US data centers could consume more natural gas than Germany and Japan combined by 2035

A new report from BloombergNEF projects that, driven by the intensifying race to build AI infrastructure, US data centers will by 2035 consume more natural gas than Germany and Japan combined. Data centers are expected to become the second-strongest driver of natural gas demand growth over the next decade, trailing only LNG exports.

Consumption could reach 18 billion cubic feet per day

The facilities could consume about 18 billion cubic feet of natural gas per day by 2035, nearly double what BloombergNEF forecast just nine months earlier. The updated projection accounts for the likelihood that not every announced data center project will actually be completed.

Data centers that generate their own power on site, bypassing the electrical grid, have drawn significant attention recently. Meta, Microsoft, Google, and Amazon have all announced plans to build new natural gas power plants for this purpose. Such projects are expected to consume between 2.9 billion and 3.4 billion cubic feet of gas per day by 2035 — roughly equal to what all data centers, including grid-powered ones, consume today.

However, on-site power generation represents only a fraction of the overall projected demand growth. BloombergNEF expects grid-connected data centers to drive an additional 15 billion cubic feet per day of natural gas demand in the power sector by the mid-2030s — five times the demand growth expected from all other grid-connected sectors combined through 2035.

Potential impact on prices and climate

If this demand growth materializes as forecast, it could push natural gas prices higher. Much of the current data center buildout has relied on the assumption of stable gas prices, which have held steady in recent years. Analysts at Noreva warn this assumption may not hold, as the combined effect of the data center boom and rising LNG exports could send prices sharply higher — a burden tech companies may be able to absorb, but one that ordinary utility customers may struggle with.

The additional gas demand from data centers is expected to generate roughly 1 million metric tons of extra greenhouse gas emissions per day, equivalent to about 12% of total US greenhouse gas emissions today.