Even as the Biden administration’s regulatory agencies are moving to render the building of new natural gas power plants too costly to justify, a consensus has formed in the analyst community that the added power demands from AI will require a big expansion of natural gas generation to ensure grid stability.
On April 25, the EPA finalized new power plant emission rules that will essentially force the retirement of America’s remaining coal-fired power plants by 2030 by rendering them too costly to continue operating. Most media reports focused on that aspect of the new regulations, which had been anticipated.
Reporters gave less attention to the fact that the new rules also constitute a clear effort to make it nearly impossible to finance and operate additional gas-fired power plants over the same time. The requirement that new gas plants be accompanied by costly carbon capture and storage (CCS) capability adds millions in additional costs and would also consume as much as 30% of the power generated by the plants, greatly diminishing their profitability. The fact that some operators have already tried and failed to add CCS to at least five such plants in the United States leads to an almost inevitable conclusion that this rule is intentionally structured to shut down the natural gas power industry in this country.
On May 13, the FERC rules added hundreds of thousands of more words targeting natural gas with its Order 1920. Where the EPA rules make it vastly more expensive to build and operate natural gas power plants, FERC Order 1920 makes it more costly and difficult to permit transmission lines needed to carry their electricity to market. FERC does this by discriminating between generation sources, streamlining and incentivizing permitting for power lines that are connected to wind and solar projects.
It is a regulatory pincer move designed to force generation companies to invest in wind and solar to the exclusion of natural gas generation, one that Bryce says “will strangle AI in the crib.” Rapidly expanding power loads will require a generation source that is reliable 24 hours, seven days each week, one that can be rapidly dispatched to meet demand surges that take place every day. Only natural gas can reliably fill that breach.
A series of recently published analytical studies support Bryce’s case. A Goldman Sachs analysis published in mid-May estimates that natural gas is the most fit generation tech to meet about 60% of the incremental demand load by 2030. Tudor Pickering & Holt estimates that meeting the new demand could require the building of as much as 8.5 bcf/day of new natural gas generation capacity over the same time frame.
Bryce quotes from a Morningstar report that pegs the additional gas demand at 7 to 10 bcf/day. He also refers to an Enverus study that concludes that power demand from AI and other data centers will double by 2035, requiring an additional 4.2 bcf/day of new natural gas generation by that time for their needs alone.
“This type of need demonstrates that the emphasis on renewables as the only source of power is fatally flawed in terms of meeting the real demands of the market,” Richard Kinder, executive chairman of pipeline operator Kinder Morgan, told analysts during the company’s first-quarter earnings in April, as reported by CNBC.
Seldom do we see a consensus so broad and diverse as this emerge on any topic in the energy space, yet the Biden regulators at EPA, FERC and other relevant agencies appear to be impervious to having their green energy fantasies interrupted by such pesky realty. They have one goal, which is to finalize as many new regulations negatively impacting the coal and oil and gas industries as possible before time runs out on the administration’s first term.
In that mad rush to consolidate authoritarian control, any and all inconvenient facts are to be ignored. This will not end well.
David Blackmon is an energy writer and consultant based in Texas. He spent 40 years in the oil and gas business, where he specialized in public policy and communications.
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Northern Gateway ($7.9 billion), cancelled in 2016
These projects were cancelled due to regulatory challenges, environmental opposition, and shifting political decisions on both sides of the border. This left Canada without key infrastructure to support energy exports.
For years, companies have tried to build the infrastructure needed to move Canadian oil and gas across the country and to sell to global markets. Billions of dollars have been invested in projects that never materialized, stuck in regulatory limbo, weighed down by delays, or cancelled altogether.
The urgency of this issue is growing.
Last week, 14 CEOs from Canada’s largest pipeline and energy companies issued an open letter urging federal leaders from all parties to streamline regulations and establish energy corridors, warning that delays and policy uncertainty are driving away investment and weakening Canada’s position in global energy markets.
The U.S. recently imposed tariffs on Canadian energy, adding new pressure to an already lopsided trade relationship. According to the 2024-2025 Energy Fact Book from Natural Resources Canada, the U.S. accounted for 89% of Canada’s energy exports by value, totalling $177.3 billion. This leaves the economy vulnerable to shifts in American policy. Expanding access to other buyers, such as Japan, Germany, and Greece, would help stabilize and grow the economy, support jobs, and reduce reliance on a single trading partner.
At the heart of this challenge is infrastructure.
Without reliable, efficient ways to move energy, Canada’s ability to compete is limited. Our existing pipelines run north-south, primarily serving the U.S., but we lack the east-west capacity needed to supply our own country and to diversify exports. Energy corridors (pre-approved routes for major projects) would ensure critical infrastructure is built fast, helping Canada generate revenue from its own resources while lowering costs and attracting investment.
This matters for affordability and reliability.
Our research shows engaged women are paying close attention to how energy policies affect their daily lives — 85 per cent say energy costs impact their standard of living, and 77 per cent support the development and export of liquefied natural gas (LNG) to help provide energy security and to generate revenue for Canada.
With increasing concern over household expenses, food prices, and economic uncertainty, energy corridors have become part of the conversation about ensuring long-term prosperity.
What are energy corridors, and why do they matter?
Energy corridors are designated routes for energy infrastructure such as pipelines, power lines, and transmission projects. With an energy corridor, environmental assessments and stakeholder consultations are completed in advance, allowing development to proceed without ongoing regulatory hurdles which can become costly and time consuming. This provides certainty for energy projects, reducing delays, lowering costs, and encouraging investment. They are also not a new concept and are applied in other parts of the world including the U.S.
In Canada, however, this isn’t happening.
Instead, each project must go through an extensive regulatory process, even if similar projects have already been approved. Energy companies spend years trying to secure approvals that don’t come to fruition in a reasonable time and as a result projects are cancelled due to sky-rocketing costs.
“Getting regulatory approval for energy transportation projects in Canada takes so long that investors are increasingly looking elsewhere,” said Krystle Wittevrongel, director of research at the Montreal Economic Institute. “Energy corridors could help streamline the process and bring back much-needed investment to our energy industry.”
Jackie Forrest, executive director at the ARC Energy Research Institute, pointed out that the time it takes to get projects approved is a major factor in driving investment away from Canada to other countries.
“Projects are taking five or more years to go through their regulatory review process, spending hundreds of millions if not a billion dollars to do things like environmental assessments and studies that sometimes need to be carried out over numerous seasons,” she said.
The cost of missed projects
Over the past decade, multiple major energy projects in Canada have been cancelled or abandoned. Among them:
Keystone XL ($8 billion), cancelled in 2021
Energy East ($15.7 billion), cancelled in 2017
Northern Gateway ($7.9 billion), cancelled in 2016
These projects were cancelled due to regulatory challenges, environmental opposition, and shifting political decisions on both sides of the border. This left Canada without key infrastructure to support energy exports.
LNG projects have faced similar setbacks. More than a dozen LNG export proposals were once on the table, but these same issues made most of these projects not viable.
Meanwhile, the United States rapidly expanded its LNG sector, now exporting far more than Canada, capturing global markets that Canada could have served.
“Ten to 15 years ago, there were about as many LNG projects proposed in Canada as in the U.S.,” said Forrest. “We have not been able to get those projects going. The first Canadian project is just starting up now, while the Americans are already shipping out far more.”
She cited a report that shows LNG development in the U.S. has added $408 billion to GDP since 2016 and created 270,000 direct jobs.
“That’s a major economic impact,” she said. “And Canada hasn’t been able to take part in it.”
The case for energy corridors: Creating prosperity, keeping costs in check
Energy corridors could help Canada build long-term prosperity while addressing affordability, job creation, and energy reliability.
“More efficient infrastructure reduces supply chain delays, helping to lower consumer energy costs and related expenses like food and transportation,” said Wittevrongel.
Wittevrongel notes that projects that cross provincial borders face both provincial and federal impact assessments which leads to duplication of effort and delays. Reducing this overlap would shorten approval timelines and provide more certainty for investors.
“One of the ways to improve this process is having the federal government recognize provincial environmental assessments as being good enough,” she said. “There has to be a way to balance that.”
Forrest said investors have already taken note of Canada’s high project costs and long approval timelines.
“TC Energy just built a pipeline to connect the BC gas fields with the West Coast that cost about twice as much as originally expected and took a lot longer,” she said. “Meanwhile, they recently completed a $4.5-billion natural gas project in Mexico under budget and ahead of schedule. Now they’re looking at where to put their next investment.”
Forrest explained that energy corridors could help de-risk infrastructure projects by front-loading environmental and stakeholder work.
“If we just had a pre-approved corridor for things like pipelines and transmission lines to go through, where a lot of this groundwork had already been done, it would really reduce the timeline to get to construction and reduce the risk,” she said. “That would hopefully get a lot more capital spent more quickly in this country.”
The path forward
Without changes, investment will continue to flow elsewhere.
“Energy corridors can go a long way to restoring Canada’s attractiveness for energy transportation and infrastructure projects as it cuts down on the lengthy bureaucratic requirements,” said Wittevrongel.
And Forrest agrees.
“We need to pick key projects that are going to be important to the sovereignty and economic future of Canada and get them done,” Forrest said. “I don’t think we can wait for long-term legislative reform — we need to look at what the Americans are doing and do something similar here.”
Energy corridors are about ensuring Canada remains competitive, lowering costs for consumers, and creating the infrastructure needed to support long-term economic prosperity.
For engaged women, this translates into a stronger economy, lower costs, and more reliable energy for their families.
“The two areas that this will be felt for every family are in lower energy costs and also in lower grocery or food prices as transportation of these things becomes easier on rail, or exporting grain reduces the price, for instance, ” said Wittevrongel.
Whether policymakers take action remains to be seen, but with growing trade pressures and investment uncertainty, the conversation around energy corridors is needed now more than ever.
A majority of Americans say it is more important for the U.S. to establish energy independence than to fight climate change, according to new polling.
The poll from Napolitan News Service of 1,000 registered voters shows that 57% of voters say making America energy independent is more important than fighting climate change, while 39% feel the opposite and 4% are unsure.
Those surveyed also were asked: Which is more important, reducing greenhouse gas emissions to combat climate change, or keeping the price of cars low enough for families to afford them?
Half of voters (50%) said keeping the price of cars low was more important to them than reducing emissions, while 43% said emissions reductions were more important than the price of buying a car.
When asked, “Which is more important, reducing greenhouse gas emissions or reducing the cost and improving the reliability of electricity and gas for American families?”, 59% said reducing the cost and increasing the reliability was more important compared to 35% who said reducing emissions was more important.
The survey was conducted online by pollster Scott Rasmussen on March 18-19. Field work was conducted by RMG Research. The poll has a margin of error of +/- 3.1 percentage points
Dan McCaleb is the executive editor of The Center Square. He welcomes your comments. Contact Dan at [email protected].
