Taken as a means to avoid a "grid reliability crisis"
The Federal Energy Regulatory Commission (FERC) has passed several measures to streamline the construction of natural gas infrastructure across the US.
The decision was taken as a means to avoid a “grid reliability crisis," according to FERC chairman Mark Christie, and support the growth of data centers across the country.
“As the demand for electrical power continues to grow, getting more natural gas generation built is critically important, and that means we must get natural gas infrastructure to supply that generation built more quickly as well, so that we can provide consumers with reliable power,” Christie said.
The actions taken include establishing a process for permanent repeal to avoid delaying natural gas infrastructure projects that FERC has found are needed. In addition, FERC also temporarily raised the cost limits under which natural gas companies are allowed to undertake pipeline modifications or construction without the need for further case-by-case certificate authorization by the commission.
According to the regulatory body, the change will permit natural gas companies to operate with increased flexibility and lessen regulatory burdens for certain activities related to their facilities.
This could act as a significant boon for the data center sector, with utilities and data center operators increasingly turning to natural gas generation to meet the skyrocketing demand for energy from the sector.
A report earlier this year by the Institute for Energy Economics and Financial Analysis found that utilities in Virginia, North Carolina, South Carolina, and Georgia are planning to build more than 20GW of natural gas power plants by 2040. Data center demand is the major driver, especially in Virginia, South Carolina, and Georgia. The report found that, in these states, data centers are responsible for between 65 percent and more than 85 percent of projected growth.
Data centers are also increasingly turning to gas as an off-grid solution. For example, in March, Crusoe announced it had secured 4.5GW of natural gas to power AI data centers in the US.
The streamlining measures follow a trend of regulatory rollbacks since President Trump came into office earlier this year. In the first month of his Presidency, Trump declared a “national energy emergency,” promising to roll back environmental protections and speed up the approval of new fossil fuel projects.
