Newly inaugurated US President Donald Trump has made good on promises to “drill baby, drill,” announcing a host of measures that will roll back environmental protections and speed up the approval of new fossil fuel projects.
On his inauguration day, Trump declared a “national energy emergency,” citing the soaring demand for data centers and digital infrastructure as one crucial factor in his decision. According to the Department of Energy, data centers are expected to consume between 6.7 percent and 12 percent of total US electricity by 2028.
Trump also signed orders promoting oil and gas development in Alaska, overturning the previous administration's directive to withdraw about 44 million acres of the Northern Bering Sea and other federal offshore areas from the Department of the Interior’s oil and gas leasing program.
In addition, the President revoked targets for electric vehicle adoption, suspended wind leasing on the US Outer Continental Shelf, and mandated a review of the federal government’s leasing and permitting practices for wind projects.
In another blow to environmental advocates, Trump once again withdrew the US from the Paris Climate Agreement, which stoked controversy in his last term.
Democrats dubbed the move a “disaster for working families." Alex Floyd, DNC spokesperson, stated: “Killing manufacturing jobs and giving a free pass to polluters that make people sick is hardly putting ‘America first.'"
It remains to be seen what impact Trump’s measures will have on US fossil fuel production, which is already at record levels. On average, in 2024, the US produced a record-breaking 13.2 million barrels of crude oil per day.
Trump framed the decision as an effort to turn the US back into a manufacturing giant.
"America will be a manufacturing nation once again, and we have something that no other manufacturing nation will ever have: the largest amount of oil and gas of any country on Earth," Trump said during his inauguration speech.
The President's overt backing for fossil fuel companies could profoundly impact the procurement strategy of data center firms.
Over the past year, an increasing number of data center companies have signed natural gas supply agreements to power their operations. Both hyperscalers and small-scale facilities are taking advantage of the US's plentiful natural gas supply.
In December last year, Meta announced that its new 2GW $10 billion data center in Louisiana would be powered by three gas turbines with a combined capacity of 2.26GW.
In addition, several smaller AI data centers have secured off-grid gas supplies adjacent to the Permian basin, which spans Texas and New Mexico. For example, New Era Helium and Sharon AI have committed to building a data center powered by 250MW of natural gas in West Texas.
Large fossil fuel companies have also begun explicitly targeting the data center sector as an area of growth for their business. Late last year, oil and gas major ExxonMobil revealed plans to build a 1.5GW natural gas-fired power plant dedicated to the data center sector.
