00:00AI is becoming a bigger part of the energy complex as surging data center demand puts increasing pressure on the
00:06U.S. power grid.
00:07Williams says that natural gas infrastructure will be critical to meeting that demand.
00:12Joining us now is CEO Chad Zimarin.
00:15And Chad, I'd be remiss if I didn't mention where you started this month, and that was with record first
00:21quarter results.
00:22You talked about this being the golden age for energy infrastructure.
00:25Just how much of a step change are we witnessing on the demand for energy tied to the AI boom
00:32versus more traditional gas demand?
00:35Yeah, thanks, Dave. It's pretty remarkable.
00:37I mean, we've seen incredible demand growth over the last 10 years.
00:40We've grown in the country natural gas demand growth by about 50 percent.
00:45But we're going to actually grow over the next 10 years more than the last 15 years of growth.
00:50And so we're seeing an acceleration of growth for natural gas.
00:54I mean, it is our fastest, most dispatchable.
00:57It's our most abundant resource.
00:59You know, excluding transportation fuels, natural gas is about half of the primary energy that we use here in the
01:04United States.
01:05So it is a super critical resource that we have to power this next generation of AI.
01:10Yeah, I wouldn't be surprised, Chad, if you told me you're going to grow as fast in the next five
01:15years as you have in the last 15,
01:17because the demand is so huge.
01:20And yet we don't see such incredible price appreciation.
01:24I mean, we're relatively well insulated from what's going on in the Middle East.
01:29And why do you think that that demand hasn't boosted the price even further?
01:35Yeah, this is what's so important to understand about what really has become our country's superpower.
01:40And it's something that we have to really be both proud of but make sure that we lean into and
01:44preserve.
01:45You know, we produce 40 percent more natural gas than we consume domestically.
01:49We have become the world's dominant producer of natural gas.
01:52We produce more than the next three countries combined.
01:55That's Iran, Russia and China.
01:57So this is a really important superpower that we have as a country.
02:00We only produce about three percent more liquid fuels than we consume domestically.
02:04That's why when you see global disruptions, you see that affect prices here at home.
02:08When we have this great buffer of natural gas production in the United States, it protects us from global disruption.
02:15It's why we see gas prices today are about three dollars per MBTU.
02:19That's about the energy cost equivalent of 34 cents per gallon gasoline.
02:22It is by far our most affordable but also, and importantly, our superpower from an energy production perspective.
02:29Does that mean, Chad, that you're confident in American resiliency should the Strait of Hormuz remain closed, should energy prices
02:37globally continue to climb?
02:39You know, certainly from a natural gas perspective.
02:42I mean, I mentioned, unfortunately, you know, we have a tighter supply and demand balance for liquid fuels here in
02:47the United States.
02:48But, you know, natural gas production is certainly something that will continue to keep us buffered from dislocations around around
02:56the world.
02:56In fact, you see prices today are lower for natural gas than they were during the winter, which is really
03:01when our peak demand happened.
03:02We're in the shoulder months right now for natural gas demand.
03:06We'll see that demand pick up during the summer as power loads pick up so that we can, you know,
03:11run air conditioning during the hot months of the summer.
03:14But, again, we think that natural gas will remain affordable, and it's important that that will help keep prices down
03:20for energy here in the United States.
03:22So, yeah, we continue to believe that supplies will be able to respond to demand.
03:27How closely, Chad, are you working with hyperscalers or with, you know, neocloud companies that are building, you know, massive
03:36gigawatt-sized campuses and need energy delivered, need to have those solutions engineered?
03:45Yeah, very closely, Matt.
03:46So, you know, we move about a third of the nation's natural gas.
03:49We deliver to all the major utilities truly across the country.
03:53That powers a lot of the existing data centers.
03:56But what we understand is that, you know, the grid just isn't keeping up with this incredible demand.
04:00In fact, we haven't grown electricity production as a country in about 25 years in a meaningful way.
04:05And so now you've got this very energy, electricity-intensive data center demand that is coming.
04:11So instead of burdening the existing grid, we're bringing projects directly to data centers, siting power generation on our natural
04:19gas infrastructure.
04:20We're not burdening the consumer.
04:22We're going to make sure that we can do that in a way that is affordable for the customer but
04:26also doesn't impact rates for consumers.
04:29We're going to make sure that those projects can be delivered fast.
04:31So our first project's being commissioned right now.
04:33We've announced five projects so far, about $10 billion of investment.
04:37First project was announced a year ago.
04:39We're already starting the commissioning.
04:41And so that's how we think you win the race for this next generation of artificial intelligence.
04:46You know, there's been – there had been talk about natural gas as a bridge fuel.
04:52But does this become really the backbone fuel for the AI infrastructure?
04:57Yeah, I think it's important to understand, you know, there really isn't this either or when it comes to energy
05:03in our country.
05:04And natural gas, we've proven that anywhere where we get smart energy policy right – you know, Oklahoma, I'm here
05:10in Tulsa, Oklahoma, where our company's been headquartered for over 100 years.
05:13You know, here we've got a tremendous wind resource.
05:16The reason why energy prices stay low and we can balance the intermittency of wind is because we've also got
05:23natural gas that picks up the slack.
05:24When the wind's not blowing, natural gas is picking up the slack.
05:28And so the reality is we need a balanced strategy for bringing energy to scale.
05:32And so we think natural gas will be truly one of our most important energy resources for a very long
05:39time to come.
05:39Chad, moments ago you mentioned that there is an infrastructure in place.
05:42And part of what you're doing is to make sure consumers don't pay for higher energy costs as AI consumes
05:47more.
05:48But we have seen the president, we've seen state regulators try to step in and try to lessen the burden.
05:54I just wonder if you and your industry right now are preparing, even though you're not directly passing on costs
06:00to consumer,
06:01but if you are directly preparing for more regulation to come in, especially in the 2026 midterm seasons with affordability
06:08on the ticket.
06:09Yeah. You know, what we're actually hoping for, Danny, is that we see permitting reform here in the United States.
06:14The issue that's really driven up costs from an energy utility perspective has actually not been the cost of the
06:20supply.
06:21It's been the infrastructure that can't deliver it to market.
06:24And so, you know, for example, we see in New England some of the highest energy prices in our country.
06:28New England sits about 120 miles away from northeast Pennsylvania, where we have some of the lowest cost energy supplies.
06:36The problem is we haven't built any pipeline infrastructure to connect those supplies to those markets.
06:41And so, you know, last year the House passed three permitting reform bills that are now in the Senate.
06:46We actually hope that the Senate will act and act fast.
06:49If you really want to drive down costs for consumers, we have to deliver more natural gas in particular.
06:54Again, 34 cents per gallon gasoline energy equivalent.
06:57It is our country's affordability superpower.
07:01And so we think that, you know, Congress should act and we hope to see something happen this year.
07:06But that we think would be the most impactful means of lowering costs for consumers.
07:11You know, we always hear companies say you can have something fast, you can have something cheap, you have something
07:17done right.
07:18But you can't have all three, right?
07:21In terms of what hyperscalers are asking for, I guess you could add a carbon footprint if they still care
07:26at all about that.
07:27So those are four things.
07:29What are they asking for?
07:31Do they want it quick?
07:31Do they want it cheapest?
07:32Do they want it most reliable power source?
07:35And do they care about carbon footprint?
07:38Yeah, I think they do.
07:39And I would tell you that that's, you know, I think of our company as not a natural gas company.
07:44I mean, we're an energy infrastructure company.
07:46It just so happens to be that when we run the math on what you just described, balancing reliability, speed,
07:52affordability, and low emissions,
07:54that's why we land on natural gas today as being the most impactful solution that we have at scale.
08:00And I do think that hyperscalers recognize that we need the dispatchability, the speed of natural gas so that we
08:07can, you know,
08:08expanding the grid on average takes six, eight years.
08:12Delivering high voltage transmission lines can take a decade.
08:15And so we've got to be able to bring projects like we're doing in, you know, 12 to 18 months
08:20so that we can truly reach full potential from this incredible AI opportunity.
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