US Data Centers to Outgas Germany and Japan by 2035
BloombergNEF estimates US data centers will burn 18 billion cubic feet of natural gas daily by 2035, a volume that exceeds the combined national consumption of Germany and Japan.
US data centers are projected to consume more natural gas than the entirety of Germany and Japan by 2035, according to a new report from BloombergNEF. The forecast estimates daily consumption at 18 billion cubic feet, a figure that nearly doubles the organization’s prediction from nine months ago. This surge positions data centers as the second-largest driver of natural gas demand growth in the US, trailing only liquefied natural gas exports.
The acceleration in demand is driven by major technology firms including Meta, Microsoft, Google, and Amazon. These companies are bypassing the traditional grid by installing on-site natural gas power plants to meet the energy requirements of their expanding AI infrastructure. While this strategy secures immediate power for individual facilities, it contributes significantly to the broader national consumption of fossil fuels.
Grid-Connected Facilities Drive Majority of Growth
Contrary to recent headlines focusing on on-site generation, grid-connected facilities will account for the bulk of the demand increase. BloombergNEF predicts these facilities will drive an additional 15 billion cubic feet per day of consumption by the mid-2030s. This represents five times the demand growth expected from all other grid-connected sectors combined over the same period.
On-site plants are expected to consume between 2.9 and 3.4 billion cubic feet per day by 2035. This volume is comparable to the total current consumption of all data centers, including those powered by the grid. The shift reflects a strategic decision by hyperscalers to decouple their energy security from grid volatility and capacity constraints.
Price Volatility and Ratepayer Risks
The current buildout relies on stable natural gas prices, a condition that may not persist. Analysts at Noreva warn that the combined impact of the data center boom and rising LNG exports could cause prices to soar. While tech companies possess balance sheets capable of absorbing such costs, utility ratepayers may face significant financial strain if these costs are passed through to residential and commercial consumers.
Substantial Increase in Carbon Emissions
The environmental impact of this energy shift is severe. According to the IEA, burning one cubic foot of natural gas releases the equivalent of 60 grams of carbon dioxide. The additional daily demand from data centers will generate one million metric tons more greenhouse gas pollution. This figure represents approximately 12% of total US greenhouse gas emissions today, highlighting the tension between AI expansion and climate targets.
Market participants should note that these figures are based on BloombergNEF projections, which account for the likelihood that not all announced projects will be completed. The data underscores a structural shift in US energy consumption patterns, where digital infrastructure becomes a primary consumer of fossil fuels. This trend is consistent with the broader energy-stocks narrative linking tech growth to commodity demand.
Data center gas demand to double forecasts
A new analysis from BloombergNEF indicates that US data centers will reach a consumption level of 18 billion cubic feet of natural gas per day by 2035. This projection marks a significant increase, as it is nearly double the estimate provided by the same organization just nine months ago.
The updated figures account for the likelihood that not all currently announced projects will be completed, yet the trajectory remains steep. This growth is driven by both on-site power generation plans from major tech firms and a surge in grid-connected demand, positioning data centers as the second-largest driver of natural gas growth after LNG exports.
