power deal

Chevron eyes $7B Texas power plant for Microsoft data center campus

Chevron is in talks with Microsoft and Engine No. 1 about a massive natural gas power plant in Texas. Photo via Getty Images

Software giant Microsoft is negotiating exclusively with Houston-based oil and gas titan Chevron and investment firm Engine No. 1 about the development of a $7 billion power plant in West Texas that would supply electricity for a Microsoft data center campus.

The proposed natural-gas-fired plant initially would generate 2,500 megawatts of electricity, Bloomberg reports. The plant would be built near Pecos, a Permian Basin city, in an area where Microsoft plans to build a 2,500-megawatt data center campus on a 7,000-acre site.

A deal with Microsoft would secure a long-term customer for the plant’s output and help finance its construction, Bloomberg says. The project, expected to be producing power by 2030, still requires tax and environmental approvals as well an agreement to terms among Chevron, Engine No. 1, and Microsoft.

In a statement issued after Bloomberg reported the news, Chevron acknowledged it was in exclusive talks with Engine No. 1 and Microsoft, but the oil and gas company offered no details.

Chevron says the proposed plant “reflects an emerging shift in how power for AI is being developed, bringing energy supply closer to demand through co-located, behind-the-meter generation to deliver reliability while helping avoid added strain on regional electricity systems. It pairs sustained, always-on demand from advanced computing with proven capability to design, build, and operate large-scale energy infrastructure.”

Development of gas-powered electrical plants for AI data centers represents a new—and potentially lucrative— business line for Chevron. In 2025, Chevron, Engine No. 1 and GE Vernova announced a partnership to produce natural gas for AI data centers in the U.S.

Chevron’s collaboration with Engine No. 1 has already secured an order for seven large natural gas turbines from GE Vernova, according to Bloomberg.

“Energy is the key to America’s AI dominance,” Chris James, founder and chief investment officer of Engine No. 1, said last year. “By using abundant domestic natural gas to generate electricity directly connected to data centers, we can secure AI leadership, drive productivity gains across our economy, and restore America’s standing as an industrial superpower.”

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A View From HETI

Simon M. King, a Rice University sophomore, served as the first author on a recent study of a new process for recycling lithium-ion batteries. Photo courtesy Rice

Rice University researchers have uncovered a more energy-efficient and faster way to recycle critical minerals from used lithium-ion batteries.

Traditional methods rely on high heat, long processing times and harsh chemicals to recover a small fraction of critical materials from batteries used in everything from smartphones to electric vehicles. However, the team from Rice's Department of Materials Science and Nanoengineering developed a process that uses a water-based solution containing amino chlorides to extract more metals in less time

The team published the findings in a recent edition of the scientific journal Small.

Simon King, a sophomore studying chemical and biomolecular engineering who completed this work as a summer research fellow at the Rice Advanced Materials Institute, served as first author of the study. He worked with corresponding authors Pulickel Ajayan, the Benjamin M. and Mary Greenwood Anderson Professor of Engineering, and Sohini Bhattacharyya, a research scientist in Ajayan’s lab.

By using a hydroxylammonium chloride (HACI) solution, the team achieved roughly 65 percent extraction of key battery metals in just one minute at room temperature, according to the study. The efficiencies grew to roughly 75 percent for several metals under longer processing times.

“We were surprised by just how fast the reaction occurs, especially without the involvement of high temperatures,” King said in a news release. “Within the first minute, we’re already seeing the majority of the metal extraction take place.”

By not requiring high temperatures or long reaction times, Rice predicts the process could have a major impact on cost and the environmental impact of lithium battery recycling. Additionally, the water-based HACI solution makes waste handling easier and lowers certain environmental risks.

In addition to extracting the materials, the team went on to demonstrate that the recovered metals could be recycled and reprocessed into new battery materials.

“A big advantage of this system is that it works under relatively mild conditions,” Ajayan added in the release. “That opens the door to more sustainable and scalable recycling technologies.”

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