Permian Basin Energy

Overview

The Largest US Oil Basin Supplies a Fifth of US Gas

The Permian spans about 75,000 square miles. Midland and Odessa anchor the Texas side, with production across Midland, Ector, Martin, Howard, Andrews, Reeves, Pecos, Ward, Loving and neighboring counties. The US Energy Information Administration (EIA) forecasts Permian crude output of 6.8 million barrels per day in 2026, about half of US production. Marketed gas reached 25.4 billion cubic feet per day (Bcf/d) in 2024, up 12 percent from 2023 and 22 percent of the US total. Much of that gas comes up with oil, and pipeline limits keep prices low at the Waha hub in Pecos County.

Oilfield electrification and data centers drive the region's power demand. In September 2024 the Public Utility Commission of Texas (PUCT) approved the Permian Basin Reliability Plan, sized for regional demand of about 26 GW by 2038, and in 2025 chose 765-kV lines for its main import paths from the rest of the grid run by the Electric Reliability Council of Texas (ERCOT).

Data Center Power

Gas Plants Built for Data Centers

Pacifico Energy received a Texas Commission on Environmental Quality (TCEQ) air permit for 7.65 GW of gas generation at GW Ranch in Pecos County in January 2026, which it called the largest such permit in the US. The 8,000-acre campus adds 750 MW of solar and 1.8 GW of batteries, runs as a private grid and takes gas through a 15-mile line to the Waha hub. Amazon bought the site from Pacifico, confirmed in August 2026, and has filed permits for three data center buildings; see AWS GW Ranch.

Energy Forge One, Chevron's joint venture with Joulent, signed a 20-year agreement in June 2026 to supply a Microsoft data center near Pecos from about 2.67 GW of GE Vernova and Solar Turbines equipment; see Microsoft Pecos (Project Kilby). Vistra is adding 860 MW at its Permian Basin plant in Monahans and has a 20-year deal to feed Texas Critical Data Centers in Ector County from its Odessa plant. Diamondback Energy is marketing its surface acreage for gigawatt-scale power projects and said in August 2026 it would give details once it signs a long-term contract.

Gas Supply

New Pipe Moves Permian Gas to Data Center Power

Kinder Morgan announced Permian Link in October 2026: a $4.2 billion joint venture pipeline of about 434 miles and 2.8 Bcf/d from the Pecos County area to the Natural Gas Pipeline Company of America system, carrying gas north to power plants in the Texas Panhandle that serve an unnamed A-rated hyperscaler under a 20-year contract. Service is set for 2030. Energy Transfer, Targa Resources and Williams also run Permian gathering and takeaway lines that feed Gulf Coast export terminals; see Texas LNG Export Hub.

Constraints

Permit Pause, Water and Oil Prices Set the Pace

Governor Greg Abbott's September 21, 2026 order paused TCEQ air and water permits for data centers, including on-site power, until ERCOT's large-load review ends, expected in mid-December 2026. The order covers self-powered projects such as Project Kilby; Semafor reported in October that its final investment decision could slip from late 2026 into 2027, though Chevron still targets first power in 2028. GW Ranch received its air permit before the pause.

Data center cooling competes with hydraulic fracturing and produced-water handling for limited West Texas water; see Texas Water Supply Stress. Gas supply also tracks oil drilling: when oil prices fall and rigs drop, associated gas output falls with them.

Related coverage

Related Coverage

• Behind-the-Meter Power
• ERCOT Large Load Interconnection
• AWS GW Ranch
• Microsoft Pecos (Project Kilby)
• Texas LNG Export Hub
• Texas Trans-Pecos Nexus