US Data Centers to Consume More Natural Gas Than Germany and Japan Combined by 2035 Amid AI Boom
TL;DR
- US data centers are projected to burn more natural gas by 2035 than Germany and Japan combined, reaching roughly 13 to 14 billion cubic feet per day as AI workloads explode.
- Gas is becoming the default bridge fuel for AI because it is fast to deploy, reliable 24/7, and grid interconnections for new large loads now face waits of 4 to 7 years.
- The boom is a windfall for US gas producers and pipeline operators but raises serious risks for grid reliability, consumer power prices, and US climate goals.
The Scale of the Surge
The numbers behind America's AI buildout are staggering. According to new forecasts from energy analysts at S&P Global Commodity Insights, Goldman Sachs, and the International Energy Agency released this summer, natural gas burned directly and indirectly to power US data centers will more than triple by 2035.
From an estimated 3.5 to 4.5 billion cubic feet per day in 2024, data-center-linked gas demand is now expected to hit 12.8 to 14.5 billion cubic feet per day by 2035. That is more than the entire current gas consumption of Germany and Japan combined, two of the world's largest LNG importers.
To put it in perspective, that increment alone — roughly 9 to 10 Bcf/d of new demand — is equivalent to adding another California's worth of gas consumption to the US grid in just a decade. Total US electricity demand from data centers is projected to jump from around 200 terawatt-hours in 2024 to more than 700 to 870 terawatt-hours by 2035, with AI training and inference accounting for the lion's share.
Analysts say the US now has more than 130 gigawatts of data center capacity in development, with Texas, Virginia, Ohio, Georgia, Arizona, and the Mid-Atlantic seeing the largest pipelines. Hyperscalers including Amazon, Microsoft, Google, Meta, and OpenAI-backed ventures are signing power deals at a pace never seen before.
Why Gas Is Winning the AI Power Race
In theory, Big Tech wants clean power. In practice, it wants power now. And right now, that means natural gas.
Solar and wind are cheap but intermittent, battery storage at data-center scale remains expensive, nuclear is still years away for most new projects, and coal is being retired. Gas turbines, by contrast, can be permitted and built in 18 to 30 months and run around the clock at a 95% capacity factor.
That speed advantage is critical because the US grid is clogged. PJM, ERCOT, and other major grid operators report interconnection queues stretching 4 to 7 years for large loads over 100 megawatts. In response, tech companies and developers are increasingly going off-grid or behind-the-meter.
The trend has sparked a wave of gas-first deals in 2025 and 2026. Entergy, AEP, Dominion Energy, and Southern Company have announced new gas-fired plants and dedicated supply agreements tied directly to data centers. Turbine makers GE Vernova and Siemens Energy report order backlogs through 2028, with prices up 30% year-over-year. EQT, Expand Energy, Williams Companies, and Kinder Morgan are all positioning new pipelines and net-zero gas supply packages specifically for data center campuses.
Industry executives now openly call natural gas the bridge fuel for AI, expected to carry the load until advanced nuclear, long-duration storage, and expanded transmission arrive in the mid-2030s.
Grid Under Pressure and Power Bills in Focus
Grid operators are warning that AI could strain reliability if buildout outpaces transmission. The North American Electric Reliability Corporation cautioned this year that peak summer and winter margins in PJM, MISO, and ERCOT could tighten sharply by 2028-2030 as data centers add the equivalent of 50 million new homes worth of demand.
PJM's latest capacity auction already cleared at record-high prices, a surge widely blamed on data center load growth in Virginia's Data Center Alley and Ohio. State regulators in Virginia, Georgia, and Ohio are now debating who should pay for billions in new gas plants and transmission upgrades — tech companies or residential ratepayers.
FERC and the Department of Energy under the Trump administration have moved to fast-track gas plant permits and keep existing gas and coal plants online longer for reliability, arguing AI leadership is a national security priority. Critics say that risks locking households into higher bills and decades of fossil infrastructure.
A Climate Collision
The gas boom puts Big Tech's climate pledges on a collision course with reality. Google, Microsoft, Amazon, and Meta have all seen data-center emissions jump 25% to 55% since 2020, largely due to AI, despite pledges to be carbon-neutral or carbon-negative by 2030.
Burning an extra 9 Bcf/d of gas for data centers could add 150 to 200 million metric tons of CO2 per year by 2035, roughly equivalent to putting 35 million new gas cars on the road, unless offset by carbon capture or massive renewable purchases.
Some operators are trying to brand the gas as cleaner — pairing new plants with carbon capture and storage, buying certified low-methane gas from the Marcellus and Haynesville shales, or funding new solar to match consumption. ExxonMobil, Occidental, and EQT have all announced low-carbon gas-to-data-center offerings in recent months. Environmental groups argue those measures fall far short and that methane leaks across the supply chain could erase any efficiency gains.
The IEA now warns the US power sector may miss its 2035 decarbonization trajectory unless data center growth is paired with an equally massive buildout of clean firm power.
Winners in the Gas Patch
For US natural gas producers, the AI frenzy is the best demand story in a generation. After years of boom-bust cycles driven by LNG exports, data centers offer premium, domestic, long-term demand.
Appalachian producers in the Marcellus and Utica, plus Haynesville operators in Louisiana and Texas, are closest to major data center corridors and stand to benefit most. Analysts at Goldman Sachs estimate data centers could account for 25% to 30% of all US gas demand growth through 2035, rivaling LNG exports.
Pipeline and midstream giants are already cashing in. Williams, Kinder Morgan, Energy Transfer, and Targa have announced more than $15 billion in new data-center-linked pipeline expansions since late 2024. US benchmark Henry Hub prices, which languished below $2.50 per MMBtu in 2024, have rebounded above $3.50 to $4.50 in 2026, partly on AI power optimism.
The message from Houston to Pittsburgh is clear: AI runs on gas, at least for the next decade. Whether that keeps America's lights on and its climate goals alive will define the next phase of the energy transition.
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