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

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

#131

Post by drysine »

hvb2 wrote: post #95
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…

I don't understand why datacenters especially shouldn't be able to run mostly on renewables. This won't apply to every datacenter, but the AI inference ones especially, should be seeing most demand during the day. So what's built in north America is used when it's daylight there? If so, isn't that a perfect case for solar? To be clear, I'm not saying it can power down, but at night it should be able to scale down sig…

The most of the cost is GPU, not power.

Demand for AI is global (except for Anthropic, haha).

When you build a DC that works only when the sun is shining, you are wasting half of you GPU capacity

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

#132

Post by jillesvangurp »

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…

Gas turbine production is fully committed for years to come. There is no way to speed up production quickly. And for manufacturers of turbines, building new production capacity is a highly risky proposition because demand might well evaporate for these things. So they are reluctant to do that.

If you want power quickly, wind, solar, and battery can be planned, installed, and producing power within a couple of years. Nothing else comes close to being that quick. If you want power this decade, that's pretty much the only thing available.

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

#133

Post by jillesvangurp »

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…

Gas and petrol are technically by products of oil refineries that produce all sorts of chemicals. Before cars took off, refineries used to dump petrol in rivers as it was worthless. Petrol is still in demand but facing world wide double digit percentage declines as a quarter of the vehicles being sold is now electric. These vehicles don't require any petrol/diesel. That is closer to 50% in China and the rest of the world is buying lots of these things. By the mid 2030s, most vehicles sold will be electric world wide. That means a lot of refineries that are currently subsidizing chemical production with petrol and gas sales, are going to face some serious demand issues for these by products over the next decades.

Texas is going to be somewhat shielded from this because of US policy on this front. But probably only for a few short years. Mostly LNG exports are currently very lucrative. But LNG production is bottlenecked on expensive infrastructure and shipping. And of course lots of importers of LNG are looking for more affordable alternatives as well because it is expensive. Doubly so since the recent Gulf conflict. A lot of planned infrastructure expansion just got cancelled.

So, there's probably a bit of gas overproduction happening in Texas currently and that's going to cause predictable issues when demand is going to be structurally lower. And the double whammy of petrol/diesel also going into structural decline is going to leave Texas with a lot of over production.

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

#134

Post by aspenmayer »

jmward01 wrote: post #129
acheron wrote: post #127

Earlier quoted context omitted.

Maybe you should have looked it up before posting?

I'll take a minute to respond here. Would you rather live in a world where people admit they made a mistake and thanked people that pointed it out or one where they didn't? You just sent a reward signal to the 'don't ever admit your mistakes' world in case you didn't realize.

It’s also fair to say that there’s another possible world you haven’t mentioned: one where you’re both right.

In such a world, you would have looked it up before posting, and your comment, their reply to you, yours to them, and mine to you, wouldn’t exist.

Perhaps they were trying to send a reward signal to all of us in this thread in order to induce a shift from where we find ourselves now in order to arrive upon the “look it up before posting” world line?

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

#135

Post by blitzar »

sajithdilshan wrote: post #104
happosai wrote: post #79

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

The planet go destroyed millions of times during its 4 billion history. I'm pretty sure it will survive this time as well.

Shareholder value has been destroyed millions of times and they survived just fine too.

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

#137

Post by rwyinuse »

drysine wrote: post #131
hvb2 wrote: post #95

Earlier quoted context omitted.

I don't understand why datacenters especially shouldn't be able to run mostly on renewables. This won't apply to every datacenter, but the AI inference ones especially, should be seeing most demand during the day. So what's built in north America is used when it's daylight there? If so, isn't that a perfect case for solar? To be clear, I'm not saying it can power down, but at night it should be able to scale down sig…

The most of the cost is GPU, not power. Demand for AI is global (except for Anthropic, haha). When you build a DC that works only when the sun is shining, you are wasting half of you GPU capacity

That's why you build batteries that can store electricity for the other half. Or maybe nuclear power.

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

#138

Post by rwyinuse »

nba456_ wrote: post #81
julosflb wrote: post #35

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

If Europe was as willing to drill for gas as the US is, they'd probably be able to run more ACs and save thousands of lives every year.

No need for that when solar power and nuclear exist. The problem in Poland, Germany etc is prematurely getting rid of perfectly good nuclear power plants, not lack of gas drilling.

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

#139

Post by pseudohadamard »

epistasis wrote: post #33
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…

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…

There's an efficient gas turbine shortage. If you're willing to run older inefficient gas turbines it's not so bad, and when the gas is free it doesn't matter how inefficient they are.

Oy vey, what a perverse incentive.

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

#140

Post by SJC_Hacker »

epistasis wrote: post #18
bob1029 wrote: post #15

Earlier quoted context omitted.

West Texas is like Costco for natural gas. There are cases where the fields can produce more than the pipelines can carry away. If you put your gigantic gas turbines right next to the fields you can obtain access to some extremely cheap fuel. They might even pay you to burn it sometimes. Negative gas prices are a thing.

And despite that, when there's any sort of price pressure, like there is for new electricity grid additions from investors, solar and batteries completely dominate the choice over natural gas in Texas. Look at the map for 2026 of the grid buildout in Texas at the bottom of this page: https://www.eia.gov/todayinenergy/detail.php?id=67205 All solar and batteries (yellow and black), with a few tiny blue dots for gas. It…

Does that graph take into account capacity factor ?
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