Chevron eye AI data centers as next energy frontier

• Published On: 16 December 2024 at 11:28

ExxonMobil and Chevron are positioning themselves as key energy providers for AI data centers, capitalizing on the growing energy demands of the tech industry.

ExxonMobil announced plans to build a natural gas plant specifically for powering such data centers, along with carbon capture and storage technology to reduce emissions by up to 90%.

"We're working with other large cap industrials to rapidly deploy a solution that would provide both high reliability and low carbon intensity power to meet the growing demand for computing power for artificial intelligence," Kathryn Mikells, Exxon CFO, said.

ExxonMobil intends to build a natural gas plant specifically for powering AI data centers, designed to operate independently of the electric grid for faster deployment than traditional power systems, according to CFO Kathryn Mikells.

While details about the customer and timeline are unknown, the project is consistent with Exxon's extensive carbon capture investments along the Gulf Coast, which include over 900 miles of CO2 pipelines for transporting emissions to permanent storage.

The company estimates that decarbonizing AI data centers could account for up to 20% of its total carbon capture and storage market by 2050, emphasizing its strategy to meet rising energy demands while lowering emissions.

According to Jeff Gustavson, president of Chevron's New Energies division, the company is also looking into data center power solutions.

Speaking at the Reuters NEXT conference on Wednesday, Gustavson emphasized Chevron's interest in supporting data centers' energy-intensive needs, reflecting the oil industry's growing emphasis on integrating advanced energy solutions into the tech sector.

"This is something that our company is very well positioned to participate in," Gustavson told the audience.

Chevron is a major national gas producer with power generation equipment and vast tracts of land suitable for data centers, according to the executive.

Alphabet, Amazon, Microsoft, and Meta have traditionally used wind and solar power to power their data centers in an effort to reduce their environmental impact.

However, the increasing energy demands of artificial intelligence are driving these companies to seek more dependable electricity sources, as renewable energy alone may struggle to meet the consistent power requirements of AI operations.

To meet their rising energy demands, technology companies are increasingly turning to nuclear power.

Microsoft is helping to revive the Three Mile Island nuclear reactor by purchasing its power, while Amazon and Google's parent company, Alphabet, are investing in next-generation small modular reactors.

Meta has also expressed interest, requesting proposals for the construction of new nuclear plants to support its operations.

The fossil fuel industry and energy analysts have argued that due to the long timelines required to build nuclear plants, the tech sector will inevitably turn to natural gas.

Exxon CEO Darren Woods criticized nuclear power on Wednesday, claiming that it is not a viable solution for meeting AI's immediate and near-term energy needs.

"If you're betting on nuclear and something coming down the road, there's a long road ahead of us," Woods told Wall Street analysts on Wednesday.

The small nuclear reactors in which technology companies are investing are not expected to be commercialized until the 2030s.