APRIL 23, 2025

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In this week’s edition:

• Bill Spindle has two stories on how natural gas is complicating the energy transition.
• Anca Gurzu looks at which countries are going to need the most energy to run data centers for artificial intelligence.

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Send your energy photos, story tips and more to news@ciphernews.com.

Illustration by Nadya Nickels.

Natural gas presents an energy transition puzzle

BY: BILL SPINDLE

NEUQUÉN, Argentina — From his office deep in Argentina’s Pampas region, Gustavo Medele, the minister for mining and resources for Neuquén Province, puzzles over the future of natural gas. He’s far from the only one.

Medele’s province sits atop what’s known as the Vaca Muerta, a geological formation that contains some of the world’s richest oil and gas reserves. While some of the oil is now flowing to global markets, the geological formation also contains gas deposits potentially worth trillions of dollars that aren’t even being extracted.

“The question is, what do we do with it?” Medele said during a wide-ranging interview on my recent visit to the region, several hundred miles southwest of Buenos Aires.

It’s a question many countries are asking themselves about natural gas.

On the one hand, gas is a fossil fuel that causes global warming. Using more of it could delay the uptake of much cleaner renewable technologies. Its price can be volatile, and supplies can be vulnerable, as the world discovered when Russia invaded Ukraine in 2022.

On the other hand, gas can be an inexpensive form of energy that’s flexible and available around the clock. During the Obama and Biden administrations, the United States became a gas-exporting powerhouse, despite worries about the potential long-term impacts on the climate and domestic gas prices that led Biden to pause some of the projects for study.

The Trump administration has fully embraced the gas industry and quickly approved the projects Biden paused.

“This is a way to balance trade,” U.S. Interior Secretary Doug Burgum recently told Bloomberg Television in an interview alongside Energy Secretary Chris Wright, as a tanker behind them was filled with liquified natural gas (LNG) destined for Germany. “The gas that’s going onto this ship is creating jobs all over America.”

Currently, gas constitutes about a quarter of global electricity consumption and produces about a fifth of the world’s greenhouse gas emissions from energy consumption, according to the International Energy Agency.

Many countries, such as the U.S., Japan and Argentina, are embracing gas as a mainstay of the energy system. Others remain cautious, especially countries that import most of their supplies, including China, India and many European nations.

How gas is used is an urgent issue for climate change, since installations built today will be used for decades or wind up mothballed at huge expense.

Gas-rich Argentina has less money and fewer options for deploying its gas than other gas-rich countries, like the U.S. But in Neuquén, where prefectural officials control much of the gas resource under Argentine law, leaders like Medele are equally determined to capitalize on the resource.

“If you bring more energy, you get economic development,” he told me.

The current flow of gas that accompanies oil drilling in the Vaca Muerta isn’t easily utilized.

The province has plans to pipe or distribute gas in cylinders to communities with no electricity in the nearby Andes mountains. Beyond that, there are plans to link up to pipelines running to neighboring Brazil and perhaps Chile.

And finally, the province is studying the global market for liquified gas.

“The question, then, is who could buy this, or who will buy this?” Medele said.

Read this article and share it on Cipher’s website.

Lunchtime Reads and Hot Takes

Scientific consensus, climate and Catholicism: A look back at Pope Francis’s environmental legacy — Euronews
Amena’s take: While he may not have attended any of the UN meetings on climate, Pope Francis will be remembered for writing a treatise on climate change and environmental destruction.

Sustainability Investors Eye Defense Stocks as Geopolitical Tensions Rise — The Wall Street Journal
Cat’s take: This is unsurprising given the overlapping Venn diagram of climate and security. I wish, however, it was sufficiently clear that responding to climate is a core component of national security.

Saudi businesses turn to solar power as kingdom cuts energy subsidies — Financial Times (subscription) 
Bill’s take: Saudi is one of many emerging markets benefitting from China’s huge surge in clean technology manufacturing, as the U.S., Europe and India have placed tariffs on Chinese panels.

Trump Opens a Huge Marine Protected Zone to Commercial Fishing — The New York Times
Cat’s take: The area of the ocean rich with corals, sea turtles and whales was first protected by George W. Bush, a Republican, and then expanded by Barack Obama, a Democrat.

Chris Wright promised a ‘golden age’ for oil. His old company is bracing for a storm. — E&E News (subscription) 
Amena’s take: As the article notes, Liberty Energy is seen as the barometer of President Trump's policies, including tariffs on a range of imports including steel and aluminum that are key to drilling activities.

Revealed: NATO downplays climate and gender language to appease Trump — POLITICO
Anca’s take: "Green technologies” have allegedly been replaced with “innovative technologies,” while “climate” has been labeled an “operational environment,” according to NATO officials who spoke anonymously.

Trump administration issues order to stop construction on New York offshore wind project — AP News
Cat’s take: The move to claw back Empire Wind, a fully permitted project, is the latest sign of the Trump administration's antagonism toward renewable energy and specifically offshore wind.

How Elon Musk Stopped Loving Cars and Left Tesla in the Lurch — The Information (subscription)
Bill’s take: The piece helps explain why Musk seems fine with government policies that hurt EVs but punish other companies more than Tesla: They seem to provide cover from competition during Telsa’s pivot.

More of what we're reading:

• Gas-fired power plant capacity to jump 20% in 2030, led by Asia — Nikkei Asia
• Trump Throws the Electric School Bus Transition Into Chaos — Bloomberg
  
  

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How liquefied gas is remaking energy markets and climate risk

Illustration by Nadya Nickels.

BY: BILL SPINDLE

HOUSTON — A trio of countries has orchestrated the global trade in liquified natural gas as it’s grown into an energy mainstay for the world over the last 30 years.

The Persian Gulf emirate of Qatar built the foundation, the United States has added flexibility and Japan is providing the demand.

In the process, the shipped natural gas trade has reshaped worldwide energy markets and geopolitics. The trio now aims to make the super-cooled commodity — better known by its initials LNG — a major force in the world’s energy future.

“We’re hoping to pick up the pace,” U.S. Energy Secretary Chris Wright recently told reporters at a major oil and gas conference in Houston as he signed off on the new administration’s fourth LNG project approval with a flourish.

As part of its global tariff blitz, the Trump administration is pressuring Europe and other countries to purchase more U.S. LNG. It’s also urging the Japanese and South Korean governments to pull the trigger and help finance a long-discussed LNG project in Alaska that could ship supplies directly to Asia across the Pacific.

LNG is controversial and complicated to categorize.

Imported gas could be a replacement for some coal — the dirtiest of energy sources — in some of the most coal-dependent countries where there are no natural gas deposits. But according to at least one study, LNG might be almost as bad or even worse for the climate than coal when the entire process of extracting and delivering it is taken into account.

“You could end up with something that’s far worse than what you’re replacing, the fossil fuel status quo,” said Beth Trask, vice president, global energy transition at the Environmental Defense Fund.

LNG also competes with much cleaner but less flexible solar and wind power, especially in countries that shelter the coal industry from competition. That could depress the growth of renewables.

Love it or hate it, LNG has reached a watershed. Gas is the only fossil fuel where demand is still growing strongly. And the LNG industry is one of the main drivers, as it finds new markets in energy hungry corners of the world far removed from gas reserves. Where, how and for how long LNG is used will profoundly shape global efforts to cut greenhouse gas emissions and avoid the worst fallout from global warming.

The LNG trade was supercharged following Russia’s invasion of Ukraine, as Europe has scrambled to replace Russian natural gas.

Questions persist about LNG demand, particularly after 2030. New forms of energy, like next-generation nuclear and geothermal, are poised to take off in the 2030s and could ultimately undercut the market for LNG.

Meanwhile, Europe is rapidly adding renewable energy to decarbonize its energy system faster than any region in the world.

So all eyes are on Asia. The U.S., Japan and Qatar remain confident global LNG appetite will be sustained.  

Read this article and share it on Cipher’s website.

The U.S. and China drive data center power consumption

Source: International Energy Agency

BY: ANCA GURZU

The United States and China account for 80% of the projected growth in electricity consumption from data centers by the end of the decade, according to the International Energy Agency (IEA). 

As artificial intelligence becomes an increasingly important pillar in our day-to-day lives, demand for electricity to power all that AI is expected to rise. 

Power consumption from data centers in the U.S. is set to increase 130% to 425 terawatt hours (TWh) by 2030 compared to 2024 levels. At that rate, data centers would account for almost half the country’s electricity-demand growth over the next five years, according to IEA’s recent report on energy and AI. 

The U.S. economy is set to consume more electricity for processing data by the end of the decade than for all manufacturing of energy-intensive goods, including aluminum, steel and cement, IEA found.

Supporting AI development, and ensuring the U.S. dominates the sector over China, is a stated goal of the current U.S. administration. In executive orders, President Donald Trump has directed agencies to prioritize the buildout of new data center infrastructure, including power generation. And the U.S. Energy Department recently identified federal sites where data centers and new energy resources could be built together. Technology leaders in the U.S. also recently pledged up to $500 billion to build data centers in the country.

China’s power consumption for data centers, meanwhile, is set to increase 170%, or to 277 TWh. Globally, electricity consumption from data centers is set to rise to around 945 TWh by 2030, more than doubling from 2024 levels.

Despite these strong increases, data centers are still projected to account for less than 10% of total power-demand growth globally by 2030. The electrification of the economy, such as wider use of electric vehicles and air conditioning, are the leading drivers of electricity growth. 

Data centers do have a potential weakness, however: unlike electric vehicles, they tend to concentrate in specific locations, which may make their integration into the grid more challenging, the report said.

AND FINALLY...
Solar irrigation

Amena Saiyid recently snapped this photo on a reporting trip in Pakistan. The solar panels are being used to pump water from the river to irrigate the row of poplar trees lining the highway between Shigar and Khaplu, two major cities in the northern part of the country.

Each week, we feature a photo that is somehow related to energy, the thing we all need but don’t notice until it’s expensive or gone. Email your ideas and photos to news@ciphernews.com.

Editor’s note: In addition to supporting Cipher, Breakthrough Energy also supports and partners with a range of entities working to tackle climate change, including nonprofits, corporations, startups and research firms. For more information on Cipher’s editorial policy, click here.