Natural gas or nuclear power: where is the future of data center power?

Data centers and their power supply are an area where the world’s largest companies are currently competing. Oil giants such as Exxon Mobil and Chevron have also joined the race. Unlike their competitors, however, they would meet ever-growing demand for electricity with natural gas rather than renewable sources, CNBC reported.

While tech giants such as Google and Amazon are betting on small modular reactors (SMRs), for example, and Microsoft is looking to revive the Three Mile Island nuclear power plant, Exxon and Chevron are entering the game with plans to use natural gas. It is worth noting that the gas-fired power plants will feature carbon capture technology (CCS – carbon capture and storage), which, according to the companies, will reduce emissions by up to 90%.

“We would build a facility that would use natural gas to generate substantial amounts of highly reliable electricity for a data center, and look for opportunities to source lower-carbon natural gas, such as the gas we produce in the Permian Basin. Using carbon capture, we would remove more than 90% of the associated CO2 emissions and transport the captured CO2 to a secure, permanent storage site deep underground,” Exxon said on its website.

The reason is clear. The US nuclear power industry cannot compete with the pace of gas-fired power plant development. Given the meteoric rise of artificial intelligence, which is not set to slow down—in fact, the opposite is true—rapid solutions are needed. Exxon is therefore aware of its capacity and capabilities, which could make it an attractive option for potential customers.

Chevron takes a similar view. It is also a major domestic gas producer and has significant resources and land where new data centers could be built. “This is something our company is very well positioned for,” said Jeff Gustavson, president of the company’s New Energies division.

One thing is certain: competition to power data centers will intensify in the coming years. While tech companies are investing in long-term solutions such as nuclear reactors and renewable energy, oil giants are betting on the speed and efficiency offered by natural gas combined with carbon capture technology.

Although the use of fossil fuels is often criticized, combining them with CCS could offer a transitional solution that meets rapidly growing electricity demand while mitigating environmental impacts. The question, however, is whether this strategy can withstand increasingly stringent climate targets and regulatory requirements.

With the growing demands of artificial intelligence and cloud technologies, data centers will remain a key issue, shaping not only technological innovation but also global energy policy. The winner of this race will be whoever can strike a balance between speed, sustainability, and economic efficiency.