Introduction

The rapid expansion of U.S. data centers under pressure from AI-driven compute demands is reshaping the nation's energy outlook. New projections suggest these facilities could soon surpass the combined natural gas consumption of Germany and Japan by 2035, highlighting the growing intersection between big tech infrastructure and fossil fuel reliance.

What Happened

A recent BloombergNEF analysis forecasts that U.S. data centers will require roughly 18 billion cubic feet of natural gas per day by 2035—nearly double the organization's estimate from just nine months prior. This surge positions data centers as the second-largest driver of natural gas demand growth in the country, trailing only liquefied natural gas exports. The report accounts for the reality that not every announced project will be completed, but the momentum is clear. In recent months, major tech companies including Meta, Microsoft, Google, and Amazon have announced plans for on-site natural gas power plants that bypass the public grid, collectively projected to use between 2.9 and 3.4 billion cubic feet daily by 2035—an amount roughly equivalent to today's total data center gas usage, including grid-sourced power. However, BloombergNEF emphasizes that the bulk of demand growth will come from grid-connected facilities, which are expected to add approximately 15 billion cubic feet per day by the middle of the next decade—five times the projected growth across all other grid-connected sectors combined.

Why This Matters

If these projections materialize, natural gas prices could face upward pressure, especially alongside rising LNG export volumes. Analysts at Noreva warn that the combined impact of a data center boom and expanded LNG shipments may create price spikes that tech companies' balance sheets might absorb, but utility ratepayers likely cannot. From a climate perspective, the additional daily demand translates to approximately 1 million metric tons of greenhouse gas emissions—about 12% of total U.S. emissions today. Since burning a single cubic foot of natural gas carries an estimated 60 grams of CO2 equivalent when accounting for extraction, processing, and distribution, the scale of new data center infrastructure represents a meaningful climate consideration beyond the tech sector's direct operations.

Key Takeaways

  • Data centers are on track to consume more natural gas than Germany and Japan combined within the next decade.
  • A significant portion of the projected growth stems from grid-connected expansion rather than high-profile on-site projects.
  • Major tech investments in direct natural gas infrastructure represent only a fraction of total expected demand.
  • The climate implications are substantial: daily emissions from new demand could account for roughly 12% of current U.S. greenhouse gas output.
  • Upward pressure on natural gas prices is a realistic risk, especially if export growth and data center expansion coincide.

Conclusion

The forecast underscores that the AI industry's energy appetite is not abstract—it has tangible effects on fuel markets, climate goals, and consumer costs. As data center construction accelerates, the coming years will likely determine whether the sector pivots toward renewable-backed power sources or leans further into fossil fuels, a choice that will shape the energy landscape and determine whether these projections become cautionary benchmarks or manageable outcomes.