AI buildout pumps up oil & gas needs
Perspectives from BofA Global Research’s Leading Analysts
July 20, 2026
Jean Ann Salisbury, Senior Research Analyst, Integrated Oil; Midstream & Natural Gas
AI data centers have become one of the most important investment themes across industries, and they are relevant for oil & gas too. As hyperscalers race to deploy AI infrastructure, power demand is expected to soar while power availability increasingly becomes a key bottleneck. Our analysis, incorporating BofA semiconductor estimates and third-party forecasts, suggests U.S. data center demand could grow by 125GW between 2026 and 2030. When combined with load growth from manufacturing, residential and commercial customers, total load growth should materially outpace accredited utility supply additions over the same period.
As a result, developers are increasingly turning to behind-the-meter (BTM) generation solutions, with natural gas emerging as the most practical near-term power source given its availability, reliability and scalability.
How large could the BTM opportunity become?
To answer this question, we built a database of 109 announced on-site gas generation projects totaling 158GW of prospective capacity. Not all projects will move forward, and much of the pipeline is still in the early stages. However, the pace of activity suggests behind-the-meter power is evolving from a niche solution into a meaningful component of data-center development. An increasing number of projects have progressed beyond the announcement stage to the point where they have secured equipment providers, power partners and start dates. Development has also been clustering around natural gas-rich areas like Texas, Ohio, Pennsylvania and West Virginia.
Which segments stand to benefit?
A growing group of oil and gas companies are positioning themselves to serve this emerging market. We believe the primary beneficiaries are likely to be oil-field service companies, which can provide engineering expertise and large-scale project execution capabilities, and midstream companies, which can leverage their pipeline networks and gas supply infrastructure to provide solutions to data-center sites. Both segments also have extensive experience operating gas-powered equipment and distributed energy systems in the field, giving them expertise that aligns well with data-center developers’ growing need for fast, reliable power. As a result, data-center developers are increasingly turning to these energy companies to solve their speed-to-power challenges. Beyond the behind-the-meter build-out itself, we believe the rapid adoption of gas-fired generation could become a structural tailwind for U.S. natural gas demand, reinforcing our constructive long-term outlook for the commodity as power demand and LNG exports continue to expand.
Data centers craving food and service
With AI driving unprecedented data center expansion, global providers of food, housing and transportation are well positioned to capture a nearly $70bn market opportunity.
