Fossil Fuel Giants Forge Alliance with AI Data Centers, Sparking Climate Concerns
January 3, 2026
The explosive growth of artificial intelligence is triggering an unprecedented surge in electricity demand, creating a new and powerful alliance between the data center industry and fossil fuel companies. As tech giants race to build AI infrastructure, the natural gas sector is positioning itself as the primary power provider, a shift with profound implications for energy markets and climate goals. The trend is exemplified by major oilfield services corporations like Halliburton, whose CEO Jeff Miller remarked on an October earnings call, “The demand for power and for AI is like nothing I’ve ever seen.” This sentiment is driving a strategic pivot across the fracked gas supply chain. Companies from independent drillers like EQT and EOG to integrated giants like Chevron are striking deals to supply gas or build gas-fired power plants for data center hubs. EQT, for instance, has agreements to supply two major Appalachian data center projects with a combined 1.5 billion cubic feet of gas per day—enough, its CEO noted, to power two cities the size of New York. The scale of planned investment is massive. Analysts note that over 100 gigawatts of new gas-fired power projects are in development across the United States, a figure nearly triple the capacity added in the previous five years. This construction boom is a key driver behind a 22 percent expected increase in utility power demand from data centers this year. Natural gas already provides over 40 percent of electricity for data centers globally, according to the International Energy Agency. Tyson Slocum, director of Public Citizen’s Energy Program, observes that while liquefied natural gas exports remain the core profit driver, data centers “provide a significant additional profit cushion” and are “far and away the largest variable that is increasing electricity demand.” This alignment is fortified by federal policy. An executive order issued by the Trump administration in July 2025, “Accelerating Federal Permitting of Data Center Infrastructure,” explicitly prioritizes fossil fuel infrastructure for expedited approval, while omitting wind and solar. Slocum notes that this policy framework, coupled with the administration’s broader deregulatory agenda and close ties to fossil fuel executives, effectively sidelines renewables in the race to power AI. The administration’s energy secretary, former Liberty Energy CEO Chris Wright, has publicly emphasized using emergency powers to sustain coal plants and fast-track new fossil fuel generation for AI. Consequently, major technology firms are recalibrating their energy strategies, often sidelining previous renewable commitments. Meta, for example, is relying on three new gas-fired plants from utility Entergy for a $10 billion data center in Louisiana. This conformity, critics argue, locks in decades of carbon and methane emissions. The production and combustion of natural gas release significant methane, a potent greenhouse gas, and the data center boom is also extending the life of coal plants and diesel backup generators. The environmental burden often falls disproportionately on low-income and minority communities near new infrastructure. While some data center projects incorporate renewables, and their share is projected to grow long-term, the current alliance between AI’s energy appetite and the fossil fuel industry marks a significant departure from tech’s clean energy pledges, posing a major challenge to climate action. Source: truthout
