President Trump Is Making Sweeping Changes to U.S. Energy Policy. Here Are the Highlights.
On Inauguration Day, President Trump issued a slew of executive orders with the potential to make sweeping changes in U.S. energy policy. As the Wall Street Journal summarized: “Climate change out, national security in.”
President Biden, on his own first day in office four years ago, “issued an order directing agencies to confront what the then-president described as the climate crisis,” reported the Journal. “A few days later, another order by Biden put climate change at the center of U.S. foreign policy and national security. That is all gone.”
By contrast, the crisis that President Trump wants to address is one of security. He said, in the Journal’s words, that “high energy prices are an active threat to the American people and the nation.” He also issued an order “that may lay the groundwork for eliminating the Environmental Protection Agency’s findings that a concentration of greenhouse gases in the atmosphere threatens public health. Trump also once again withdrew the U.S. from the Paris climate accord,” and he ended what he has called the EPA’s electric vehicle [EV] mandate.
The orders also directed the Department of Energy to resume liquefied natural gas (LNG) export permits, thus ending the Biden Administration’s “deeply polarizing” moratorium, which this newsletter has covered extensively. In addition, the President rescinded the controversial Phase 2 rulemaking for the National Environmental Policy Act (NEPA) and once again disbanded the Interagency Working Group on the Social Cost of Greenhouse Gases, established in 2009 by President Obama. The group calculates the “net harm to society of adding one ton of emissions.”
The guiding Jan. 20 executive order on energy — titled, “Declaring a National Energy Emergency” — states:
We need a reliable, diversified, and affordable supply of energy to drive our Nation’s manufacturing, transportation, agriculture, and defense industries, and to sustain the basics of modern life and military preparedness…. The integrity and expansion of our Nation’s energy infrastructure — from coast to coast — is an immediate and pressing priority for the protection of the United States’ national and economic security.
The order directs federal agencies to “identify and use all relevant lawful emergency and other authorities available to them to expedite the completion of all authorized and appropriated infrastructure, energy, environmental, and natural resources projects that are within the identified authority of each of the Secretaries to perform or to advance.”
In a separate executive order, titled “Unleashing American Energy,” Trump seeks to reduce regulatory burdens and “encourage energy exploration and production on Federal lands and waters, including on the Outer Continental Shelf.” The order also aims to “establish our position as the leading producer and processor of non-fuel minerals, including rare earth minerals,” in part to “reduce the global influence of malign and adversarial states.
The order also calls for promoting “true consumer choice” by “terminating, where appropriate, state emissions waivers that function to limit sales of gasoline-powered automobiles; and by considering the elimination of unfair subsidies and other ill-conceived government-imposed market distortions that favor EVs over other technologies and effectively mandate their purchase by individuals, private businesses, and government entities alike by rendering other types of vehicles unaffordable.”
In addition, the order also seeks:
to safeguard the American people’s freedom to choose from a variety of goods and appliances, including but not limited to lightbulbs, dishwashers, washing machines, gas stoves, water heaters, toilets, and shower heads, and to promote market competition and innovation within the manufacturing and appliance industries.
Yet another executive order, titled “Unleashing Alaska’s Extraordinary Resource Potential,” states that it will now be U.S. policy to “efficiently and effectively maximize the development and production of the natural resources located on both Federal and State lands within Alaska” by expediting permitting and leasing and prioritizing Alaska’s LNG potential, calling for liquefied natural gas to be shipped “to other regions of the United States and allied nations within the Pacific region.”
At the same time, Trump ordered a temporary halt to wind-power leasing and permitting on federal land and waters.
In addition, the executive actions by the President require a 30-day review by federal agencies of barriers to development of domestic energy resources – in particular, natural gas, oil, coal, biofuels, nuclear, hydropower and critical minerals.
The measures were met with enthusiasm by U.S. businesses. Jay Timmons, the president of the National Association of Manufacturers, stated: “Expanding domestic energy production drives innovation, creates jobs and powers the growth that keeps America at the forefront of the global economy.”
The CEO of the National Rural Electric Cooperative Association, Jim Matheson, praised President Trump’s initial actions, saying that his “swift reset” will “help keep the lights on” and “address today’s energy challenges” to meet growing demand for electricity.
The full effect of the executive orders, however, remains uncertain. As the Wall Street Journal’s Benoit Morenne and Jennifer Hiller reported on Jan. 22:
Lawyers said Trump’s avalanche of executive actions is all but certain to be litigated by opponents in the court—and that it will take some time before their true impact is clear. The Natural Resources Defense Council immediately vowed to fight the administration’s efforts to roll back environmental protections.
Said Steve O’Day, a partner at law firm Smith, Gambrell & Russell, “It appears that the only certainty achieved by this raft of Executive Orders is that it will cause years of litigation before there will be any results on the ground.”
The National Energy Emergency order itself will probably withstand challenges.
As Reuters reported:
Legal experts say challenging the declaration itself in court would likely be futile because courts rarely question the president’s judgment in using the National Emergencies Act. “The law doesn’t define what an emergency is, and so far no court has been willing to overturn a finding that there is an emergency,” said University of California, Berkeley Law School professor Dan Farber.
But some analysts argue, as Alan Rappeport and Colby Smith of the New York Times wrote on Jan. 24, “that Mr. Trump is creating an energy emergency that does not exist. The United States is already the world’s largest producer of oil and natural gas. The price of oil, about $76 per barrel, is in line with its average cost over the last two decades. Despite fears that war in Ukraine and the Middle East would cause gas prices to surge indefinitely, they have declined by about 3 percent, to about $3.13 per gallon, over the last year.” They added:
While Mr. Trump can create incentives for oil and gas companies to expand energy production, he cannot force them to produce. The oil and gas industry donated millions of dollars to Mr. Trump’s presidential campaign in hopes that he would roll back costly environmental regulations if elected. However, an expansion of production that drives down prices could also eat into the profits of big oil and gas companies.
Unleashing U.S. exploration and production is widely applauded, but the other critical problem that the President is addressing is encouraging investment in capital-intensive infrastructure projects by removing unnecessary regulatory and judicial obstacles. The energy crisis, as we have related many times in this newsletter, is an inadequate energy grid, caused by rising demand for electricity at the same time generation and distribution resources are being depleted.
Chris Wright Vows to Grow All-of-the-Above Production and the Grid at His Confirmation Hearing as Energy Secretary
Chris Wright, the nominee for Energy Secretary, addressed just this crisis in his January 15th appearance before the Senate’s Energy and Natural Resources Committee as part of the confirmation process. Said Wright: “I am committed to growing our electricity grid and our energy production and removing those barriers that are standing in the way.”
Wright, chief executive of Liberty Energy and Pacific Research Institute board member, a Denver-based oil field services company, is expected to win approval by the full Senate.
In a report on the hearing, Peter Behr of E&E News wrote that President Biden prioritized transmission expansion “as the means for dramatically accelerating long-distance energy delivery from prime wind and solar regions to urban centers.” The reporter continued:
In the past two years, DOE expanded the case, saying a bigger grid was a vital added defense against large-scale extreme weather assaults and a conduit for more competitively priced power. Now, grid officials are waiting anxiously to see how the policy teams under Trump view transmission expansion.
One key policy issue will arrive later this year when Congress is expected to take up legislation to speed permitting and siting of energy infrastructure. Sen. Martin Heinrich (D-NM) “raised efforts in Congress to couple regulatory relief for power lines with Republican plans to speed up fossil fuels pipeline projects,” E&E News reported.
Wright responded to Heinrich, “I’m aligned with you and will seek to find the best ways to improve our transmission grid, including expansion and new lines.
An Energy Department report in December found that data centers using sophisticated artificial intelligence (AI) chips could account for as much as one-eighth of the country’s electricity by 2028, driving a prodigious surge in electricity demand. Said E&E News:
Across the Eastern grid, in particular, lower-carbon sources of power aren’t coming online fast enough to replace older, dirtier power plants as they shut down. Plans for building out transmission grids are gaining momentum, but speeding that development remains a political and policy challenge for a Secretary of Energy of any party.
The article quoted Jim Robb, CEO of the North American Electric Reliability Corp. (NERC), speaking on a panel sponsored by the U.S. Energy Association: “We are going to need long distance transmission. We are going to need large power plants, and we’re going to need them quickly.”
So, to the extent that a presidential order speeds permitting reform “to get projects in place to address some of the fuel supply issues that we’re starting to see, particularly with natural gas, God bless them,” Robb added. “That’s exactly what this country needs right now.”
Lower-carbon sources are not coming online fast enough replace older power plants that are being shut down, rendering the electric grid precarious, especially on the East Coast. In jeopardy are reliability and utility bills for consumers and businesses.
At the hearing, Wright called himself an “unabashed steward for all sources of affordable, reliable, and secure American energy.” As a Liberty Energy executive, he wrote last year: “Two things are required for positive progress on climate change: a sober understanding of the issue and the tradeoffs required, and massive improvements in energy technologies that can deliver low-carbon energy that is also low-cost, reliable and secure.” He added:
The expansion of the global energy supply by adding fossil fuels has greatly improved the human condition; it also brought the risk of climate change caused by increased atmospheric levels of carbon dioxide and other greenhouse gases…. Climate change is a real and global challenge that we should and can address.
The implication is that DOE under Wright will promote a balanced, all-of-the-above energy policy that strengthens the grid and national security. Unlike the Biden Administration, he has no doubts about LNG as a relatively low-emission source of fossil fuel. Said Wright:
There’s 7 billion people in the world that don’t live lives anything like we do. And of course, they should get what we have. And through market forces and improvement and leadership, particularly leadership from President-elect Trump, I think we’re going to see more abundant energy resource coming out of our country and hopefully out of the world, so that everyone else can live lives like we do.
He added, “There isn’t dirty energy and clean energy, all energies are different, and they have different trade-offs.”
Sen. John Hickenlooper (D-CO), who introduced Wright to the committee, said that despite differences on the urgency of climate change, he thinks Democrats can work with the nominee. “We disagree on a lot of things.… He is indeed an unrestrained enthusiast for fossil fuels in almost every regard,” said Hickenlooper. “But I think we both learned and evolved over the years on a number of issues, and I have high optimism we can work together.”
Still, reported E&E News, “Wright’s balancing act on climate change is unlikely to appease certain Democrats skeptical of increased fossil fuel production.” Sen. Ed Markey (D-MA) said in a statement: “We can’t afford to have a fossil fuel CEO like Chris Wright help the industry capture our federal agencies further for oil profits.”
Trump Names Commissioner Mark Christie the New Chair of FERC, But Democrats Keep Majority
On Inauguration Day, President Trump named Mark Christie chairman of the Federal Energy Regulatory Commission (FERC), replacing Willie Phillips, who was appointed by President Biden. FERC is a powerful agency that, among other functions, issues permits for gas pipelines, liquefied natural gas terminals and other infrastructure projects. As E&E News noted, “It is increasingly engaging in major challenges around meeting rising electricity demand.”
Christie, who was originally nominated and confirmed as a commissioner toward the end of Trump’s first term, said he had three priorities:
First, the need for FERC to protect consumers from excessive power costs…. Second, I have repeatedly warned that America is facing a reliability crisis driven by the dangerous pace of retirements of dispatchable generation units and failure to build sufficient new generation. [And] third, I have emphasized the critically important role of the states and their utility regulators in meeting these reliability and affordability challenges.
As Utility Dive reported, “Christie said he has repeatedly warned that the United States faces a reliability crisis driven by the pace of power plant retirements without adequate replacement generation.” Christie said at a May 2023 Senate Energy and Natural Resources Committee hearing, “The arithmetic doesn’t work. This problem is coming. It’s coming quickly. The red lights are flashing.”
E&E News called Christie “a vociferous critic of Biden-era rules and policy initiatives he viewed as federal overreach.”
FERC currently has five commissioners: three Democrats and two Republicans. Phillips’s term does not expire until mid-2026, and, unless Phillips resigns before then or another Democratic commissioner (David Rosner or Judy Chang) leaves early, Republicans will not have a majority for another year and a half. Lindsay See is FERC’s other Republican commissioner, and Christie’s own term ends in June 2025 – though he is expected to be re-appointed.
One thorny issue that FERC is tackling involves co-location of data centers at generating plants, which President Trump recently said “was largely my idea.” He said, “Nobody thought this was possible.… I told them that what I want you to do is build your electric generating plant right next to your plant as a separate building connected.”
ClearView Energy Partners, a research firm, said that these comments “appear to align” with the position of Christie – but with an important nuance. As E&E News reported:
Chairman Christie has supported co-location on the condition that developers site data centers adjacent to new power plants. He has raised concerns about data centers or other energy-intensive facilities co-locating next to existing baseload resources, which, in his words, would reduce “big dispatchable resources out of the supply stack.”
As we reported in Issue No. 42 of this newsletter, FERC on Nov. 1 rejected a proposal by Talen Energy and PJM Interconnection to deploy 180 megawatts (MW) of nuclear generators in Pennsylvania to serve data centers directly. The vote was 2-1, with Christie and See in the majority.
That proposal involved co-location with an Amazon Web Services data center. FERC was concerned that the ISA, or interconnection services agreement, would not adequately protect consumers against cost shifts.
“The possibility of a ballooning number of co-located data centers has raised questions about potentially higher power bills for everyday customers because the centers will use grid infrastructure and services paid for by the public,” Laila Kearney of Reuters reported.
Talen on Jan. 15 asked the U.S. Court of Appeals for the Fifth Circuit to overturn FERC’s decision.
Immediately before joining FERC, Christie chaired the Virginia State Corporation Commission (Virginia SCC), on which he served for nearly 17 years. “He was elected to the Virginia SCC, which regulates utilities, insurance and banking, three times by the Virginia legislature on bipartisan votes,” said a FERC press release.
During Christie’s service as a state regulator, he was elected president of the Organization of PJM States, Inc. (OPSI), an organization of utility regulators representing the 13 states and the District of Columbia which participate in the PJM transmission and markets organization. He was also president of the Mid-Atlantic Conference of Regulatory Utilities Commissioners.
Grid Operators Performing Well So Far in a Harsh Winter
Winter isn’t over, and so far it has been harsh, especially in the East, Midwest, and South. New Orleans had its first snowfall in 15 years: up to 10 inches. It snowed in Florida as well, and frigid temperatures caused the inaugural ceremony to be moved inside for the first time in 40 years.
Despite the extreme weather, the energy delivery system has performed remarkably well – certainly better than in 2021, when a storm brought Texas to a standstill and killed dozens.
A particular success story has been PJM, the nation’s large regional transmission organization, serving the Mid-Atlantic and other parts of the country that were hit hard by this winter’s cold snaps and snow. On Jan. 22, PJM reported it set a “record for winter demand at around 8:15 a.m. with instantaneous peak load coming in at approximately 145,000 MW [megawatts], while exporting nearly 8,000 MW to our neighbors. The previous record, set 10 years ago, was 143,700 MW.
PJM has been able to navigate the extremes by taking several steps, said the RTO’s vice president, Mike Bryson. These included sending out advisories and alerts to prepare members for the cold, helping “generators line up gas purchases with the gas market, especially over holiday weekends,” making sure that any generators out for maintenance were back in service, and issuing alerts to neighboring regions that electricity exports from PJM may be curtailed, if necessary.
Bryson added:
We also worked closely with member companies to help resolve any cold-weather issues before the deep freeze set in. All of those steps served to help PJM and our members get ready for the cold weather. They have performed remarkably thus far, and I am grateful for their efforts.
Texas has also done well this winter. In early January, a storm hit much of the state, including Dallas, which was paralyzed by sleet and snow. But throughout the afternoon of Jan. 9, the height of the storm, “ ERCOT’s grid condition tracker reported about 10,000 megawatts of reserve power, meaning significant excess supply was available to meet the demand despite the cold weather,” reported the NBC affiliate in Dallas. Outages affected only 600 to 2,000 customers at any given time, out of 4 million.
ERCOT, which manages the power supply for 90% of Texas, and PJM, which covers all or part of 13 states and the District of Columbia, are providing strong evidence of a growing culture of cooperation among those responsible for grid operators. They understand that the risks are substantial, with increased demand and inadequate supply, and they are doing their best to be prepared.
But this is no time to be complacent. “As the population and energy demand have grown, if we were to have those weather conditions of 2021 again, we would have even more demand than we did then. And back then, the grid came one-third short of having enough power to go around. So, that’s a huge margin that really no state had seen before,” said Daniel Cohan, an energy researcher at Rice University, commenting on the Texas situation.
The Winter Reliability Report from the NERC, released in November, found that Texas and much of the Midwest and Northeast are at elevated risk of having insufficient operating reserves in above-normal conditions. But so far, so good.
Colorado Launches a ‘Microgrid’ Plan to Meet Growing Reliability Concerns
In our Newsletter No. 43, we reported that grid “reliability concerns have spurred what Dallas Fed called a ‘backup generation boom.’” The reported in December that 302 “microgrids” were deployed in 2023. Said the piece:
As the name implies, a microgrid is a miniature electric grid, complete with interconnected loads, generators and sometimes even energy storage systems. Unlike a backup generator, a microgrid can be autonomous from the electric grid for most or even all of the time. Take-up of microgrids has been notable among Texas commercial entities.
Now, the Democratic Governor of Colorado, Jared Polis, has announced the launch of a Colorado Microgrid Roadmap, an initiative to improve the state’s power grid in the face of rising demand.
“Microgrids will bring big benefits to communities across Colorado including in rural areas, by saving people money on energy bills and keeping the power on,” Polis said in a Jan. 2 press release. “This roadmap provides a clear path to improve the opportunities for Coloradans to access locally produced, low cost, reliable energy.”
The action came after the Colorado General Assembly in 2022 directed the Colorado Energy Office and Department of Local Affairs to produce a comprehensive overview of the role microgrids can play in a more resilient and reliable electricity grid. That directive asked for “guidance on how microgrids may be used to harden the grid, improve grid resilience and reliability, deliver electricity where extending distribution infrastructure may not be practicable, and operate autonomously and independent of the grid, when necessary.”
Polis’ microgrid plan identifies communities at higher risk of power outages or grid disruptions, including much of rural Colorado in the southwest and southeast parts of the state as well as urban centers.
Department of Local Affairs Executive Director Maria De Cambra said in a statement:
“It’s vital that local governments, utilities and community institutions … enhance their critical infrastructure’s energy resilience against increasing demand on the grid, and more frequent and severe impacts of natural hazards.”
Colorado has more than a dozen microgrids in operation, powering, for example, the Denver International Airport Automated Guideway Transit System, the Denver Rescue Mission’s
Lawrence Street Community Center, and the City of Arvada Center for the Arts and
Humanities. Other microgrids are being used by a Toyota dealership, a brewery, and the Tutt Library at Colorado College.
According to the Colorado Microgrid Roadmap website, the library offers “an example of a microgrid intended to meet multiple goals, including lowering operating costs for the building, ensuring the resilience of the library, and helping to meet the college’s carbon reduction goals.”
Reliability is a key feature of microgrids, which provide backup power and can operate in isolation from the regional grid as needed, “downstream” from system outages.
Colorado is the fourth-largest oil producer among the states and has the ninth-largest reserves of natural gas. Last year, a bill to ban all new oil and gas drilling projects starting in 2030 failed in a bipartisan vote in the legislature because of concerns about the economic impact of the prohibition.
According to the Energy Information Administration, 32% of Colorado’s electricity was generated from coal, 29% from natural gas and 28% from wind energy. With this new development plan, Colorado is trying to maintain a balance between traditional and renewable sources of energy to ensure the state’s grids – conventional and micro – are reliable and supplied with abundant energy at a time of heightened demand.
For Trump the Second Time Around, the Grid Is in Very Different Shape
As Donald Trump takes office for a second time, the larger grid is an enormous challenge. During his first term, demand for power was flat – 3.9 trillion kilowatt hours in 2016 and the same in 2020 — and new transmission lines were barely being built.
By contrast, under President Biden, demand for electricity accelerated, and, as a Jan. 9 article in E&E News put it, “Joe Biden learned to love transmission during his four years in the White House.” Now the question is whether “Donald Trump will show the same ardor for large power lines.”
Among Biden’s efforts, said the article:
A nearly $5 billion loan guarantee for a massive Midwestern power line is pending. Federal financial support for four major transmission projects worth $1.5 billion is yet to be completed. And two major regional grants worth nearly $640 million, one for transmission upgrades in the Mountain West and another for an offshore wind interconnection in New England, are still in negotiation.
There is no doubt about President Trump’s desire to increase fossil-fuel resources, but will he be as devoted to getting electricity where it needs to go? Biden wanted to convert the traditional power grid into a net-zero electricity system, moving to green energy. But a DOE study found that a much larger grid than is currently contemplated is needed to move green power from one region to another.
The National Transmission Planning Study found that, to get maximum benefits over a range of scenarios, the transmission system will have to grow 2.4 to 3.5 times its 2020 size by 2050. Under current policies, the system will grow only 2.1 to 2.6 times its 2020 size.
Biden tried to give new power lines a boost with funding dollars and tax incentives from the bipartisan infrastructure law and the Inflation Reduction Act. DOE also created the Grid Deployment Office “to catalyze the development of new and upgraded electric infrastructure across the country by maintaining and investing in critical generation facilities; developing and upgrading high-capacity electric transmission lines nationwide; and deploying transmission and distribution infrastructure and technologies.”
The Office oversees $22 billion in federal funding, including a $10.5 billion grant program to enhance grid resilience and a $2.5 billion revolving fund to help finance new lines.
It’s taken a while, but DOE has approved a $700 million grant to the North Plains Connector a 420-mile line in North Dakota and Montana, which would create the first grid connection between the North American eastern and western grid systems, which are currently separated by the Rocky Mountains.
But these investments don’t appear to be enough. Data centers, driven by the quest for more AI computing power, are beginning to strain the grid. Those centers could account for 44% of U.S. electricity load growth from 2023 to 2028, according to a Bain & Co. analysis late last year. Meanwhile, concern is growing over the reliability of renewable sources such as solar, whose installation costs are high and infrastructure is lacking. And, of course, solar is weather-dependent.
As President Trump’s first term was drawing to a close, he issued an executive order that sought to protect the electricity system from cyber and other attacks. Today, the grid is facing new challenges as the estimation of load growth over the next five years surges more than five-fold. The President will have to face these realities and not only unleash America’s energy abundance but augment the grid, safeguard it, and keep energy affordable and reliable.
Will AI Data Centers ‘Eat the Grid’ and Wreck the Economy?
Just six days before he left the White House, President Biden signed an executive order to “accelerate the speed at which we build the next generation of AI infrastructure here in America, in a way that enhances economic competitiveness, national security, AI safety, and clean energy.”
The order stated:
In building domestic AI infrastructure, our Nation will also advance its leadership in the clean energy technologies needed to power the future economy, including geothermal, solar, wind, and nuclear energy [and] foster a vibrant, competitive, and open technology ecosystem in the United States.
The order directed DOE and the Department of Defense to each identify a minimum of three sites on Federal land “to lease to non-Federal entities for the construction and operation of a frontier AI data center” by the end of 2027.
The order responds to the alarm being sounded by research and financial firms and tech businesses about how AI data centers are accelerating risks to the electric grid and the reliability of affordable electricity for individual customers.
A report by Schneider Electric on Jan. 2 warned of a “future where data centers eat the grid,” said a piece in The Register. Schneider presented a scenario that “foresees the rapid growth of AI leading to its energy demands conflicting with other critical sectors of the economy. This triggers various negative outcomes, including economic downturns and severe operational challenges for AI-dependent industries.”
In the scenario, AI energy consumption peaks around 2029 but then falls by nearly half by 2032 and keeps dropping as the economy declines. “Uncoordinated AI governance will lead to fragmented policies, which could result in global or localized energy shortages, according to the report,” said the piece.
Around the same time, the New York Times reported that Microsoft announced it would “spend approximately $80 billion during this fiscal year to build data centers for its booming artificial intelligence business.” The growth of AI data center spending, said the Times article “has the makings of a climate conundrum.” The piece continued:
In order to power all of those data centers, Microsoft and other tech companies building similar projects are going to need huge amounts of electricity. That means ever greater strains on a power grid that is still, to a significant extent, fueled by natural gas, and to a lesser extent, coal.
Meanwhile, Bloomberg published a major article with the headline, “AI Needs So Much Power, It’s Making Yours Worse.” It said that data centers are impacting the quality of power delivered to millions of consumers, especially in markets where these centers are proliferating, such as Northern Virginia. More than three-quarters of highly distorted power reading in the U.S. are occurring within 50 miles of large data-center activity.
More than half of the households affected by power distortions live within 20 miles of this activity, often in major urban centers, especially in “data center alley” in the Northeast as well as in Chicago and along the East and West coasts of Florida.
These reports all point in the same direction: More energy of all sorts is needed to meet demand, but natural gas appears among the best solutions, especially in the short term. As the New York Times article stated, “Gas is the largest source of power for the U.S. grid, accounting for about 42 percent of electricity generation. And given the number of gas-fired power plants already out there, it’s also the fuel source that is easiest to scale up quickly to meet the additional demand coming from data centers.”
The Times piece quoted Nili Gilbert, vice chairwoman of Carbon Direct, as saying, “Natural gas plus C.C.S. [carbon capture and sequestration] is one of the quickest ways that we can bring low-carbon base load power online.”
Schneider Electric, in addition, recommended that operators regularly assess and upgrade infrastructure while aiming to improve Power Usage Effectiveness (PUE) in datacenters.
Still, the recent spectacular arrival of DeepSeek, a Chinese AI-powered tool, may mean a more efficient approach to training large language models. That could, in Newsweek’s words, “point toward a less energy-intensive – and more climate-friendly – future for AI, according to some energy analysts.”
Newsweek quoted John Larsen, a partner at the research firm Rhodium Group, saying, “It raises the potential that electric demand from model training may end up being lower than previously thought.”
Latitude Media, which covers the energy transition, headlined on Jan. 29, “Does DeepSeek call the data center boom into question?”
We will have to see. Change is happening quickly in the AI space, but, for now, policy makers would be foolish to ignore the challenge of the new technology’s demands on the immediately. Natural gas, which is clearly abundant and reliable, appears a major part of the solution – along with significant grid upgrades.