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Chevron signs 20-year power agreement with Microsoft for West Texas data center

152 points by cdrnsf

by auspiv

6 subcomments

The current natural gas price in West Texas (the WaHa hub, north of Coyanosa, TX) is negative. And has been for a while. The price peaked (dipped?) to -$9/MCF a couple months ago. That means gas producers had to pay $9 per MCF for it to be taken away. Oil in the Permian comes with gas, a lot of it, so to produce oil, you need to get rid of gas. Wells I'm familiar with have 4000-5000 cubic feet of gas per barrel of oil. Recall in oilfield M = thousand, so that's 4-5 MCF per bbl of oil.
There is no free gas pipeline capacity to get gas out of West Texas. Any time new pipelines are built, they are filled within months.
This makes a ton of sense for oil producers (which are also gas producers) who can sell their gas for less of a loss (potentially a profit!) and also for MSFT who can lock in long term contracts for minimal cost. I'd guess these contracts are for $1-2/MCF which is win/win for the oil companies in the area and MSFT.

by epistasis

6 subcomments

Fascinating they're going this direction when solar and batteries are so cheap in Texas...
Nearly all new additions to the grid are solar, wind, and storage right now on Texas' grid. Not because of Texas regulations, but because Texas' grid is one of the few grids where generation decisions are all made by independent investors trying to make money.
Especially with the shortage in gas turbine manufacturing, very surprising! Not sure if this says more about Microsoft or datacenters.

by advisedwang

2 subcomments

Microsoft says [1] they're going to be carbon negative by 2030. Hard to see them doing that while deploying gigawatts of new fossil fuels.
[1] https://www.microsoft.com/en-us/corporate-responsibility/sus...

by jmward01

1 subcomments

I love how they are using a company named 'Solar Turbines'. Such an obviously misleading name. (From their website)[1]:
Powering the future through innovative, sustainable energy solutions.
Solar Turbines Incorporated, headquartered in San Diego, California, is a wholly owned subsidiary of Caterpillar Inc. Solar manufactures the world’s most widely used family of mid-sized industrial gas turbines, ranging from 1 to 39 megawatts. More than 17,000 Solar units are installed in more than 100 countries with more than 3 billion operating hours. Solar is a leading provider of energy solutions, featuring an extensive line of gas turbine-powered compressor sets, mechanical drive packages, and generator sets.
[1] https://www.solarturbines.com/en_US/about-us.html

by bob1029

0 subcomment

> A majority of the generation will come from large GE Vernova (NYSE: GEV) turbines and associated electrical infrastructure, with additional capacity provided by Solar Turbines, a wholly owned subsidiary of Caterpillar Inc. (NYSE: CAT).
When they say "large GE Verona", they mean the 7HA. This is an actual power plant with proper emissions controls. Not the aeroderivatives in parking lots we've seen so far.
> Their plan includes the use of seven U.S.-made GE Vernova Inc. GEV 7HA natural gas turbines to deliver the plant's initial capacity.
https://finance.yahoo.com/sectors/energy/articles/chevron-mi...

by mixdup

1 subcomments

I guess that whole carbon negative by 2030 goal got shuffled down the priority list

by jackbucks

0 subcomment

Chevron and Microsoft agree to keep smoking crack and buy it for each other when needed and not tell anyone.

by happosai

1 subcomments

Yes, the planet got destroyed. But for a beautiful moment in time we created a lot of value for shareholders
- A Microsoft employee 2080

by julosflb

3 subcomments

And in the mean time, western europe is having its second heat wave even before summer starts.

by clearstack

1 subcomments

capex certainty for 20 years. smart if AI demand holds, very expensive if it doesn't

by ck2

3 subcomments

With all the fracking in the USA, literally exponential growth, one of the things they do is gas burn off for months, sometimes years at all the sites
Why not use all that wasted heat energy to power all these datacenters?
(and why not build the datacenters at the Bakken formation)
You can see the burnoff from SPACE and it's for months at a time at each location, tell me that does nothing to global temperatures?
(look at the date on these photos, two decades of burnoff wasted energy)
* https://www.cnbc.com/2013/01/28/shale-gas-boom-now-visible-f...
* https://www.smithsonianmag.com/smart-news/at-night-giant-fie...

by ETH_start

1 subcomments

I think one of the highest-leverage U.S. economic strategies right now is to maximize the upside from the AI data-center boom.
That means reducing any bottlenecks around not just data-center construction, but also adjacent industries like power generation and transmission.
If the U.S. can scale the infrastructure around AI faster than other countries, it can gain a decisive economies of scale advantage in numerous industries that could lead to export boom.

by jeffbee

0 subcomment

I had to go read the article to check because other operators have been entering into PPAs with oil companies, but for photovoltaic power. E.g. Google and TotalEnergies.
https://pv-magazine-usa.com/2026/02/09/totalenergies-signs-1...
Also Google and itself. I guess there's a difference between Google and Microsoft after all.
https://storage.googleapis.com/gweb-uniblog-publish-prod/doc...

by egorfine

0 subcomment

So we should expect even more AI bullshit in Windows 12.

by yobid20

0 subcomment

chevron 6 is locked in place

by theredleft

0 subcomment

lol no way it lasts that long

by flixspiek

0 subcomment

[flagged]

by jocelyner

0 subcomment

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by 1-6

3 subcomments

[flagged]

by whalesalad

3 subcomments

> A majority of the generation will come from large GE Vernova turbines and associated electrical infrastructure, with additional capacity provided by Solar Turbines, a wholly owned subsidiary of Caterpillar Inc.
Solar turbines is an interesting name for a gas turbine company. "It's green energy, we put solar in our name"

by 21asdffdsa12

4 subcomments

Sorry, but who in his right mind, signs contracts for 20 years - could you have imagined the world today 20 years ago? No and no. All one should do is sign snippet contracts of 5 years with the offer of an option to predefined condition. Split it into 4 sequences with a renewal.