Beyond the Meter
“Tell me what you pay attention to & I will tell you who you are” - José Ortega y Gasset
Editor’s note: weekly publishing going forward.
Last week, we published on Nebius (a NeoCloud), highlighting the lack of substance to Jim Chanos’s critiques of the NeoCloud buiness model; the share price has rebounded by 30%+.
BEHIND THE METER.
Go-forward datacenter power demand is beyond grid capacity.
That’s not new news.
In 2025, ~10% of US datacenters had any onsite generation.
Regarding new datacenter projects, we expect that over half will prominently feature onsite generation.
Per Bank of America, ~160GW of planned onsite gas generation projects are in the works (by the way, BoA’s latest report is excellent & well worth the read).
Unsurprisingly, gas producing regions represent most of the projects. Texas alone is responsible for ~60GW of projects in various stages of development.
Ohio, Pennsylvania, & West Virginia combine represent another ~40GW.
Assuming half of the projects come to fruition at ~80GW of BTM gas, 440 TWh of implied BTM gas generation works out to roughly 10-11 Bcf/d of incremental demand, at simple-cycle heat rates if fully realized.
And, this demand forecast has been a hot conversation…
DYNAMIC SYSTEMS.
Matt Smith has made a controversial return as a podcast guest to Invest Like the Best.
Among other ventures, Smith was previously the Founder / CIO of Deep Basin, a data driven energy equities hedge fund.
In his latest podcast appearance, Smith put forward a natural gas thesis which was a masterclass in precision applied to a static picture.
His forecast is granular, modeling every well, pipeline, and processing plant in the incumbent basins, and - in doing so - he has built a snapshot of the gas market as it exists at $3.50/mcf, extrapolating that snapshot into a world where prices supposedly go "unbounded".
The flaw: his demand side is dynamic, but his supply side is frozen.
The ever-clever X account NextWaveEFT succintly captured the analytical flaw & the major implication in his review of the interview:
“What I believe Matt [Smith] and many others miss is in 10 years, in a $4-5/mcf world, it’s likely we once again have 100 nat gas operators across the L48”
OTHER NEWS.
Brent hit $100 on continued Iran-related conflicts
Lastest disconnects on datacenter discourse
That’s it for this week - hope y’all enjoy the weekend -