Chevron (CVX.N) is progressing with plans to meet surging data center power demand, advancing to the permitting and engineering stages for multiple U.S. sites that will integrate power generation, a company executive told Reuters this week.
U.S. data center energy consumption is projected to triple within the next three years as artificial intelligence (AI) development accelerates. Tech giants are securing massive power purchase agreements, including direct deals with nuclear power plants and utilities, to secure the electricity required for rapid expansion.
This rising demand is reshaping the power industry, which is experiencing record-high peak usage after nearly two decades of sluggish growth, and fueling increased natural gas consumption.
Chevron and Exxon Mobil (XOM.N) announced last year plans to enter power generation for data centers, leveraging their natural gas production. Historically, major oil companies have primarily used power generation for internal operations.
“The customer interest is high,” said Daniel Droog, Chevron’s vice president of power solutions, in an interview at the CERAWeek conference in Houston. “It’s really about aligning with data centers that are growing at a rate ahead of the existing power supply.”
While traditional data centers required around 20 gigawatts (GW), new facilities are being built at 50 times that scale, demanding constant power levels equivalent to a mid-sized city.
Chevron aims to develop data center sites with integrated 1 GW power plants, expected to be operational by 2027 or 2028. The company is focusing on scalability, speed, and reliability, targeting locations in the South, Western Interior, and Midwest.
Unlike traditional data centers connected to the grid, Chevron’s facilities will primarily rely on natural gas, with select sites exploring carbon capture technology and renewable energy integration.
Natural gas, once avoided by major tech firms in favor of renewable energy commitments, is gaining traction as a preferred fuel for data centers due to its affordability, availability, and the speed at which gas-fired power plants can be constructed compared to nuclear alternatives.
Chevron has secured seven GE Vernova (GEV.N) gas turbines for delivery in 2026 to support its power generation plans. With turbine backorders extending up to five years, this early procurement positions Chevron advantageously in the growing data center energy sector.