Look out Cleveland
You might be tired of reading about AI developments around here, but if so you’ll need to get over that – it really is one of the biggest stories in energy. The past 8 months or so have been astounding. There are many perspectives from which to view this, many of which are simply crazy, but some leniency is warranted there – no one has any idea where AI is going to take us or itself, and it is hard to call any prognostication too outlandish.
What isn’t crazy though are the tectonic shifts in energy demand happening quicker than anyone could have imagined a scant year ago.
Consider a company called Digital Bridge, one of the bigger global data center players. In their Forecast 2023 corporate presentation, issued early in 2023, they mention the following growth drivers: cloud applications, growing enterprise outsourcing, and the accelerating pace of data creation (autos, # of connected devices (Internet of Things)) as the main drivers. Again, that was January 2023. No mention of AI.
By mid-year 2023, they were talking about AI, a lot, highlighting in their updated presentation that generative AI adoption is the fastest on record. For example, it took Instagram about 18 months to hit 100 million users, ChatGPT hit the same number in two.
Digital Bridge at the time described industry-wide US demand for data centers as a 10GW market. McKinsey & Company, a global consulting firm noted for huge macro analysis and squadrons of obscenely paid advisors, was more expansive; in January 2023 they said that the US data centre market was a 17 GW market, “expected to reach 35 gigawatts (GW) by 2030.”
I keep harping on the dates here because it is important; major industry participants like Digital Bridge and McKinsey paid scant attention to AI until early 2023, at which time things went berserk.
A look at recent regional developments will show just how much so. Consider that the top 10 US data centre locations by existing infrastructure are Northern Virginia, Phoenix, Dallas, Atlanta, Chicago, northern California/Silicon Valley, Portland, NY/NJ, Seattle, and LA.
Here in May 2024, Ohio’s grid operator flagged that they are being snowed under with data center demands, with 50 projects in the queue that are expecting to be supplied with a total of 30 GW. That’s just Ohio. It’s not even a top 10 location. And the amount of demand in their queue nearly matches what, just last year, McKinsey was forecasting for the whole country, by 2030.
We are going to see a lot more of this; demand blossoming in regions that are in close proximity to a natural gas supply. There is no other way for it all to happen, and the pressure on companies to jump on the band wagon is as close to a moral imperative as there can be in a boardroom.
The demand for power is enormous, and while it is true that many of the tech giants building these data centres have pledged to utilize renewable power wherever possible, it is also true that data centres are intended to run 24/7/365 wherever possible. Hello, natural gas, no matter who that fact upsets. Several recent estimates have pegged new AI-driven demand for natural gas at anywhere between 5 and 20 bcf/d, a not-so inconsiderable range in a 100 bcf/d market that was not expecting this. Even renewables advocates are stunned, see this view from a Virginia renewables advocacy group: “It is heart-stopping — just the scale at which these things are growing and the power they’re sucking up,” said Kendl Kobbervig, the advocacy and communications director at Clean Virginia.
It is possible that AI hits a wall; it surely will in some areas, and the Wall Street Journal just the other day ran an article about how the popular services like ChatGPT have now absorbed the entire internet and thus won’t show the same level of growth. That could be true. But it also seems just as apparent that many industrial users are only beginning to get their feet wet in understanding what AI can do for them. A single industry like pharmaceuticals might well go far beyond cataloguing every lunatic opinion on the web; they will want to know what every lunatic shops for every day and how that interacts with all other aspects of his/her life to determine if that is causing his toenail fungus or halitosis or brain tumour. And it all might get solved right there in Cleveland. (And I’m not knocking the place, The Flats on a beautiful summer evening is not a bad place to be at all.)
Pretty (Big) Hate Machine
Something in the news irked me greatly the other day: some possible legislation that the federal government or the senate or someone over there in that nest of vipers is kicking around that will or could be hugely detrimental to the oil and gas sector. It is the sort maniacally stupid legislation that needs to be publicized.
Or does it… poking my head up into the world of political jousting reminds me why I seldom do it, and just how unhealthy societal debate has become. What is wrong with me… never in my life have I wasted a second on things that are void of intelligence, and yet here I am fuming about one of them.
It isn’t that hard to trace how we’ve come to be this way. Think of the axes upon which we place ourselves. There used to be simplified versions, where, for example, the ‘left’ had certain defining values and beliefs, as did the ‘right’, and we could make sense of it all because the give and take was evident and debatable. Now, things are infinitely more complex, not in any grand philosophical way, but more in animal kingdom terms. It’s like we all have rabies.
The ‘left’ and ‘right’ have disintegrated as positions, and the disjointed axes mean no one truly fits in anywhere. Ask yourself where you fit on the following topics: Climate critical vs. Climate meh; Vaccines vs. no Vaccines; Palestine vs Israel; Arm Ukraine more vs. Ukraine negotiate; Big Tech good vs. Big Tech bad; Censorship acceptable vs. Censorship terrible; Fifteen minute cities good vs Fifteen minute cities bad; Renewables good vs. Renewables bad; Fossil fuels bad vs. Fossil fuels good; Yay gender flag vs. Boo gender flag…
A rational person will look at this list of options and be of two minds of at least one, or at a minimum say “Well, that depends…” But in the clickbait hate-fest we live in, publicly taking a position on any one of these will earn you vast hatred the likes of which you’ve never imagined, and, correspondingly, acceptance/admiration in other circles. And they’re all equalized facets; say “I support Trump” and your position on every one of these topics will be assumed, and vice versa, and people will instantly know, from then and forevermore after, whether to respect or loathe you.
It’s getting worse, not better. The arsenal of angst is taking over what has only ever been benign terrain. Some random author mused on Twitter/X the other day about whether some of history’s greatest writers of fiction and poetry were apolitical, that many – Joyce, Beckett, Faulkner, O’Connor, etc. – seemed to have no use for politics. He was attacked relentlessly by mobs who want to drag the authors into one camp or another. For no reason. The guy just posted a thought, and a good one.
A social-media-famous cook that had a column in the New York Times was hounded out of the spotlight – cancelled – because she said something negative about a person who happened to be of colour, though the comment had nothing whatsoever to do with race. Even food is now politicized.
While this cute little diatribe has nothing to do with energy, in another way it has everything to do with energy, on a personal level. It’s soul-sucking and not right to spend one’s time in such anger tanks – whether you’re in one that you agree with or not. It’s just terrible and it’s something you even tell kids to avoid.
What we all need to dial in on is what is known in certain denominations as the serenity prayer; here is a version in non-denominational terms so that I don’t get kicked in the throat by someone trying to get to a specific heaven that would phrase it differently: “[Gaia], grant me the serenity of mind to accept that which cannot be changed, the courage to change that which can be changed, and the wisdom to know the difference.”
I urge everyone for the sake of their own mental health to absorb that lesson and live it, particularly as it comes to social interactions. Don’t fight with people with intractable minds, you will only drive yourself crazy. Smile and wave and let them vibrate with rage until they inevitably resemble a dryer with a brick in it.
For the sake of your own mental health, also try to avoid the dopamine hit of bonding over mutual loathing. It might feel good to get a good rage going with your like-minded cohort, but it’s a ‘feel good’ moment that is no better than sniffing glue. Both will destroy your brain.
This is all particularly so if caught up in the hydrocarbon wars, and, full disclosure, I’m as guilty as anyone. It’s hard to watch the world’s fuel system be dismantled when it is clear to actual participants what is going to happen as a result.
But we all need to relax, and breathe deeply, and look around. A decade and a trillion dollars aimed at wiping out the world’s hydrocarbon chain has led to… record global consumption of oil, natural gas, and even coal.
There is no true global war on hydrocarbons; that battle exists only in a very small subset of wealthy westerners that are devoid of real energy knowledge, and reality is about to teach them real good, to paraphrase Billy Sol Hurok. So the age-old maxim holds that self-defence is fully justified, but if people otherwise are just slagging to feel good in their own circle, let ‘em. Don’t lose any sleep over it. It’s not worth it.
The real global war, the one people should and will care about, is misuse of scarce resources, which includes all finite resources, which includes space and natural environment required by wildlife.
It may be frustrating to watch everything going to hell and to be told “Go chill out,” but think of it this way. While you wait for your chance to vote, take this as consolation: the current architects have built their own experimental flying machine out of third-rate plans they got off the web. They’re building it and they’re not going to test it and they haven’t torqued any of the bolts because what are they grease monkeys and they’re going to get right in and see how fast it’ll go and it’s going to end exactly as you’d imagine. And they will remove themselves from any future conversations.
Save your energy for when you can do something about it – at the ballot box, or the next time candidates show up at your door to earn your support. Use those two minutes to vent your spleen, then go back to a life of contentment. Go smell some freaking flowers. It’s spring. You’re welcome.
If you haven’t read this fine energy book, your life is incomplete. Available at Amazon.ca, Indigo.ca, or Amazon.com.
Read more insightful analysis from Terry Etam here, or email Terry here.