The International Energy Agency (IEA), which polishes its progressive credentials every time Executive director Fatih Birol speaks from his ivory tower, is forecasting fossil fuel use to peak within a decade. Down at ground level, evidence continues to mount that fossil fuel consumption will continue to grow, led by natural gas.

Williams Companies CEO Alan Armstrong sees natural gas as critical to providing the increased electricity needed for AI data centers. Although many big tech companies would prefer to rely on solar and wind, Armstrong is confident that the size of the increased demand as well as the requirement for 24X7 supply makes natural gas the obvious beneficiary.

Some planned data center operators have found utilities balking at supplying the needed electricity, and have approached Williams seeking direct supply of natural gas so they can bypass the grid.

The Pacific Northwest’s power grid has warned that within five years data centers in its region could consume 5X the power of Seattle.

Climate extremists may be surprised to learn that 60 percent of US emissions reductions have come on the back of converting coal to natural gas–fired power generation. This is the opportunity the pause in LNG permits is potentially denying other countries.

Armstrong even suggests it’s an issue of national security, since poor energy choices could leave the US struggling to keep up with others in the global AI race.

Other energy companies agree with Armstrong. Antero Resources expects 14% pa growth in natural gas demand for US electricity generation. Kinder Morgan added a $3BN natural gas pipeline expansion which is expected in part to support increased power generation for data centers.

Texas is doubling the amount of loans it will provide for new natural gas power plants. The Lone Star state already relies on gas-fired power for nearly half of its electric needs.

The former Conservative government in the UK warned in March that, “Without gas backing up renewables, we face the genuine prospect of blackouts.”

The world is going to increase its use of all sources of energy. The US Energy Information Administration (EIA) publishes non-partisan forecasts, unlike the IEA. Calls from Conservative politicians to defund the IEA recognize that it’s strayed far from its original mission, to provide useful energy forecasts.

Their acronyms may be confusingly similar, but their forecasts are not. The EIA sees global renewables supply growing enough to meet around half of the increase in total energy demand. Solar and wind will modestly gain market share, but because of rising living standards in emerging economies all sources will grow.

By contrast the IEA expects fossil fuel consumption to peak within the next decade. This seems especially unrealistic given upward revisions to data center power demand.

Pakistan has recently endured temperatures as high as 117 degrees F. Hundreds of people were treated for heatstroke, and dozens of deaths were attributed to it. One World Bank expert predicts temperatures will rise more in Pakistan than elsewhere in the world, possibly by as much as 9 degrees F by the 2090s. They’d like to buy more LNG which could reduce their coal consumption, but the Biden Administration’s permit pause is keeping global prices higher than they would otherwise be.

A friend in NJ told me the other day that he’d recently installed 30 solar panels on his roof and was saving around $300 per month in utility bills. He also relies on solar to recharge his Tesla. With the tax breaks he estimates the break-even is around eight years.

Another friend in California is similarly enamored of solar to recharge his EV and doesn’t miss going to the gas station. EVs are inconvenient for long journeys because of the time and effort required to recharge on the road, although my Californian friend thinks it’s silly to let such infrequent trips be a consideration.

I was surprised to learn that solar panels don’t work when conventional power from the grid is down. Avoiding the inconvenience of a power outage with your own personal solar farm would seem attractive, especially given our aging infrastructure.

Solar panels are programmed to turn off when the power’s down to prevent them from sending electricity back to the grid when workers may be repairing storm damage. If you have a battery, you can still use stored solar power when it’s cloudy and the grid is down.

For our part, we’re upgrading from an oil furnace to natural gas. This will reduce our emissions by a third. Think of it as the Conservative’s approach to fighting climate change.

We have three have funds that seek to profit from this environment:

Energy Mutual Fund

Energy ETF

Real Assets Fund

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