It’s being handed to Louisiana on a silver platter. Let’s hope the state’s current crop of policy-makers doesn’t emulate those of the past and blow it.
Particularly with artificial intelligence applications ramping up at an accelerating pace, future world energy demand estimates have begun to escalate. In response, energy firms are reconsidering moves they made away from reliance on coal, natural gas, and nuclear power that purveyors of catastrophic anthropogenic global warming hysteria have pressured them to seek, with companies now considering restarting closed operations, abandoning closure plans, and expanding these capacities.
And there is perhaps no state, particularly in per capita terms, that stands to gain more from this than Louisiana, especially when it comes to natural gas. Among the states, Louisiana accounts for about 10 percent of U.S. total marketed natural gas production and holds about 6 percent of the nation's natural gas reserves, good enough to rank third highest in marketed natural gas production and seventh in proved natural gas reserves. It also is the major distributor of natural gas, because of it reserves and production but also as it serves as the major transmission point both within the country and now outside of it with liquified natural gas exports.
Any spike in the use of gas for AI or whatever purpose certainly benefits Louisiana. However, the real payoff can come from enticing data firms in locating in the state. Increasingly, a topic of discussion within that industry is establishing dedicated energy sources solely for the use of a company, such is the intensity of energy demand for information technology. The abundance of gas sloshing around the state provides the perfect breeding ground for these and the very high-paying jobs that result.
Of course, policies that not only encourage but also don’t discourage natural gas extraction, production, and transmission must continue and extend. For example, renewable portfolio standards, or a mandate that a certain proportion of energy sales come from generation by renewable energy sources, represent a real threat to hem in gas production if by a regulated utility (some technology firms have considered building their own power plant, bypassing the middleman). Fortunately, Louisiana never has had one, and far-sighted candidates for the District 2 Public Service Commission race this fall should pledge that they never will approve one.
Simply, renewable sources can’t service this task. Data centers need absolutely consistent, on-demand power that renewables by their nature (with the possible exception of hydraulic, which Louisiana has little of, or geothermal of which the state has none) can’t perform, and the prohibitively expensive battery technology is nowhere near to what it needs to be to store enough for data center purposes. The one renewable that the state has in relative abundance, biomass (such as bagasse) is limited in its transportation ability. Thus, any policy encouraging renewable production should be stricken for the additional reason that it may beggar gas production.
As well, the state should make legal changes to encourage gas production but also to add incentives to site data centers. For example, as part of economic development efforts a lending program with extremely favorable terms could be established to entice building data centers and power plants dedicated to these, which should cost less to run than just about anywhere in the country given the abundance of gas.
So often in the past state policy-makers have frittered away opportunities tied to Louisiana’s abundant natural resources. Facilitating the AI revolution they can’t afford to let slip away.
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