Nuclear energy stocks have been all the rage in 2024 as investors look to profit from companies powering the AI revolution. However, the market is running out of reasonable places to look in this space. Hyperscaler companies are quickly eating up the excess nuclear energy capacity that U.S. companies have to offer. Firms like Constellation Energy (NASDAQ: CEG) are even recommissioning mothballed sites to meet the demand.

New, full-size nuclear plants cost tens of billions of dollars to build. Additionally, it can take a decade or more before builders complete them and bring them online. Due to this, other solutions are emerging. Small modular reactor (SMR) stocks have been among the hottest in the market. These companies look to build smaller reactors that can come online faster and at a lower cost. However, the economic viability of these reactors is still a massive question. Furthermore, precisely zero SMRs are currently operational in the United States.

With hyperscalers wanting to minimize the carbon emissions of their data centers, energy companies are coming up with a workaround approach. Their idea is to combine natural gas and carbon sequestration technology to render their power solutions low-carbon or carbon-neutral. Hydrogen will also play a role. Below, I’ll detail three firms taking steps to bring this plan to fruition.

Exxon Mobil: Oil and Gas Behemoth Also Dominates Carbon Capture

In a special call on Dec. 11, the United States' largest oil and gas company, Exxon Mobil (NYSE: XOM), announced its ambitions to power data centers. To do this, the company plans to use "low-carbon intensity natural gas." It will utilize its carbon sequestration technology to capture and store over 90% of the carbon dioxide generated from powering the data center.

Exxon Mobil is a company that is particularly well-positioned to execute this type of promise. It already owns the world’s largest carbon capture and storage network. It has pipeline and storage infrastructure along the Gulf Coast and has contracts for 6.7 million tons of carbon sequestration annually. This gives the company strong expertise in the domain.

A key advantage of Exxon’s plan is that the power will be "islanded." This means it is not connected to the public electric grid. This allows Exxon and its potential customers full control and means they don’t have to worry about broader grid outages. It also means they should face significantly less regulation, allowing construction and upgrades to take place much faster.

GE Vernova: Striking Deals While the Iron Is Hot

The next player throwing its hat into this ring is GE Vernova (NYSE: GEV). The company is not a utility or power producer; instead, it makes the equipment these companies install in their plants. GE Vernova is well known for its expertise in natural gas. The company’s natural gas turbines are one of the largest, if not the largest, single contributors to its overall revenues. The company has reportedly signed multiple contracts to sell natural gas turbines that will power data centers.

Carbon capture technology currently isn’t a large part of GE Vernova’s business, but it plans to make it so. It intends to put half of its research and development spending next year into long-term opportunities like SMRs and carbon capture. The company’s CEO describes the immediate future of these natural gas plants as “unabated gas” late into the decade. Essentially, these data centers may not incorporate carbon capture for around five years. GE Vernova plans to help these firms integrate carbon capture after that time to help them meet sustainability goals.

Entergy: Hard Proof Natural Gas Isn’t Going Away Anytime Soon

The most concrete example of the natural gas-powered data center future comes from Entergy (NYSE: ETR). The company signed a $10 billion deal with Meta Platforms (NASDAQ: META) to build the hyperscaler’s largest data center. They will locate three natural gas plants in Louisiana, which will supply the data center with nearly 2.3 gigawatts of electricity. An interesting caveat is that hydrogen, which is completely carbon-free, could contribute up to 30% of the fuel source immediately. The plants will have the ability to transition to 100% hydrogen fuel over time.

At this point, the two firms will not connect the data center to carbon capture technology. They will incorporate it over time. However, Meta will help fund carbon capture at the Lake Charles gas plant and help build 1.5 GW of additional solar energy generation. This aims to lower Meta’s overall carbon footprint. The facility hopes to be operational by 2028 or 2029.