North Carolina Regulators Reject Duke Energy Gas Power Plant

Natural gas output in the United States is expected to reach record highs in 2026 and 2027, as the country ramps up production and seeks to fill the gap created by restrictions on energy trade through the Strait of Hormuz. However, as the U.S. doubles down on its gas ambitions, a judge has ruled that a North Carolina gas power plant should not proceed.Both the supply and demand of U.S. natural gas are expected to rise to record highs this year and next, according to the U.S. Energy Information Administration (EIA). Dry gas production is expected to rise from a record 107.6 billion cubic feet per day in 2025 to 111.7 bcfd in 2026 and 115.9 bcfd in 2027, according to EIA data. Meanwhile, domestic gas consumption is projected to increase from a record 91.9 bcfd in 2025 to 92.2 bcfd in 2026 and 94.3 bcfd in 2027.The EIA revised its predictions upwards for the year in September compared to August, when it said it expected production to reach 111.2 bcfd and demand to total 92.0 bcfd. The EIA now expects average U.S. liquefied natural gas exports to increase from a record 15.1 bcfd in 2025 to 17.4 bcfd in 2026 and 18.6 bcfd in 2027.While China dominates several energy sectors, the United States has established its reputation as the world’s dominant natural gas power. China outpaced U.S. natural gas development for several decades; however, this is now changing due to the rush to build data centres for AI in the United States, according to a Global Energy Monitor (GEM) report.The United States is now constructing around twice as much gas-fired capacity as China, and more than any other country worldwide, following a 76 per cent rise in under-construction projects in the first half of the year. The U.S. gas power capacity at any stage of development has risen by 50 per cent, from 252 GW to 378 GW, since January, which contributes a third of the global total. If all of these projects are completed, the United States will increase its gas fleet by around two-thirds, at a capital cost of over $647 billion, the report found. Roughly half of the new capacity being developed is directly linked to the rapid development of data centres across the country. Many operators are opting to power AI data centres with gas rather than renewable energy, a shift expected to significantly increase U.S. carbon emissions over the next decade. United States spending on gas- and coal-fired power plants is expected to exceed China’s for the first time in several decades, according to the International Energy Agency.Jenny Martos, a project manager at Global Energy Monitor, explained, “There has been an enormous surge in data centre proposals powered by gas in the past year, and the climate implications of that are huge. Building all of this gas for AI locks in decades of pollution, and it is also locking in dependence on a volatile fuel cost, which will get passed down to rate payers.”Tech companies have invested heavily in purchasing the most efficient gas turbines for new gas power plants, creating a backlog for the technology and forcing several tech companies to invest in smaller, less efficient, more polluting turbines. In recent months, there has been increasing criticism over the environmental impact of data centres, as activists and residents call for stricter regulation of the sector. However, the Trump administration has championed the construction of new data centres and eliminated environmental reviews to help accelerate construction in the run-up to the midterm elections.Nevertheless, in September, the Republican Party-controlled North Carolina Utilities Commission rejected a $500 million 250-megawatt natural gas project from North Carolina’s largest utility, Duke Energy, citing President Donald Trump’s Ratepayer Protection Pledge. Duke wanted to develop a gas plant to power a 21-building Amazon facility under construction near Charlotte.However, commissioners argued that Duke had not adequately demonstrated how consumers would be shielded from construction costs, as outlined in the Ratepayer Protection Pledge, a voluntary agreement introduced by the White House under which companies agreed to protect American consumers from price hikes driven by data centre energy and infrastructure requirements. Commissioners said that if Duke planned to reapply for construction permission, it would be required to offer cost recovery mechanisms that comply with the voluntary agreement.The rejection comes amid concerns about rising consumer energy costs in relation to data centre development. American consumers have seen their utility bills increase significantly since Trump came into power, at a rate faster than inflation over the summer months, according to a recent Bank of America report.The United States has announced a record-breaking natural gas pipeline project in recent months, which is expected to make it the dominant global gas producer and supplier. Much of this development is associated with the rapid construction of data centres across the country. However, the recent rejection of a proposed Duke Energy gas plant suggests that some U.S. authorities are feeling pressure from consumers to restrict development that lacks clear cost-recovery guarantees.By Felicity Bradstock for Oilprice.comMore Top Reads From Oilprice.comBeijing's Iran Oil Trade Draws Fresh Criticism From Capitol HillVenezuela Oil Output Could Hit 1.8 Million Bpd By 2030, Rystad SaysNigeria Joins IEA As Crude Output Hits Six-Year High