AI Is Pushing Gas Demand to ‘Record Highs,’ Pipeline Builder TC Energy Says

Tech firms like Amazon and Google ‘have enormous responsibility’ for driving fossil fuel expansions, climate expert argues.
Geoff Dembicki
Geoff Dembicki
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'Never have I seen such strong prospects for North American natural gas demand growth,' TC Energy CEO François Poirier told investors in July.
'Never have I seen such strong prospects for North American natural gas demand growth,' TC Energy CEO François Poirier told investors in July. Credit: TC Energy / YouTube

TC Energy, the Calgary company behind the Coastal GasLink pipeline through Wet’suwet’en First Nation territories in B.C. and the failed Keystone XL oil sands pipeline to Texas, sees a major new growth opportunity for fossil fuels: artificial intelligence.  

Tech firms like Amazon, Google, Meta and Microsoft are building out an international network of data centers to provide the vast computing power for AI. Because those centers require enormous amounts of electricity, with a ChatGPT query using almost ten times more power than a regular Google search, top executives at TC Energy now argue that AI is helping push gas demand to “record highs.”  

“We’re uniquely situated with our assets to support that power demand for these data centers,” Tina Faraca, president of US Natural Gas Pipelines at TC Energy, said during an industry conference last month, referring to the company’s 37,000 miles of pipelines across North America. 

A boom in fossil fuels spurred by the electricity needs of artificial intelligence is not yet guaranteed, given that Amazon and others have vowed to power their data centers with renewable energy. 

But TC Energy is already a customer of Amazon Web Services, using the Seattle-based company’s AI to help streamline its oil and gas operations. If data centers from Amazon and other tech firms in turn end up being powered by gas, then those companies “have enormous responsibility” for accelerating the climate crisis, said Tyson Slocum, director of the energy program at the non-profit organization Public Citizen, which has published reports about the environmental dangers of AI.    

“Big Tech should be held just as responsible as the fossil fuel industry,” he told DeSmog.

A spokesperson for Amazon, Scott LaBelle, wrote in a statement that “Looking ahead, we’ll continue to invest in solar and wind, while also investing in nuclear energy to help power our operations.” LaBelle added, “We know the path forward is changing, and our work to decarbonize our operations won’t be linear, so we’re constantly experimenting, learning, and evolving.”

TC Energy didn’t respond to questions. 

‘Strong Prospects’ for Gas

During a call with investors this summer, TC Energy CEO François Poirier referenced the “strong prospects” that are driving expansions within the gas industry. 

There is a growing market for liquefied natural gas exports, he said, which the company is supplying through projects such as Coastal GasLink. That $11 billion pipeline connects vast gas reserves in northeastern B.C. — which climate experts have called the world’s sixth largest “carbon bomb” — to the Shell-led LNG Canada project on Canada’s west coast. 

“Without the pipeline, we’re a waste of a project,” LNG Canada CEO Jason Klein told a gas conference in September. “There is no gas out there without that pipeline.”

Then there is also an explosion of data centers in places like Virginia, where the energy needs of approved projects could reach 23.4 gigawatts, according to local environmental groups, which is equivalent to the electricity demand of 5.8 million homes. There are about 300 data centers currently operating or under development in Canada.   

“Specifically, about 60 percent of those 300 data centers are within 15 miles of our pipeline system,” TC Energy’s Faraca estimated

The company’s CEO told investors in July that the industry is poised for massive expansions. “Never have I seen such strong prospects for North American natural gas demand growth,” Poirier told investors. “We are seeing natural gas demand reach record highs and this is expected to grow by nearly 40 billion cubic feet per day by 2035.”

Tech Firms Promise Renewables

That outcome isn’t an inevitability, however. Google, Microsoft and Meta promise to be net-zero companies by 2030, a goal they hope to achieve by powering their data centers mostly with renewable energy. Amazon is targeting net-zero by 2040.

Yet data centers are growing so fast — nearly doubling in the U.S. from about 2,700 in 2021 to over 5,300 in 2024 — that they may require electricity beyond what wind, solar and other renewable sources can currently provide. 

With gas and coal still dominating the electrical grid in the U.S. and much of Europe, global carbon emissions from data centers could more than double between 2022 and 2030, a Goldman Sachs analysis stated in May.  

Activists are now targeting tech firms to prevent that from happening. In response to Amazon proposing plans in 2022 to connect its data centers in Oregon to natural gas-powered fuel cells, which in turn could have made the tech company a major customer of TC Energy’s Gas Transmission Northwest pipeline, local climate groups this spring blockaded the company’s Day 1 building in Seattle. 

The company eventually changed its plans, withdrawing its application to use gas. “We are engaging thoughtfully with Oregon policymakers, environmental advocates, and the energy sector to meet our shared goal of clean, carbon-free energy,” Amazon’s LaBelle told DeSmog.

TC Energy said in a statement this June that “it has never discussed or had plans with Amazon to directly deliver natural gas to them.”

Yet the pipeline company remains an active customer of Amazon Web Services. A 2021 case study noted that Amazon was supplying TC Energy with AI technology that helps “boost daily natural gas throughput volume.” Microsoft is also marketing its AI technology to companies like Exxon and Chevron, according to an investigation in The Atlantic.  

Critics argue it could all result in a perverse outcome — tech firms that say they’re committed to solving climate change providing oil companies the tools to produce ever more natural gas, which is then consumed by the data centers required for artificial intelligence.   

“You’re looking at a perfect storm of technology and market events,” Slocum said. “This increase in electricity demand from data centers is going to increase market incentives for more fracking.” 

Geoff Dembicki
Geoff Dembicki is an investigative climate journalist based in New York City. He is author of The Petroleum Papers and Are We Screwed?

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