Data Center Buildout, Natural Gas Demand Seen Surviving Political Backlash
Key Takeaways
- •Former FERC Chairman Neil Chatterjee views the 2026 midterm elections as an early litmus test of political opposition to data center development.
- •Chatterjee characterizes the backlash against data centers as growing pains and does not expect it to slow long-term development.
- •Data center growth has become central to U.S. energy policy debates amid surging demand from AI and cloud computing.
- •Local opposition in several states targets data centers' electricity use, water consumption, and strain on utility rates.
- •Federal regulators and grid operators are still weighing how to allocate the costs of new transmission and generation, and major federal policy shifts are considered less likely.
The 2026 midterm elections may provide an early test of the staying power of the political headwinds currently facing data centers across the United States, but they are unlikely to slow development over the long term, according to former Federal Energy Regulatory Commission (FERC) Chairman Neil Chatterjee.
The political friction reflects broader tensions over how quickly the electric grid can absorb surging demand from artificial intelligence and cloud computing, which has put data center growth at the center of national energy policy debates, including discussions over the role natural gas generation can play in meeting that load. Local opposition has emerged in several states over data centers' electricity use, water consumption, and strain on utility rates, while federal regulators and grid operators continue to weigh how to allocate the costs of new transmission and generation.
At a Glance:
- Midterms first litmus test
- Backlash part of 'growing pains'
- Federal policy shifts less likely
Source: Natural Gas Intelligence
