West Texas Lacks Infrastructure to Convert and Transmit Natural Gas for Growing Data Center Demand

West Texas, a major oil-producing region known for 40% of the nation's crude oil, has abundant natural gas that could power data centers fueling the artificial intelligence industry. However, the region lacks sufficient infrastructure to convert this natural gas, a byproduct of oil extraction, into electricity and transmit it efficiently to meet the surging demand. Industry experts emphasize that meeting this unprecedented energy demand requires expanding pipelines and transmission networks, which currently puts the Permian Basin at a disadvantage compared to other Texas oil basins like Eagle Ford and Haynesville. The competition for natural gas customers is intensifying as high energy consumers, including cryptocurrency facilities and the oil and gas industry itself, increase their consumption. Analysts project that the U.S. will need to add roughly 400 terawatts of energy within five years to satisfy AI-related demand, with Texas's main grid operator forecasting a near doubling of its grid capacity by 2030. Overall, the growing AI sector is driving urgent calls for infrastructure expansion to reliably power data centers and other industries reliant on substantial electricity.