The expected strong demand for natural gas will boost investments in the gas industry and will inevitably increase the prices of this resource.
Who said the end of gas was inevitable? An assertion that is completely swept away by a study carried out by Wells Fargo predicting a 20% increase in demand for natural gas by 2030 due to the growing use of artificial intelligence (AI). Indeed, technological progress requires greater use of electrical energy than renewable resources can make up.
According to this study, electricity companies, which are already facing increasing demand for energy, expect a boom in demand for natural gas to meet energy needs for the use of electricity. artificial intelligence. AI data centers alone are expected to add some 323 terawatt hours to electricity demand in the United States alone by 2030, indicates the same Source.
AI’s energy consumption is no less than seven times the current annual electricity consumption of New York City alone (48 terawatt hours). According to estimates from Goldman Sachs, data centers will represent 8% of total electricity consumption in the United States by the end of the decade.
“Increasing electricity demand poses a challenge for Amazon, Google, Microsoft and Meta. These technology companies have committed to powering their data centers with renewable energy to reduce carbon emissions.
But solar and wind power alone may not be enough to meet electricity demand, as it depends on variable weather conditions,” says a note from consultancy Rystad Energy. The latter believes that the increase in electrical loads will require an energy Source capable of meeting these growing needs and renewable energies do not produce enough energy.
Gas companies are betting on gas to remain a preferred choice for electricity production. “This situation of need demonstrates that the emphasis placed on renewable energy as the sole Source of energy is inevitably a mistake in terms of meeting the real needs of the market,” declared Richard Kinder, executive chairman of pipeline operator Kinder. Morgan, several media report.
The expected strong demand for natural gas will boost investments in the gas industry and will inevitably increase the prices of this resource. Note that the increase in supply on the market caused gas prices to fall by 30% during the first quarter of the current year.
But this trend is only cyclical, with the prospects of rising levels of demand boosted by the use of new technologies.
According to the Wells Fargo study, by the end of the decade, gas prices could increase by as much as 46% compared to the average price of $2.39 in 2024. CNBC media outlet notes that the transition towards renewable energy would also face concerns about the reliability of the electricity grid.
