The Race for AI Dominance Underscores the Need for Natural Gas
By Eben M. Wyman, Principal, Wyman Associates
(P&GJ) — Electricity is the lifeblood of modern society, powering our homes, industries, communications and daily activities. As the global demand for electricity continues to rise, the pursuit of reliable, efficient and sustainable means of power generation is more crucial than ever. Among the various sources of energy, natural gas has emerged as a pivotal contributor in the generation of electric power, offering unique advantages that position it as critical to the U.S. energy future.
From the earliest days of coal-fired steam engines to the emergence of renewable energy technologies, the energy industry has continually evolved to address changing societal needs and environmental priorities. Natural gas, which has been under constant attack for the past several years, is now increasingly recognized as a critical fuel for power generation.
Despite constant attacks from a well-organized and well-funded environmental community, the track record of clean-burning natural gas is evident. Burning natural gas produces about 50%–60% less carbon dioxide (CO₂) than coal per unit of electricity generated. In addition to lower CO₂ emissions, natural gas combustion emits less sulfur dioxide, mercury and particulate matter, paving the way for improved air quality and public health.
LISTEN NOW: Wanted: More Pipelines as AI Data Centers Drive Gas Demand
In addition, because of industry efforts, methane emissions have been declining for decades. Modern technology and industry practices have helped minimize leaks during extraction, transportation and usage of natural gas.
Natural gas holds a unique and vital place in the generation of electric power. Its combination of reliability, efficiency, economic value and relatively lower environmental impact makes it an important resource in the ongoing evolution of the energy sector. As the world pursues a sustainable and resilient energy future, natural gas will continue to play a supporting—and sometimes leading—role, ensuring that the lights stay on while we navigate the path toward cleaner alternatives.
Focus on Gas and AI
The Energy and Equipment Infrastructure Alliance (EEIA) recently sent a letter of support for the establishment of a new working group on AI and energy. The EEIA represents the energy supply chain, consisting of the companies and workers who build and provide equipment, materials, supplies and services to energy infrastructure development, including facilities essential to natural gas production, transportation and consumption.
Created by Representative Julie Fedorchak, this working group aims to develop a legislative framework that will reliably, affordably and sustainably power the future of AI in the U.S. The EEIA’s letter was in response to a request for information (RFI) recently issued by Fedorchak to gather input from various stakeholders, including project owners, energy producers and tech sectors, on strategies to ensure a stable and sustainable energy supply for AI infrastructure.
The RFI focused on three core pillars: American energy dominance and AI energy demands, a strong secure electric grid and maintaining American competitiveness in the AI era.
When introducing the new working group on the House floor, Fedorchak was enthusiastic.
“I am announcing my plans to create an AI and energy working group. While my colleagues are thankfully working hard on regulation, speech and other components of AI, this working group will focus exclusively on AI and the energy this growing technology demands,” she said. “My goal is to bring in experts and stakeholders, legislators and other interested parties to fully explore these power needs, current barriers to meet it and federal policy solutions to help reliably, affordably and sustainably power the future of AI.”
The main points in the EEIA’s letter focused on permit reform, making the point that if the U.S. wants to compete with China in the race of AI, natural gas will play a strong role, and pipeline infrastructure must expand to transport the gas.
According to the EEIA, American energy dominance today is constrained by inadequate natural gas transmission capacity, preventing greater levels of production. Producers cannot produce more than the takeaway capacity of pipelines, which are now operating close to 100% of capacity. The main reason fewer new pipeline projects are being brought forward by midstream operators is the time and cost uncertainty imposed by permitting barriers.
No matter the economic opportunity, project owners are understandably reluctant to undertake the upfront costs of designing and engineering a new project or capacity expansion. The EEIA letter highlighted two important and enduring challenges to robust permit reform.
CWA Section 401
The Ambiguity in Clean Water Act Section 401 (CWA 401) remains a major problem in moving energy in certain parts of the country. CWA 401 allows a state review of a project’s impacts on water bodies during construction, and to issue permits if it finds that those impacts will be adequately addressed.
However, some states have gamed the system by interpreting CWA language to deny construction permits based on environmental impacts of greenhouse gas emissions from combustion of the natural gas and not on water quality considerations as intended by the CWA. In other words, delays are based on political factors, not water quality standards.
Judicial Reforms
Judicial reform is critical in the race for AI dominance because the current permitting processes for energy infrastructure projects, including pipelines essential for natural gas transmission, face substantial delays and obstacles due to prolonged judicial and administrative challenges.
The need for streamlined judicial review stems from the fact that most fossil energy, including natural gas, which is projected to be a primary energy source for the growing number of AI data centers, cannot be efficiently produced or consumed without a reliable transportation network.
Without judicial reform to limit challenges, projects encounter endless litigation, which not only halts their progress but also discourages project sponsors from initiating new ventures. This stymies the advancement of critical energy infrastructure essential for maintaining the pace of AI development and technological innovation.
By enacting reforms that shorten review times, protect review findings and establish eminent domain authority for essential infrastructure projects, the path to achieving AI dominance becomes smoother and more predictable, fostering confidence in investment and accelerating project completion.
The EEIA said it was looking forward to “working with and supporting the AI and energy working group as it develops policy and legislative recommendations to enable the investments needed for American AI and energy dominance. We also stand ready to mobilize business and worker stakeholder voices in support of legislative reforms to ensure energy is abundantly available to enable American AI dominance.”
Most in the energy sector know the value of natural gas and the need to ensure a pipeline network with the capacity needed to transport it. However, the rising attention to the race for AI dominance and the overwhelming demand for electricity to power data centers has brought natural gas back to the forefront of the discussion. This is a very good thing, and industry must be ready to do their part.
EBEN WYMAN is a veteran advocate for key underground utility and pipeline associations. He can be contacted at eben@wymanassociates.net.