By David Holt
America stands at a historic energy crossroads that is arguably as critical to our future global leadership as was the completion of the Transcontinental Railway or the interstate highway system. The decisions we make today about our energy future will determine whether we lead or follow in the global AI revolution and whether we maintain our economic edge over China.
To understand the magnitude of what’s coming, we need to look at where we’ve been. From 1920-2021, America’s energy consumption grew fourfold – electricity consumption alone grew 100-fold – as we transformed from a developing industrial nation to the world’s leading economic superpower.
This massive expansion fueled unprecedented prosperity for American families, farmers, and businesses. It spurred incredible innovation, efficiency, and conservation in everything from transportation and distribution, medical care, the digital revolution, manufacturing, farming, textiles, milling, construction, appliances, plastics, and even personal leisure.
But something interesting happened in recent decades. After generations of steady growth, our energy consumption leveled off. Over the past 20 years, we actually saw a slight decline in total energy use – about 4% – despite continued economic and population growth. This plateau reflected improved efficiency and structural economic changes.
It also bred legislative and policy complacency, as evidenced by the fact that the North American Electricity Reliability Corp., responsible for ensuring a robust grid, has in recent years increasingly warned of greater imbalances to our power systems, leading to higher potential for blackouts and brownouts. In spite of these warnings, many political leaders have persisted in pursuing draconian energy mandates and excessive regulatory oversight that limit our ability to fully use all energy options.
The result is a once world-class power structure that has fallen behind, risking more expensive and less reliable energy for families and business all across the country.
Couple that bit of worrying news with the fact that we are now embarking on the single greatest change to our energy infrastructure in the past 100 years, with energy demand expected to increase dramatically in the coming years.
With the AI revolution upon us, energy forecasts now show we’re entering an era of explosive demand growth that will make the 20th century’s expansion look modest by comparison. Multiple analyses predict U.S. electricity demand will surge by 35-50% between now and 2040, with much of that growth concentrated in the next decade. We’re looking at annual growth rates approaching 3% – levels not seen since the 1980s.
This isn’t gradual change – it’s a fundamental shift that will stress our energy infrastructure beyond anything we’ve experienced. By some estimates, we’ll need to add 128 gigawatts of new electricity capacity in just the next five years. That’s like building power for 13 cities the size of New York, practically overnight.
What’s driving this unprecedented surge? In a word: data. The rise of artificial intelligence, advanced computing, and electrification are creating massive new power demands. Data centers alone could account for nearly half of new electricity demand by 2028. Companies like Meta are investing billions in facilities that stretch for miles and require dedicated power plants just to operate.
This brings us to the central challenge of our time: America cannot win the AI race without abundant, affordable, reliable energy. Full stop. America must win the AI race.
AI isn’t just energy-intensive – it is essentially energy transformed. Each ChatGPT query consumes roughly 10 times the energy of a standard Google search. The computing centers powering the AI revolution need enormous quantities of electricity that’s available 24/7 without interruption.
China understands this connection perfectly. They’re rapidly expanding their energy infrastructure – including coal, natural gas, nuclear, and renewables – to fuel their AI ambitions. They recognize that energy leadership and AI leadership are inseparable, and they’ve made both national priorities.
Meanwhile, we’ve spent years debating which energy sources should be allowed rather than focusing on the fundamental question of how to free the market to ensure we produce more of all types of energy at the lowest cost, most efficient, and reliable means possible. This policy failure in Washington and states such as California and New York over the past few years has produced predicable results: reliability problems, with power outages more than doubling since 2016, and electricity prices climbing to painful levels in states that restrict energy options.
By declaring a National Energy Emergency, President Trump’s administration has signaled a much-needed shift toward energy realism. By streamlining permitting, expanding domestic production across all energy sources, and establishing the National Energy Dominance Council, we’re finally aligning our energy policies with the massive challenges ahead.
That covers the big picture – but we need to move faster at the state and local levels to ensure we have policies right – policies which support expanded energy options and faster permitting approvals – all designed to hasten progress by advancing prudent, responsible energy choices.
The U.S. Energy Department estimates that data centers could account for 12% of our nation’s electricity demand by 2028 – triple their current load. If we can’t meet this demand with affordable, reliable energy, the economic consequences will be far-reaching and potentially severe.
Nations that succeed in the energy-AI nexus will dominate the global economy for generations. Those that fail will see their industries migrate to energy-abundant regions. The economic logic is inescapable – energy is foundational to prosperity, and prosperity follows energy abundance.
As AI becomes central to commerce, manufacturing, healthcare, defense, and everyday life, the pressure on our energy systems will intensify beyond anything in our history. Getting energy policy right is now more than just keeping the lights on – it’s about maintaining American leadership in the defining technological revolution of this era.
The path forward is clear: we need massive investment in new generation capacity across all energy sources. We need policies that facilitate energy abundance rather than artificially constraining supply. And we need to move with unprecedented speed.
The soaring demand projections we’re seeing aren’t just statistics – they’re a clarion call that America’s energy future must be built on pragmatism, not ideological preferences that take options off the table. Our families, farmers, small businesses, and national security depend on getting this right.
The energy decisions we make today will determine whether America leads the AI revolution or watches from the sidelines. Let’s choose leadership.
This article originally appeared at Real Clear Energy
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