Reprinted from Real Clear Energy, July 23, 2025

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We’re standing at the edge of an energy transformation that will reshape America faster than anything we’ve seen in half a century. Here’s what should keep every policymaker awake at night: artificial intelligence data centers are already consuming 3.7% of our nation’s power, and that number is set to triple by 2030. Meanwhile, our electric grid is showing cracks that can’t be papered over with wishful thinking. This isn’t about choosing sides in some tired energy debate. This is about Energy Realism—grounding our future in what actually works for American families, farmers, and small businesses who need affordable, reliable power to thrive.

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Let’s start with some hard numbers that tell the real story. In PJM—the grid operator serving 65 million Americans from Chicago to the Mid-Atlantic—capacity market prices just jumped nearly 10 times higher for 2025-26, adding $12.5 billion in costs that will flow straight to consumers. In MISO, covering much of the Midwest, summer capacity auction prices spiked 20 times over the previous year’s price. Why? Because as FERC Commissioner Mark Christie put it bluntly: reliability issues aren’t from adding renewables to the grid—they’re from the premature retirement of dispatchable resources. Translation: we’re shutting down power plants that work 24/7 and replacing them with sources that work when the weather cooperates.

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PJM’s own market monitor drives this point home: renewables can replace energy output, but they can’t replace capacity—the resources we can count on when we need them most. Yet annual outages have nearly doubled from 166 per year in 2014-2018 to 321 per year in 2019-2023, precisely as intermittent sources have flooded the system. The irony is rich: states like New York, California, and those in New England—the ones pushing hardest for clean energy—are the most dependent on natural gas and oil-fired peaker plants when the weather won’t cooperate – as it has since time immemorial. A January 2025 report from the Northeast Power Coordinating Council confirmed these regions “fully utilize” natural gas infrastructure during extreme cold weather periods.

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This isn’t just about keeping the lights on—it’s about keeping America affordable. When diesel prices jumped 52% from 2021 to 2022, egg prices soared 71% and beef prices climbed 11% it’s not coincidence; it’s economics. The scale is systemic and staggering: Our own CEA research shows that every half-cent increase in electricity prices adds $25 million to manufacturing and steel production costs nationwide. Every half-cent. Small businesses feel this squeeze most acutely. A recent Ernst & Young study of businesses in the UK – which are farther down the road of eliminating reliable baseload power, 64% report that rising and unstable energy costs are hammering their profitability and competitiveness. Another 66% worry about accessing the reliable energy they need to grow. That is not fortune-telling – it’s real evidence of what happens when energy policies don’t focus on affordable and reliable outcomes.

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Now here’s where it gets really interesting—and really urgent. AI’s hunger for power is just beginning. McKinsey predicts data center demand will grow from today’s 3.7% to 11-12% of total US power consumption by 2030. That’s like adding the entire electricity demand of Japan to our grid in six years.

To put that in perspective: equivalent to 55 modern wind turbines or 53,000 households. By 2028, a single AI training facility could demand 1 gigawatt. By 2030, that could reach 8 gigawatts—equivalent to eight nuclear reactors. Where’s that power going to come from? Today, about 40% of data center electricity comes from natural gas, with renewables providing 24%.

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The tragedy is we know how to build the infrastructure America needs. What we don’t know how to do anymore is get out of our own way. Consider the casualties: The Keystone XL pipeline cancellation cost us 830,000 barrels of oil per day—enough to power 260,000 households. The Access Northeast pipeline, killed by regulatory delays and protests, would have saved New England residents $1 billion in electricity costs while powering 3.75 to 5 million homes. The Atlantic Coast Pipeline cancellation eliminated 1.5 billion cubic feet per day of capacity—enough natural gas for 7.6 million homes. The Jordan Cove Pipeline, the Northeast Supply Enhancement project, the Sandpiper Pipeline—all casualties of a permitting process that’s become a weapon against American energy security. For short-haul pipelines, costs now surge more than eight times original estimates, ballooning from $6 million to over $50 million for less than six miles of expansion, according to proprietary CEA data. The Mountain Valley Pipeline took over 10 years to build despite regulatory approvals, facing endless legal challenges that added billions in costs.

Energy Realism means getting practical about what works. State leaders and legislators hold the key to unlocking America’s energy potential. First, modernize grid planning to reflect the best resources to affordably and reliably meet demand growth—whether that’s wind, gas pipelines, or electric transmission. Stop picking winners and losers based on the political fashion of the day. 

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Second, push permitting reform. Texas and West Virginia are leading the way by streamlining approval processes. Other states should follow by limiting facility siting boards to public service commissioners -- we don’t need multiple agencies ruling on siting. Cut bureaucratic overlap and writing laws that prevent legal tactics that serve no purpose except to delay construction. This points to stakeholder input into regulatory processes and what scope of input should be allowed. Intervenors should not be allowed to intervene solely to stop projects – stakeholders can and should be heard, but we cannot allow a tyranny of the minority with something so essential as energy.

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Third, defend consumers’ right to choose the energy they need and want. With Maine’s recent signing of LD 556, now more than 26 states have passed laws that prohibit municipalities from outlawing specific forms of energy. On the other side of the coin, 12 states currently prohibit new nuclear construction—including California, New York, and Massachusetts—at precisely the moment we need every reliable option on the table.
That’s not environmental leadership; that’s energy malpractice.

Fourth, invest in workforce development. The energy transformation requires skilled workers in everything from pipeline welding to grid technology. States that train these workers today will attract the energy investments tomorrow. Fifth, fast-track priority projects. Get the important work done by making it possible, and moving barriers out of the way. Finally, provide policy certainty. Capital follows clarity. Energy projects take decades to plan, build, and operate. Investors need to know the rules won’t change with every election cycle.

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We can’t power a 21st-century economy with 20th-century politics. The AI revolution, and growing economy aren’t going to wait for us to figure out whether we prefer gas or renewables. They demand we embrace everything that works for a specific place. This recognition is finally dawning on leaders of states that have followed the mantra of eliminating oil and gas in favor of renewable resources. The electoral price of high energy prices is an immutable force.

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With its arrival, we have seen Connecticut’s Democratic Governor Ned Lamont publicly embrace an all-of-the-above energy strategy as a way to reduce some of the nation’s highest retail electricity prices. New York – long an opponent of pipelines – has granted the Iroquois pipeline the air permits needed for expansion. These are welcome moves and a product of being realistic about what energy means to people – and the political and financial cost of getting it wrong.

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Energy Realism isn’t about choosing gas over renewables—it’s about choosing progress over paralysis. It’s about recognizing that families paying higher electric bills don’t care whether their power comes from wind, gas, or nuclear—they care that it’s there when they flip the switch and that they can afford it.

The next decade will determine whether America leads the global energy transformation or gets left behind by countries that understand this basic truth: energy abundance is the foundation of everything else we want to achieve.

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The choice is ours. The time is now. Choose wisely, and we all prosper.