Proximity to natural gas lines could become just as desirable for datacenter operators as high-speed fiber-optic networks as they scramble to satiate AI's ever growing thirst for power.

Speaking to analysts during their respective earnings call this week, executives at Energy Transfer LP and Williams Companies, both of which operate pipelines across the US, revealed they were in talks with datacenter operators to supply them with large quantities of natural gas.

"We are, in four different states, in discussions with multiple datacenters of different sizes. Some of them, or many of them, want to put generation on site ... So it's an enormous opportunity for us," Mackie McCrea, co-CEO of Energy Transfer LP, told Wall Street, according to a transcript.

Energy Transfer LP's pipelines currently span 15 states in the USA, serving 185 power plants. Looking at the opportunity afforded by datacenter hookups, McCrea estimated that power demand could increase by 30 to 40 gigawatts over the next six to eight years.

"We believe we are extremely well positioned to benefit from the anticipated rise in natural gas needs," Energy Transfer LP co-CEO Tom Long added.

Energy Transfer LP isn't the only pipeline operator eager to take advantage of skyrocketing datacenter power demands. Speaking to analysts earlier this week, Williams Companies CEO Alan Armstrong expressed optimism about the firm's ability to capitalize on this demand.

"We are right in the throes of that. We have a very long backlog of projects, and I will tell you that particularly in the Southeast and Atlantic," he said.

However, Armstrong hesitated to say how large an opportunity that may be. "We frankly are kind of overwhelmed with the number of requests that we're doing and we are trying to make sense of these projects," he said.

The idea of datacenters foregoing the utilities and building out their own gas plants is by no means new. As we reported last year, Microsoft spent €100 million to build 22 gas-powered generators capable of producing 170 megawatts total in order to keep its €900 million datacenter development outside Dublin, Ireland, running.

While datacenter operators getting into the power business may seem like a strange idea, in certain markets, such as Dublin, utility capacity isn't guaranteed. As we reported last month, datacenters already consume more than a fifth of Ireland's electricity.

In America, Amazon Web Services (AWS) has also opted to power some of its Oregon datacenters using natural gas fuel cells. Much like the fuel cells used in many spacecraft, they generate power without the need for combustion. However, unlike space-faring fuel cells that turn hydrogen and oxygen into water vapor and power, the natural gas variety also produces CO₂.

It's not just the fossil fuel giants that stand to benefit from AI's voracious appetite for power. Uranium mines and slingers may benefit. Back in May, Cameco CEO Timothy Gitzel predicted that AI would ultimately drive up uranium sales, citing claims that generative search assistants can consume 10x the power of a traditional Google search.

In search for a steady supply of clean power, datacenter operators have begun exploring co-locating their operations alongside existing nuclear power plants. Earlier this year AWS acquired Cumulus Data's atomic datacenter campus in a deal valued at $650 million.

Meanwhile, Microsoft and others are exploring the possibility of deploying small modular reactors - essentially miniaturized and mass-producible nuclear power plants - just outside their facilities. ®

https://www.theregister.com//2024/08/11/pipeline_operators_ai_demand/