The global race to develop artificial intelligence (AI) has intensified to such a degree that U.S. data centers—massive facilities that store and process digital information—are projected to consume more natural gas than both Germany and Japan combined by 2035. According to a new report from BloombergNEF, data centers will be the second-largest driver of natural gas demand growth in the U.S. over the next decade, following liquefied natural gas (LNG) exports. The report estimates that these centers could consume about 18 billion cubic feet of natural gas per day by 2035, nearly double the previous forecast from just nine months ago. This revised projection accounts for the fact that not all planned data center projects will be completed. Recent months have seen growing media attention on data centers that generate their own power, often using natural gas. Major tech companies like Meta, Microsoft, Google, and Amazon have announced plans to build on-site natural gas power plants, bypassing the traditional electrical grid. These projects are expected to consume between 2.9 billion and 3.4 billion cubic feet of natural gas per day by 2035—roughly the same amount that all data centers currently use, including the natural gas used to power the grid. However, BloombergNEF suggests that these on-site powered data centers will likely represent only a small portion of the overall increase in demand. In addition to on-site powered data centers, grid-connected facilities are expected to contribute significantly to natural gas consumption. By the middle of the next decade, these data centers could drive an additional 15 billion cubic feet of natural gas demand per day from the power sector. To put this into perspective, this amount of growth would be five times greater than the combined demand growth from all other grid-connected sectors through 2035. If this surge in demand occurs, it could lead to a significant rise in natural gas prices. While tech companies may be financially prepared for such a shift, consumers who pay for electricity through utility companies may not be as well-equipped to handle the increased costs. The environmental impact of this growing demand is also a major concern. According to the International Energy Agency (IEA), burning one cubic foot of natural gas releases about 60 grams of carbon dioxide into the atmosphere, including emissions from extraction, processing, and distribution. The increased use of natural gas by data centers is expected to result in an additional 1 million metric tons of greenhouse gas emissions per day—equivalent to about 12% of the United States’ total greenhouse gas emissions today. This highlights the potential environmental trade-offs of the data center boom.