AI could be giving natural gas a second lease on life
The inexorable rise of Artificial Intelligence (AI) is forcing a reassessment of the clean energy transition. Training and running AI models are both energy-intensive processes, adding significantly to the electricity needs of data centers. Despite the widespread use of renewable energy and progress to make processes more energy efficient, demand is expected to grow.
AI’s appetite for energy is colossal. Goldman Sachs estimates that around 47 GW of additional power generation capacity will be needed in the U.S. alone by 2030 to meet the burgeoning demand. They predict that some 60% of this new demand will need to be satisfied by legacy energy sources, most likely natural gas, or 3.3 billion cubic feet of additional incremental demand. This forecasted demand is being driven in large part by data centers, the humming engines driving AI, which require massive quantities of dependable power generation rather than relying on inherently intermittent renewables.
In the U.S., tech companies are planning a constellation of over 2,000 new data centers across the country. These data centres are in some regions reversing the trend towards renewable energy. For example, in Virginia, data center provider Vantage built a 100 MW natural gas power plant entirely off the grid to power its data centers. EQT, one of the largest providers of natural gas in the U.S., is also specifically targeting data centers in Virginia as part of its long-term growth strategy.
The dash for gas is not a U.S.-only phenomenon. Several utility-scale “private wire” agreements have already been struck around the world between natural gas companies and data centers, securing all the power produced by a power plant to a single private client. For example, Microsoft last year gained approval to use its own private wire natural gas-fired power plant to supply electricity for the company’s data centers at its Grange Castle Business Park in Dublin.
Victory Hill does not invest in natural gas in the U.S. However, we invest in a fuel storage terminal for low-sulfur fuel oils that are sold into Mexico. We are also investors in a flexible power natural gas plant in the U.K. that once fully operational will use carbon capture technology to capture over 95% of all its generated emissions.
The likely spike in demand for natural gas is not yet reflected in many models forecasting the energy sector’s transition to a low-carbon future.
The dominant narrative surrounding fossil fuels indicates natural gas functioning as a transition fuel that pushes us toward a future where renewables meet all our energy needs. However, the specific requirements of always-on data centers reveal an important challenge to the notion that natural gas assets will inevitably be stranded.
Current models fail to price in the cost of intermittency and the effect of spikes or falls on the demand for fossil fuels. Some models calculate future lost profits in the upstream oil and gas sector exceeding $1 trillion under plausible changes in expectations about the effects of climate policy.
With the advent of AI, natural gas could become a destination fuel rather than a temporary stopgap.
With an election supercycle this year that will see more than 40% of the world population going to the polls, incoming governments must weigh competing priorities—from squeezed budgets to rising emissions to the race to create ever more powerful AI. It’s a balancing act that will necessitate a change in their approaches to the energy transition to ensure their rulemaking is future-proof.
Similarly, investors rushing to divest from fossil fuels, with the view that this would preserve their clients' wealth, may want to reassess whether this continues to be true, particularly considering the continued demand for, and critical nature of, natural gas within our economy going forward.
The key to this challenge lies in embracing technological advancements. Carbon Capture and Reuse (CCR) technology is available today and can be scaled. It captures carbon emissions from natural gas plants, preventing them from entering the atmosphere. By reusing the captured carbon for various industrial processes, CCR creates a win-win scenario for both energy security and climate goals.
CCR commercially incentivizes power companies to create the most efficient carbon capture technology with minimal leakage when capturing and reselling carbon. Carbon dioxide is an in-demand industrial gas with a ready global market, used in everything from food production to brake pads. It can also be used to create lower-emission fuels such as methanol to bring down emissions in the transport sector.
We believe that the path to a clean energy future does not lie in a one-size-fits-all solution. It lies in a complex network with multiple players, each with its strengths and weaknesses. Natural gas, coupled with CCR, can be a vital bridge on this journey. It can ensure both energy security and the reliable power needed for AI innovation.
This doesn't downplay the importance of renewables. Solar and wind remain essential pieces of the clean energy puzzle. The ideal scenario lies in a diversified energy mix, where renewables take the lead whenever possible, with natural gas stepping in to fill the gaps and ensure a stable, reliable grid
https://fortune.com/2024/10/03/ai-natural-gas-demand-data-centers-finance-tech-environment-energy/
*******************************************An inconvenient truth: nuclear energy is cleaner and cheaper
Largely buried by a media that peddles climate alarmism was a key report from the US Department of Energy – yes, from Joe Biden’s officials – debunking the myth that renewables are the cheapest form of emissions-free electricity. The US report completely contradicts Chris Bowen’s constant assertion that the CSIRO’s “levelized cost of electricity” proves that emissions free nuclear power is much more expensive than firmed renewables.
The US report states that “levelized cost of electricity does not capture the full benefits of nuclear as a clean, firm resource. These include the value of an 80-year operating asset, the value of firm generation to provide power during key periods of grid need or when other variable resources are not generating, and the value of clean electricity relative to carbon emitting resources”.
Using modelling based on the experience of California, the report says that the cost, per megawatt-hour of renewables and storage ONLY, ranges from $129 to $150 – while the cost of renewables and storage WITH nuclear is just $80 to $94. In other words, using nuclear makes electricity 37 per cent less expensive.
It was always absurd of the Albanese government to insist that nuclear power is cost-efficient at sea (in our nuclear-powered subs) but prohibitively expensive on land. Now that this authoritative costing has emerged from Biden’s America, its clear that green ideology is the only thing stopping us from repealing the ban on civil nuclear power.
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Data centre emissions are soaring – it’s AI or the climate
Artificial intelligence (AI) is curating your social media feed and giving you directions to the train station. It’s also throwing the fossil fuel industry a lifeline.
Three of the biggest tech companies, Microsoft, Google and Meta, have reported ballooning greenhouse gas emissions since 2020. Data centres packed with servers running AI programs day and night are largely to blame.
AI models consume a lot of electricity, and the World Economic Forum estimated in April that the computer power dedicated to AI is doubling every 100 days. Powering this boom in the US, where many AI tech pioneers are based, have been revitalised gas power plants once slated for closure.
First, what actually is AI?
AI sucks (power and water)
“At its core, the kind of AI we are seeing in consumer products today identifies patterns,” say Sandra Peter and Kai Riemer, computing experts at the University of Sydney.
“Unlike traditional coding, where developers explicitly program how a system works, AI ‘learns’ these patterns from vast datasets, enabling it to perform tasks.”
While AI programs are being “trained” and fed huge sums of data over several weeks and months, data processors run 24/7. Once up to speed, an AI can use 33 times more energy to complete a function than traditional software.
In fact, a single query to an AI-powered chatbot can consume ten times as much energy as a traditional Google search according to Gordon Noble and Fiona Berry, sustainability researchers at the University of Technology Sydney.
“This enormous demand for energy translates into surges in carbon emissions and water use, and may place further stress on electricity grids already strained by climate change,” they say.
Data centres are thirsty as well as power-hungry: millions of litres of water have to be pumped to keep them cool.
These enormous server warehouses are vying with people for an increasing share of power and water, a situation which could prove deadly during a heatwave or drought.
Noble and Berry argue. One survey showed that just 5% of sustainability professionals in Australia believed data centre operators provided detailed information about their environmental impact.
Its fierce appetite aside, AI is feted as a Swiss army knife of fixes for our ailing planet.
AI’s ability to process mountains of data means it could spot the warning signs of a building storm or flood and track how the environment is changing say Ehsan Noroozinejad and Seyedali Mirjalili, AI experts at Western Sydney University and Torrens University Australia respectively.
“For example, it can reportedly measure changes in icebergs 10,000 times faster than a human can,” they add.
Kirk Chang and Alina Vaduva, management experts at the University of East London, highlight hopes that AI might make simulations of Earth’s climate more accurate.
AI could closely monitor an entire electricity grid and coordinate generators so that they waste less energy while meeting demand. AI models could identify materials for sorting in a recycling facility and analyse air pollution to pinpoint its sources. On farms, AI systems could track weather and soil conditions to ensure crops receive only as much water as they need.
However, AI’s claims to efficiency are sadly undermined by a well-worn problem. When humanity makes an activity more efficient through innovation, the energy or resource savings are generally ploughed into expanding that activity or others.
“The convenience of an autonomous vehicle may increase people’s travel and in a worst-case scenario, double the amount of energy used for transport,” says Felippa Amanta, a PhD candidate in digital technologies and climate change.
And while there is value in imagining what AI might help us do, it is important to recognise what it is already doing. An investigation by Scientific American found AI was deployed in oil extraction in 2019 to substantially increase production. Elsewhere, targeted advertising that uses AI creates demand for material goods. More mass-produced stuff, more emissions.
Does our answer to climate change need to be high-tech?
During a climate disaster like Hurricane Helene, which claimed more than 150 lives in the south-eastern US over the weekend, a reliable power supply is often the first thing to go. AI can be of little help in these circumstances.
Low-tech solutions to life’s problems are generally more resilient and low carbon. Indeed, most of them – like fruit walls, that used renewable energy to grow Mediterranean produce in England as early as the Middle Ages – have been around for a very long time.
“‘Low-tech’ does not mean a return to medieval ways of living. But it does demand more discernment in our choice of technologies – and consideration of their disadvantages,” says Chris McMahon, an engineering expert at the University of Bristol.
“What’s more, low-tech solutions often focus on conviviality. This involves encouraging social connections, for example through communal music or dance, rather than fostering the hyper-individualism encouraged by resource-hungry digital devices.”
https://theconversation.com/data-centre-emissions-are-soaring-its-ai-or-the-climate-240137
***********************************************ONS Reveals the Pitiful Number of New Green Jobs Being Created in the U.K. Economy
The problem with the green U.K. economy, and its associated destruction of the hydrocarbon environment, is that there are very few jobs being created.
The few remaining ‘workers’ in the ruling Labour party are starting to rumble all the luxury boondoggles that are set to further decimate well-paid jobs in their communities.
The figures compiled by the Office for National Statistics (ONS), trying to estimate the actual number of green jobs, are always a highly creative hoot, and the latest batch are no exception. Many jobs identified are simply displacement activity, with one repair or maintenance occupation taking over from another.
Around 6% of the total are to be found in ‘environmental charities’, an interesting way to describe elite billionaire political funding to push the Net Zero fantasy.
Such is the seeming desperation to rustle up a green job, the ONS even includes repairing home appliances, controlling forest fires and separating hydrogen by carbon dioxide-producing electrolysis.
The latest ‘estimates’ from the ONS cover 2021 and 2022, and they are said to show an increase in both years. But as the graph below reveals, the rises are pitiful over a decade, and the 2022 estimate of 639,000 is less than 2% of jobs in the economy as a whole.
As can be seen, environmental charities employ 40,000 people, almost as many as the 47,000 that work in renewable energy.
But the charities figure does not include all those make-work jobs in environmental consultancy and education or what is described as in-house environmental activities.
If all the displacement, invented or re-badged jobs in repair, electric vehicles, waste disposal, water treatment, energy efficiency, Net Zero promotion, teaching and the ubiquitous bureaucracy are rightly ignored, it is unlikely that more than 150,000 new jobs have been created.
Fairly small pickings, it might be thought, from all the cash sprayed at subsidy-hunting chancers over at least two decades. Even worse, any new jobs are easily offset by the occupations being destroyed in steel making, refining hydrocarbons, coal mining and oil and gas exploration.
Fracking for gas would transform a number of deprived areas in the U.K. at little environmental cost, as it has done in the U.S. Energy security would likely be achieved, and the tax take would be considerable. But fracking is anathema to the major political parties in the U.K., except the emerging Reform party.
Last week saw some real push back on the madness of Net Zero and the so-called green economy.
The boss of GMB, the third largest trade union in the country, told the annual Labour party conference that its plans to decarbonise the energy network by 2030 will cost up to one million jobs, decimate working communities and push up bills for the poorest. According to Smith, Government’s plans for Net Zero were “bonkers” and “fundamentally dishonest”.
In a week when it was revealed that British consumers, both industrial and private, had some of the highest electricity prices in the developed world, he charged that current energy policy amounted to virtue signalling by politicians.
He accused them of exporting jobs and importing virtue because the jobs were being created abroad rather than in the U.K.
Meanwhile, a recent paper published in Science came to a damning conclusion that will not surprise sceptics, namely that 96% of climate policies over the last 25 years, ultimately designed to reduce carbon dioxide emissions, have been a waste of money.
“That’s where green spin has got us,” writes George Monbiot, although these days the Guardian’s extremist-in-chief seems to have given up on all life enhancing processes that run the risk of disturbing anything on the planet.
“Finally, 15 years and a trillion dollars too late, George Monbiot says what sceptics have been saying all along,” observes the sceptical journalist Jo Nova. “Nearly every single carbon reduction scheme is a useless make-work machination that creates the illusion that the government is doing something,” she says.
As we can see, the ONS survey is full of these make-work schemes providing jobs that can only exist by rigging free markets and providing eye-watering subsidies from consumers and taxpayers.
As the more concerned trade unionists can see, much of the cost of these fantasy ventures falls on the poorest members of society forced to pay higher prices for many of the basic essentials of life.
In addition, as we have observed, most green schemes make mugs of the wider investing public, with the RENIXX, a stock capitalisation global index of the 30 largest renewable industrial companies, showing near zero growth since it was started in 2006.
None of this matters, of course, to the Mad Miliband and his weird wonks at the U.K. Department of Energy, who are ramping up ideological plans to hose cash at daft ideas like carbon capture, battery energy storage and hydrogen production.
But all is not lost on the jobs front – opportunities must be taken when they occur. Earlier this year, Gary Smith was able to point to some new employment clearing away the animal casualties of wind farm blades. “It’s usually a man in a rowing boat, sweeping up the dead birds,” he observed.
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