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

Post by rconti » Mon, Jun 22, 2026, 4:39 PM UTC

dtagames wrote: post #10

epistasis wrote: post #6

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 surp…

Mostly it says that the oil business runs the show here in Texas, and in Washington.

Post by caminante » Mon, Jun 22, 2026, 4:42 PM UTC

auspiv wrote: post #21

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 oi…

Post by epistasis » Mon, Jun 22, 2026, 4:44 PM UTC

stonogo wrote: post #39

epistasis wrote: post #33

Earlier quoted context omitted.

This might make sense for oil producers to get rid of their natural gas, which is nearly a waste material, but I'm struggling to understand how it makes sense for Microsoft. Despite the cheap natural gas, and an abundance of investors and builders with natural gas expertise, in the competitive electricity generation market everybody is deploying solar and batteries in west Texas because it's still more profitable tha…

The cost of gas is completely irrelevant. In order to bring a new large load onto the grid, you have to coordinate with ERCOT, and they just made that process more tedious. Once you get your grid connection approved and built out, you have to source your own power anyway, and frankly there just isn't enough power on the market to realize the stated datacenter buildout goals in this country. In short, you're going to…

Post by stonogo » Mon, Jun 22, 2026, 4:51 PM UTC

epistasis wrote: post #45

stonogo wrote: post #39

Earlier quoted context omitted.

The cost of gas is completely irrelevant. In order to bring a new large load onto the grid, you have to coordinate with ERCOT, and they just made that process more tedious. Once you get your grid connection approved and built out, you have to source your own power anyway, and frankly there just isn't enough power on the market to realize the stated datacenter buildout goals in this country. In short, you're going to…

> Gas is the cheapest, fastest zero-to-production choice for onsite power generation, and has been for a long time. Is it, though? There's a ton of projects out there waiting to get their solar on the grid in west Texas, partnering with one of them and launching the project early while waiting on the interconnection queue, and adding enough batteries, gives a more robust solution right now without the SPOF nature of…

Post by epistasis » Mon, Jun 22, 2026, 4:55 PM UTC

stonogo wrote: post #47

epistasis wrote: post #45

Earlier quoted context omitted.

> Gas is the cheapest, fastest zero-to-production choice for onsite power generation, and has been for a long time. Is it, though? There's a ton of projects out there waiting to get their solar on the grid in west Texas, partnering with one of them and launching the project early while waiting on the interconnection queue, and adding enough batteries, gives a more robust solution right now without the SPOF nature of…

> Is it, though? Yes. There is no point in waiting for interconnection when you can just... not do that, and do all your generation behind the meter, with complete control of the generation to match your load. Solar wants an interconnect so they can sell off surplus; with gas you just turn the dial down to meet the load and walk away. The clock is running on the datacenter goldrush. 70-90% of the capex window is goin…