The growth of artificial intelligence (AI) has resulted in the rapid increase in the need for data centers, a trend that is likely to accelerate through the end of this decade. Of course, such data centers need power, so that growth translates into an increase in energy demand—and the infrastructure needed to supply it. Boston Consulting Group estimates that power consumption from data centers could nearly triple, from 126 TWH in 2022 to 390 TWH by 2030—or the equivalent power consumption of around 40 million homes.

Among the power sources likely to benefit from this increased demand is natural gas. As the chart below illustrates, according to Wells Fargo, new data center construction could result in a nearly 20% increase in natural gas demand from power generators through the end of the decade, or around 7 billion cubic feet per day (Bcf/d).

This significant growth in demand is likely to have profound impacts on the natural gas value chain in North America, and we think energy infrastructure companies will be poised to benefit. In fact, many power companies are already adjusting their resource plans to accommodate growing numbers of natural gas plants, and these facilities will require additional infrastructure and supplies in order to operate. We believe this growth will be additive to the rapidly expanding demand for U.S. liquified natural gas (LNG) exports, which are expected to more than double through 2027. Combined, these two driving factors continue to highlight the vital importance of U.S. natural gas supply in satisfying global energy needs, including those related to technological advancement.

We believe an active energy infrastructure strategy is the best way to capitalize on this growing trend, as the largest passive products have limited exposure to the beneficiaries of this theme.

Important Disclosures

All investing involves risk. The value of an investment will fluctuate over time, and an investor may gain or lose money, or the entire investment. Real assets include real estate securities, infrastructure securities and natural resources securities.

Infrastructure companies may be subject to a variety of factors that may adversely affect their business, including high interest costs, high leverage, regulation costs, economic slowdown, surplus capacity, increased competition, lack of fuel availability and energy conservation policies.

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