Half of proposed US data centers face delays, energy firm says

Investing.com -- Up to half of planned data centers in the United States may face delays or cancellations due to political opposition and construction challenges, according to Kimmeridge Energy Management Co.

Ben Dell, managing partner and co-founder of Kimmeridge, said Wednesday that the technology industry's expansion plans are encountering real-world infrastructure limitations. He made the comments during an interview at Bloomberg News headquarters in New York.

Kimmeridge owns stakes in natural gas producers and Commonwealth LNG, a planned export terminal in Louisiana. The firm expects delays to data center projects will likely lead to lower forecasts for US gas demand, even as new power plants are built to supply electricity for artificial intelligence operations.

US natural gas producers have anticipated that AI growth will increase consumption of the fuel, which has traded at relatively low domestic prices for most of the past decade due to oversupply from fracking operations. Opposition to data centers from investors and the public is creating additional challenges for the natural gas sector.

Dell said that while most of the expected 30 billion cubic feet per day growth in US gas demand will come from liquefied natural gas exports, data centers could drive 5 billion to 10 billion cubic feet per day of additional consumption. Delays may push AI-related consumption toward the lower end of that range.

Opposition to data centers is growing across party lines in states including Pennsylvania, Texas and Ohio, which previously appeared more receptive to such projects, Dell said. The issue is becoming a factor in the upcoming US midterm elections, with local-level resistance and legal challenges adding to project risks.

Dell said an ideal data center proposal would have no net impact on water usage, land, emissions or power prices.

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