Analysis-Alberta pitches cheap natural gas for data center boom, at odds with Canada's clean power aims
CALGARY, June 9 (Reuters) - Alberta is touting its abundant supply of cheap fossil fuels to entice tech companies to build data centers for the AI boom, a move that would undermine Canada's plan to link new data center development with clean energy expansion. Canada is the world
CALGARY, June 9 (Reuters) - Alberta is touting its abundant supply of cheap fossil fuels to entice tech companies to build data centers for the AI boom, a move that would undermine Canada's plan to link new data center development with clean energy expansion.
Canada is the world's fifth-largest producer of natural gas, around 60% of which comes from Alberta. As well as huge fossil fuel reserves, the western province boasts a cooler climate that can offset the cooling costs of data center infrastructure and plenty of available land. All that can make operating data centers more cost-efficient than in the United States, where they are facing pushback from communities and lawmakers.
Tech companies could also create a new market for long-suffering natural gas producers in Western Canada, where drillers face a multi-year supply glut and at times have had to pay customers to take their gas when prices have turned negative.
But a rapid expansion of data centers in Alberta would disrupt Canada's plans to power the AI boom using clean hydro, renewables and nuclear. While natural gas is a cleaner power source than coal or oil, as a fossil fuel it still contributes to emissions.
Prime Minister Mark Carney has said Canadian data centers will run on "some of the cleanest power in the world." His government's June 4 AI strategy — which aims to speed up Canada's adoption of artificial intelligence — highlighted how more than 83% of the country's electricity grid comes from renewables and low-emission power sources.
Canada currently has only five functioning data centers at the so-called hyperscale level, demanding at least 50 megawatts of electricity capacity, equivalent to the power needs of a small city.
But nearly 100 more are in the works and 90% of those are planned for Alberta, where the emissions intensity of the province's electricity grid is almost five times the national average, research from York University shows.
"We're essentially looking at these data centers as digital pipelines and digital refineries for us to help get the value from our natural gas to global markets, but in a creative modern way," Alberta's Technology Minister Nate Glubish said in an interview.
