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Data Centers Are the New Oil Wells—Chevron and ExxonMobil Are Already Drilling
03/19/2025
Chevron Pushes Into Data Center Power as Big Tech Drives Energy Demand Surge
Chevron is making a major push into power generation for data centers, advancing permitting and engineering for multiple U.S. sites that will supply electricity directly to these energy-hungry facilities. As artificial intelligence (AI) development accelerates, data center power demand is expected to triple in the next three years.
Speaking at the CERAWeek energy conference in Houston, Daniel Droog, Chevron’s Vice President of Power Solutions, confirmed that the company is targeting large-scale power development projects, primarily fueled by natural gas, to meet the surging demand from Big Tech.
"The customer interest is high," Droog said. "We’re really focused on scale, speed, and reliability to match the rapid expansion of data centers."
The Data Center Power Boom
Traditionally, data centers required around 20 gigawatts (GW) of power, but new facilities are now being built at 50 times that scale, consuming as much electricity as an entire mid-sized city in a single location.
To meet this demand, tech giants are striking unprecedented power purchase deals, including:
- Buying electricity directly from nuclear plants
- Partnering with utilities to bring new generation capacity online
- Exploring alternative energy sources, including natural gas and carbon capture
This explosive growth is reshaping the U.S. power industry, which had stagnated for nearly two decades before this new surge in demand.
Chevron’s Plan: Gigawatt-Scale Power Plants by 2027-2028
Chevron is developing data center sites with dedicated power plants, each with a capacity of around 1 GW, set to come online by 2027 or 2028. These facilities will primarily be off-grid, ensuring direct and uninterrupted power supply to data centers.
Droog did not disclose specific locations or customers but confirmed that Chevron targets regions in the South, Western Interior, and the Midwest for these projects.
Chevron has already ordered seven GE Vernova gas turbines, scheduled for delivery in 2026, to support its power generation plans. Due to the long lead times on turbine orders—some companies report waits of up to five years—securing equipment early has become a critical step for energy developers.
Big Tech’s Shift Toward Natural Gas
For years, Big Tech companies pledged to shift to 100% renewable energy, but the rapid growth of AI and cloud computing has forced them to reconsider their power strategies.
Natural gas is emerging as a practical alternative because:
- It is cheap and abundant in the U.S.
- Gas-fired plants can be built faster than nuclear or large-scale renewable projects
- It provides 24/7 electricity, unlike intermittent solar and wind power
Once committed to carbon-free energy, many tech giants are now turning to gas-fired generation as a quick and reliable solution to power their AI-driven expansion.
Microsoft: Wind and Solar Still Have Room to Grow
Despite the growing interest in natural gas, Microsoft Vice President of Energy Bobby Hollis emphasized that wind and solar still have significant room to expand powering data centers.
Speaking at CERAWeek, Hollis pointed to:
- The Midwest wind corridor as a prime location for wind-powered data centers
- The sunny Southwest as an opportunity for further solar expansion
"We still think there is a long road ahead that keeps renewables an important part of the mix," Hollis said.
Microsoft has pledged to be carbon-negative by 2030 and is currently amid a $80 billion global data center expansion, requiring vast quantities of electricity. The company has procured over 30 GW of renewable power worldwide but acknowledges that natural gas may still play a role where necessary.
"Let’s add more gas when it’s necessary," Hollis said. "But before we ever get to that place, let’s make sure we’ve added the renewables."
The Future of Data Center Power: Renewables vs. Fossil Fuels
As AI and cloud computing continue to fuel an unprecedented electricity demand surge, the energy industry is at a crossroads:
- Will Big Tech double down on natural gas to meet its growing needs?
- Or will wind, solar, and battery storage scale fast enough to power the next generation of data centers?
With oil majors like Chevron and ExxonMobil entering the power business, the lines between Big Tech, Big Oil, and the energy sector are blurring more than ever before.
The next few years will determine whether renewables can scale fast enough or if fossil fuels will remain the backbone of the digital economy.
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