As the race to develop artificial intelligence (AI) gains momentum, energy supply is emerging as a critical area of focus. Major oil companies like Exxon Mobil and Chevron are entering the fray, pivoting from traditional fossil fuel business models to accommodate the energy demands ushered in by expansive AI technologies. With increasing expectations for performance, those in the tech sector are finding themselves in need of reliable and potent energy sources to power their data centers efficiently.
Exxon has recently announced its intention to construct a new natural gas facility specifically designed to supply energy to a data center. This move underscores a significant shift in strategy for oil majors; they are now viewing their expertise in traditional energy production through the lens of the burgeoning tech industry. Exxon’s Chief Financial Officer, Kathryn Mikells, emphasized this initiative as a methodical approach to merge high reliability with low carbon output, catering to the escalating demands for computational power.
Integral to Exxon’s strategy is a robust investment in carbon capture and storage (CCS) technology. The oil giant has developed a substantial network of pipelines along the Gulf Coast, designed to transport CO2 from various industrial sources to designated storage locations, thus facilitating a greener approach to energy generation. The goal of capturing and storing up to 90% of emissions from the planned natural gas plant signifies a concerted effort to reconcile fossil fuel usage with environmental sustainability.
By 2050, Exxon estimates that decarbonizing AI-related energy consumption could constitute up to 20% of its total market for carbon capture capabilities. This perspective reflects an understanding of the tech industry’s need for cleaner energy, positioning Exxon as a potential leader in this transformative landscape.
Chevron is also making strides in this energy evolution, with its President of New Energy, Jeff Gustavson, highlighting its readiness to participate in empowering data centers. As a significant natural gas producer, Chevron has both the infrastructure and land assets necessary to support the establishment of these facilities. However, unlike Exxon, Chevron’s plans are still in development, and firm commitments are yet to be revealed.
While technology firms like Alphabet, Amazon, Microsoft, and Meta have traditionally leaned towards renewable energy sources like wind and solar, the substantial surge in energy requirements linked with AI is prompting reconsideration of energy procurement. These firms are now exploring nuclear energy options, citing reliability concerns with renewables, particularly amid unpredictable weather patterns.
In light of the unsustainable demands placed on renewable energy sources, the tech industry is turning its gaze toward nuclear power. Historically slower to embrace this form of energy due to safety and operational concerns, companies are now forging alliances to advocate for modern nuclear technologies. For instance, Microsoft is engaged in revitalizing the Three Mile Island facility, while Amazon and Google are investing in next-generation small nuclear reactors. Meta has even invited proposals for new nuclear power plants to support its energy needs.
Nevertheless, skeptical voices within the fossil fuel sector argue that the long timelines associated with nuclear development make it impractical for immediate energy demands. Exxon’s CEO, Darren Woods, expressed doubts regarding nuclear power’s viability in the near term, illustrating that reliance on this energy source may not meet the urgent needs of the AI boom.
Oil majors are not only staking their claims in the AI energy sector; they also recognize the opportunity for collaborative partnerships with tech companies. Exxon aims to leverage its extensive experience in large-scale project execution to assist in establishing the required energy infrastructure for data centers, highlighting a symbiotic relationship where both industries can benefit.
As artificial intelligence propels the demand for energy to new heights, the crisp divide between traditional fossil fuel systems and modern tech solutions is blurring. By embracing technological innovation—both through carbon capture initiatives and strategic energy partnerships—Exxon Mobil and Chevron are positioning themselves as front-runners in this evolution of energy supply, proving that oil giants can adapt and play pivotal roles in shaping the future of sustainable energy for the tech industry.