The global shock to energy from the war with Iran could take months to years to repair, even if fighting stopped today. And if there’s one industry we know is extremely hungry for energy, it’s AI. Natural gas is the most important fuel for the data centers powering the AI boom, and the global market for natural gas has been upended by the conflict. So how much will this shock ripple into the U.S. data center industry?
The U.S. has plenty of its own natural gas. We’re a net exporter. But with global prices rising you’d expect producers to try to export more, reducing the supply at home, said Ken Medlock, who directs the Center for Energy Studies at Rice University.
“However, we have been effectively operating our LNG export capacity at as close to full as possible — we simply cannot export anymore,” Medlock said.
Natural gas has to be liquified before it’s loaded onto ships for transport, and the facilities in the U.S. that do that are maxed out.
“Right now, that cap on capacity basically acts like a wall between the international marketplace and the U.S. marketplace,” Medlock said.
It would take years of investment to expand export infrastructure, and even then, domestic prices for data center energy would likely remain low.
Our gas surplus could end up supercharging demand for U.S. data centers even more, said Ira Joseph at the Center on Global Energy Policy at Columbia.
“You know, rather than building them in the Middle East or in Europe or somewhere else in the world that may or may not have cheap gas,” Joseph said.
But there’s a byproduct of natural gas production that could affect AI, at least in the short term: helium. Yeah, the gas you fill balloons with.
“Helium has a number of unique physical properties that make it indispensable for semiconductor chip manufacturing, which is the largest application for helium,” said helium industry consultant Phil Kornbluth.
Chips are also the single largest budget item for AI data centers. And the plants that manufacture them in South Korea and Taiwan get most of their helium from the Middle East.
“Those first few months before the supply chain gets reconfigured are going to be challenging, and everybody is going to be subject to either price surcharges or price increases,” Kornbluth said.
Kornbluth added that helium doesn’t contribute much to the overall cost of semiconductors, but a lengthy disruption could leave supplies a little light.
