AI boom will fuel U.S. natural gas demand for years to come, says bp CEO

(Bloomberg) — A surge in energy demand from technology giants that are rapidly developing cloud computing and artificial intelligence — known as hyperscalers — is becoming a major boon for the fossil fuel industry.

That's the view of Murray Auchincloss, CEO of bp Plc, who sees the technology sector’s hunger for reliable energy supplies driving natural gas demand growth in the U.S.

“Hyperscalers are driving crazy demand into natural gas right now,” Auchincloss said on Tuesday during a presentation to investors. “I’m pretty optimistic on natural gas prices through the decade.”

The surge in energy demand from the technology sector in the U.S. is straining the electric grid, parts of which are struggling to provide enough new supply. That’s ignited a debate on whether the AI boom will be positive for the effort to combat climate change or stimulate further investment in the technologies that cause global warming.

So far, the U.S. has been in the lead when it comes to AI, but that demand boom will probably spread to other parts of the world, Auchincloss said. 

“We’ll start to see the hyperscalers really start to move in the U.K. and Europe and other parts of the world a little bit later than the United States,” he said. “If you want to remain competitive in AI, you’ll have to do that. And I think everyone wants to maintain competition in the AI space.”

Bp is well positioned to capitalize on this moment because of its strategy to diversify its portfolio away from just being focused on oil and gas, to one that also provides low-carbon energy, according to Auchincloss. Bp can bundle gas with renewable power, making it an ideal partner for the energy-hungry tech sector, he said.