Elon Musk Is Betting Big on Natural Gas. Here's What It Means for Energy Stocks.
Natural gas remains vital for both current and future energy needs, and SpaceX investments are helping support demand.
Overview
Despite his role in revolutionizing the electric vehicle industry with Tesla, Elon Musk's second-most famous company, Space Exploration Technologies (NASDAQ: SPCX) or SpaceX, is set to rely on a fossil fuel, natural gas, to power its xAI's data centers and enable it to make launch fuel for its Starship rockets. These developments underline the role of natural gas not only in the old economy but also as an integral part of the new economy. Here's what it means for natural gas stocks and how to invest in them.
Colossus and Colossus II, xAI's main data centers, rely primarily on natural gas for power. Moreover, in SpaceX's initial public offering (IPO) filings, management states that "Going forward, COLOSSUS II is expected to be primarily powered by a dedicated natural gas power plant."
Details
Moreover, SpaceX has also stated that "our ability to scale our infrastructure depends in part on our continued access to natural gas supply at economically feasible prices." In addition, launching rockets such as Starship requires launch fuel made from natural gas; to ensure a steady supply, SpaceX plans to build a natural gas pipeline. This is a key requirement if Starship is to be launched on a repeated basis as planned.
Source
Originally published at www.fool.com.