Chevron is making a bold move into data center power generation, targeting locations with natural gas access and carbon capture infrastructure. This strategy, revealed by Chevron CEO Mike Wirth at the CERAWeek energy conference by S&P Global, aims to support the AI boom while reducing carbon intensity.
Wirth emphasized the importance of location, stating,“One of the criteria in site selection will be access to gas. It will also be proximity to carbon capture and storage capacity, access to renewables, potentially off the grid, access to geothermal or potentially hydrogen, so we’re looking for ways to reduce the carbon intensity over time.”
Chevron plans to develop off-grid power facilities across key U.S. regions, including the Southeast, Midwest, and West, ensuring reliable energy while reducing dependence on the existing power grid.
In January 2025, Chevron announced a major partnership with Engine No. 1 LP and GE Vernova. Together, they will develop gas-fired power plants tailored for U.S. data centers.
These “power foundries” will feature GE Vernova’s 550-MW 7HA gas turbines, generating up to four gigawatts of electricity—enough to power up to 3.5 million U.S. homes. The project is set to begin energy production by late 2027, with initial deliveries starting in 2026.
Chris James, founder of Engine No. 1, highlighted the crucial role of energy in AI growth, stating:“Energy is the key to America’s AI dominance. By using abundant domestic natural gas to generate electricity directly connected to data centers, we can secure AI leadership, drive productivity gains across our economy and restore America’s standing as an industrial superpower. This partnership with Chevron and GE Vernova addresses the biggest energy challenge we face.”
These gigawatt-scale power solutions will help AI-driven data centers quickly deploy dependable energy sources. While the initial setup is off-grid, future grid integration is possible, reducing strain on consumer electricity prices.
A critical element of Chevron’s energy strategy is integrating carbon capture and storage (CCS). The power plants will be equipped with CCS technology, capable of capturing up to 90% of CO2 emissions from gas turbines.
Additionally, these facilities may incorporate renewable energy sources such as solar, wind, and hydrogen, further reducing carbon intensity over time.
The Net Zero Emissions (NZE) Scenario forecasts a 30% decline in global gas demand by 2030, dropping to 3,300 bcm. By 2050, demand is expected to fall 70% from 2021 levels, with 40% of remaining gas use dedicated to hydrogen production with CCUS.
To maintain long-term supply stability, investments in CCUS technology are projected to reach $200 billion per year until 2030, then $85 billion annually. By 2050, CCUS could capture 6.2 Gt of CO₂, helping cut emissions in hard-to-decarbonize industries, including cement and data centers.
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With AI and cloud computing consuming massive amounts of electricity, securing stable power sources has become critical. Traditional grid-based energy systems struggle to keep up, leading companies to seek direct energy solutions.
According to S&P Global, analysts predict that U.S. data centers could increase gas demand by 3-6 Bcf/d by 2030. The exact role of gas in this expansion is uncertain, as renewable energy investments may also contribute to meeting this demand.
Chevron’s natural gas production is already surging. In Q4 2024, the company averaged 2.74 Bcf/d, reaching 2.68 Bcf/d for the full year, a 27% increase from 2023.
The Permian Basin remains a key production hub, generating 20.5 Bcf/d in 2024, an 80% increase over five years. Projections suggest Permian output could exceed 24 Bcf/d by 2028, securing its role in North America’s energy mix.
Chevron’s entry into behind-the-meter power generation signals a major shift in energy infrastructure. This transition goes beyond AI, driving a broader movement toward localized power production.
The partnership with Engine No. 1 and GE Vernova is expected to create thousands of jobs, accelerating U.S. reindustrialization. Additionally, Chevron’s power plants will sell excess electricity back to the grid, improving energy stability.
According to Chevron’s sustainability report, the company is investing $8 billion in lower-carbon energy projects from 2021 to 2028. The focus areas include renewable fuels, carbon capture, hydrogen, and offsets. Chevron has also committed $2 billion to reduce 4 million metric tons of emissions annually within its operations.
Chevron’s move into AI-driven energy solutions places the company at the forefront of energy innovation. By merging energy security with carbon reduction, Chevron is reshaping the U.S. energy landscape—and setting the stage for a more sustainable future.
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