Chevron exec says data center gas plans "moving very quickly"
Chevron's young business to build gas-fired plants that directly supply data centers is "moving very quickly," and final agreements with hyperscalers could come soon, Chevron New Energies president Jeff Gustavson tells Axios.
Why it matters: Chevron's — and rival Exxon's — plunge into behind-the-meter power for data centers shows how the oil supermajors are moving to capitalize on AI's powerful energy thirst.
"There's no reason the U.S., with its large, abundant natural resources, natural gas in particular, can't win this [AI] race," he said in an interview.
Catch up quick: In January, Chevron and investment firm Engine No. 1 unveiled a partnership to deploy gas plants co-located with big data centers starting in 2027, using GE Vernova turbines.
They envision up to four gigawatts eventually being deployed and are targeting the Southeast, Midwest and West.
Driving the news: "If I were to highlight one state that we're really focused on in particular, it'd be Texas," he said, citing attributes like gas availability and state and local regulatory environments.
It also has carbon storage potential for the projects, which could integrate climate tech in the future like CO2 capture and use of hydrogen in turbines.
"Customers want a lower carbon pathway," he said.
The intrigue: Gustavson noted Trump officials support enabling new power for AI.
But Chevron's also watching the fluid tariff situation closely for how it could affect costs and equipment procurement timelines.
"It introduces some uncertainty here," he said.
The big picture: Chevron New Energies houses the energy giant's business lines on hydrogen, CO2 capture and storage, biofuels, and its exploration of opportunities in geothermal and lithium.
Threat level: The House reconciliation plan to quickly end hydrogen tax credits could slow Chevron's plans, Gustavson said.
"The cost of low-carbon or no-carbon hydrogen will be higher without that incentive. And so then it's basic supply and demand. When the price of something is higher, the demand is lower, and the pace of adoption will be slower," Gustavson said.
He noted the lack of production incentives will make costs higher for customers.
"We need to be able to generate a return to invest in anything in this space or any space. If you don't have customers that are willing to pay the price that we need, it will slow some of these projects."
What we're watching: The next phases of the data center plan.
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