Greg Abel Bets Berkshire's Gas Pipelines on Data Center Power Demand

What happened

Greg Abel spent decades running utilities before he took over as Berkshire Hathaway's CEO. He now presents electricity, not chips, as the main bottleneck for artificial intelligence. In a September 2 interview on CNBC, he said he had "always had the strong view that energy would be the constraint." He called AI data centers a "significant opportunity for Berkshire and Berkshire Hathaway Energy."14 He backed this with a specific figure: roughly 8% of the energy unit's load in Iowa came from data centers last year.18

The interview built on what Abel told shareholders in May at his first annual meeting as CEO. There he said Berkshire Hathaway Energy (BHE) expects data-center demand in Iowa to grow by 50% or more over five years. He also said the company's pipeline network carries about 15% of the natural gas consumed in the United States.3 That second number gets less attention than the Iowa statistic, but it is probably the more important one.

The gas angle is the real story

Most coverage of Abel's comments has focused on the utilities, MidAmerican Energy in Iowa and NV Energy in Nevada, because both sit in regions with heavy data-center construction.7 Abel himself linked the pipelines to the AI buildout at the May meeting. He described the gas network as growing structurally, as utilities add gas-fired generation to keep the grid stable.3

The asset base is large. BHE owns five U.S. interstate gas pipeline companies. Together they run about 21,000 miles of pipe with design capacity of 21 billion cubic feet per day, and they move about 8.2 billion cubic feet daily.15 Those lines include Northern Natural Gas, Kern River, and the transmission and storage business BHE bought from Dominion Energy in 2020 for $9.7 billion.15

The national generation mix explains why this matters. The U.S. Energy Information Administration expects natural gas to supply about 40% of American electricity in 2026 and 39% in 2027. Coal and nuclear each supply less than half that share.27 Any large new block of power demand will be met largely with gas, and that gas has to travel through pipelines.

Berkshire's AI exposure also reaches into manufacturing. Several outlets point out that Precision Castparts, the 2016 purchase that later led to an $11 billion write-down, is benefiting as gas turbines become one of the scarcest pieces of equipment in data-center power projects.67 Taken together, the pipelines, turbine parts and utilities give Berkshire a stake in nearly every step of turning gas into power for data centers.

Gas prices aren't reflecting the hype yet

The commodity market tells a quieter story than the AI narrative. Henry Hub gas traded around $3.26 per million British thermal units on October 15. That is up about 13% over the past month and about 11% from a year earlier.21 The EIA's October outlook forecasts an average of $3.48 for 2026 and $3.16 for 2027. It attributes the expected decline mostly to the January price spike after Winter Storm Fern, when Henry Hub averaged $7.72.27

Forecasts diverge widely. One survey of projections found bullish bank scenarios, including Morgan Stanley's, above $4 for 2026 through 2030, and Deloitte near $5.40 by 2030. All of them sit well above both early-October spot prices and the EIA baseline.24 Goldman Sachs has raised its estimates of U.S. data-center capacity to 64 gigawatts by the end of 2026 and 90 gigawatts by the end of 2027.24 Even so, futures markets are not pricing a shortage.

There are two main reasons. First, production is still strong: U.S. output hit a record in July.26 Second, data centers are not the biggest new source of gas demand. An S&P Global analyst estimated that data-center power demand will add about 4 billion cubic feet per day by 2030, while LNG exports will add more than 10 billion.23 Near-term LNG demand has also weakened, with outages at Freeport and maintenance at Cove Point removing over 2 billion cubic feet per day.22 Over a longer period, East Daley Analytics expects LNG terminals and data centers together to add more than 31 billion cubic feet per day of U.S. consumption by 2036, though pipeline constraints could hold that back.30

In our reading, this gap does not hurt Abel's position. It may actually help. Interstate pipelines earn money mainly by moving gas and charging for capacity. They do not depend on the gas price itself. Cheap, plentiful gas makes new gas-fired plants more attractive to build, and every one of them needs a pipeline connection. The same reasoning shows where the bottleneck sits. Gas supply is ample. Delivery capacity and generation equipment are scarce, and Berkshire owns businesses in both.

Where the coverage agrees, and where it doesn't

The coverage agrees on the basic picture. Abel is pursuing AI through two routes: a much larger Alphabet stake, now Berkshire's third-largest equity holding, and selling power through BHE.418 Outlets also consistently report his main condition: BHE will not serve hyperscalers if doing so raises bills for its existing customers.119

The details vary. The May transcript describes data centers as 8% of peak load in Iowa.3 Reuters' summary of the CNBC interview simply calls it 8% of load.18 Estimates of the national picture also differ. One report puts data centers at 4% to 5% of U.S. electricity use19, while commentary cited elsewhere says 7%.4 Some analyses cite larger company figures: about 11 gigawatts of contracted data-center load, with peak use above 2.2 gigawatts in 2025.166 These figures come from secondary analyses rather than Abel's own remarks, so treat them as indicative.

Outlets also disagree about how much any of this matters to Berkshire's earnings. BHE earned more than $2 billion after tax in the first half of 2026 on $11.2 billion of revenue.5 That is substantial, but it is a small piece of a conglomerate whose wholly owned businesses are on track for nearly $50 billion in operating earnings this year.17 One skeptical analysis estimated that U.S. electric utilities make up only about 7% of Berkshire's total assets.11 One Motley Fool writer called energy a division worth watching but not a game changer.17

The risks Abel himself flagged

Abel has been unusually open about the obstacles. On CNBC he said communities across the country are pushing back much harder against data centers.19 He named permitting and site preparation, not power supply or capital, as the binding constraint.5 The backlash is significant. New York has imposed a one-year moratorium on large new data centers, at least 11 other states have similar efforts underway, and bills near major data-center hubs have reportedly risen as much as 267% over five years.19 In September the House passed the bipartisan Ratepayer Protection Act, which would make data-center operators pay for the power and grid upgrades they need instead of passing those costs to households.9

That legislation fits Abel's own policy. He has said hyperscalers must pay their full infrastructure costs, and he points to MidAmerican's rates, which are about 45% below the national average, as evidence the approach works.3 Critics say those low rates owe a lot to an old coal fleet. MidAmerican plans to keep that fleet running until 2049, which makes it a target for environmental groups and complicates BHE's relationships with regulators.11 Wildfire liability at PacifiCorp is a separate risk. An Oregon appeals court overturned the most damaging verdict in April, but the issue remains unsettled.311

Why it matters

This is the clearest signal so far of how Berkshire will operate under Abel. It will invest heavily in technology, as the Alphabet purchases show. But its preferred AI exposure is through regulated infrastructure that earns money no matter which model or chipmaker wins.8 In that strategy, the gas business may be the most important piece. Pipelines carrying 15% of the country's gas, together with a turbine-parts maker at a supply chokepoint, give Berkshire exposure to the fuel behind most new data-center power.37 Because these businesses earn on volume rather than price, they do not need a gas price spike to pay off.

The weakness in the strategy is political rather than economic. If public resistance to data centers keeps growing, the binding constraint will be permits and public consent, not electricity supply. Abel's requirement that tech companies pay their own way is both a defensive measure and a cap on how fast Berkshire can grow its data-center business. So far, that trade-off looks consistent with Berkshire's long-standing caution.