The continued relevance of oil and gas provides an opportunity for the industry to scale new nuclear energy power sources.
Nuclear energy is currently enjoying another renaissance, thanks in large part to the growing energy needs of the data center industry and the related adoption of artificial intelligence. The Lawrence Berkeley National Laboratory (LBNL) estimated that US data centers consumed approximately 176 TWh of electricity in 2023, representing about 4.4 percent of the nation’s total electricity use. The same report suggests that this figure could rise to 12 percent (580 TWh) by 2028, increasing the strain on the nation’s energy infrastructure and consumer costs.
While these factors have driven renewed interest in nuclear energy as a solution to the growing power problem, several other industries are also taking a serious look at whether nuclear energy can be used to support their operations, including the oil and gas industry.
A Brief History
Despite the irony involved in combining the capabilities of the nuclear energy and traditional energy sectors, the oil and gas industry has a rich history with the nuclear industry that dates to the Manhattan Project. The sector’s deep understanding of complex chemistry and its ability to quickly scale manufacturing, handling, and procurement processes were instrumental in the project’s success. This success translated to other commercial and governmental opportunities that continue in various forms today.
The Standard Oil Company of New Jersey’s support of the Manhattan Project was varied and included research on uranium metal production and centrifuge-based isotope separation and the production of boron-10. Jersey Standard entered the commercial fuel business with the formation of the Jersey Nuclear Company in 1969, which eventually became the Exxon Nuclear Company (ENC), following the parent company’s renaming in 1972. Through a series of acquisitions and joint ventures and other restructuring programs, the lineage ultimately integrated into today’s Framatome fuel enterprise.
The closely related petrochemical industry’s involvement with the nuclear energy industry also dates to World War II. DuPont was selected by General Leslie Groves as part of the Manhattan Project to design, construct, and operate Hanford Engineer Works for the purposes of plutonium production. This experience was carried over to the construction and operation of the Savannah River Plant for the production of tritium and plutonium until these responsibilities were transferred to Westinghouse in 1989.
Beyond weapons production, the Phillips Petroleum Company was instrumental in the design and operation of some of the country’s first test reactors at the Idaho National Laboratory complex, including the Advanced Test Reactor, which continues to function as a critical irradiation test bed for nuclear fuels and materials. Considering this experience, it is no surprise that today’s oil and gas industry is actively evaluating how best to integrate nuclear energy into its operations.
Perhaps one of the clearest signals that the oil and gas industry is leaning into the momentum surrounding new nuclear energy technologies is the September 2025 announcement regarding the formation of the Industrial Advanced Nuclear Consortium. Founding members of the consortium include ExxonMobil, ConocoPhillips, Chevron, and Shell.
The consortium’s three primary objectives focus on standardizing equipment interfaces and sourcing terminology, adopting risk-appropriate design practices, and developing open frameworks and business guidelines. Inherent to these objectives is the need to identify the most likely use cases for nuclear energy in the oil and gas industry (and other heavy industries) and determine how best to integrate reactor technologies with new and existing industrial infrastructure for both heat and power applications.
Applications
Assessing the petroleum value chain segments —upstream, midstream, and downstream —provides insight into how nuclear energy could be used to improve resilience, emissions, and potentially the economics of oil and gas operations.
In the upstream part, power availability for exploration and production activities is a growing concern for the industry as it seeks ways to electrify its relatively remote operations with higher reliability and less carbon intensity. An S&P Global report commissioned by six oil and gas companies in 2022 quantified the industry’s power needs in the Permian Basin, noting that regional power demands from oil and gas operations are projected to increase by 57 percent over the next decade. Most of this demand is driven by the increased electrification of oilfield operations (e.g., artificial lift, gas gathering), with significant portions likely to go unserved by grid connections. Companies like Chevron and others are investigating the potential for microreactors to provide relief for these looming remote power challenges, considering their relatively small footprint, modularity, and potential transportability.
The midstream stage is generally characterized by the pipelines that deliver petroleum products from source to refinement and from refinement to consumer, including approximately three million miles of natural gas pipelines that span the country. In the case of natural gas transportation (excluding natural gas liquids, crude oil, and refined products), the US Energy Information Administration (EIA) estimates that approximately three percent to four percent of domestic natural gas consumption is used to power compressors required to move the gas to its destination. Whether this can be electrified or shaft-powered by nuclear technologies is a largely unexplored and attractive decarbonization target.
In the downstream segment, most often visualized as refineries or chemical plants, the use of nuclear energy facilities to provide process heat for these applications has been studied for decades, and for good reason. Petrochemical refineries, in particular, use tremendous amounts of energy to operate crude distillation units, fluid catalytic crackers, coker units, and other equipment necessary to produce the various petroleum-based products we use in our daily lives.
Results from the most recent US EIA Manufacturing Energy Consumption Survey indicated that petroleum refineries consumed an estimated 3,314 trillion BTUs (971.4 TWh) of energy in 2022, 40 percent higher than LBNL’s estimated upper bound of data center energy consumption in 2028.
While integrating new nuclear energy facilities with sprawling industrial facilities like refineries will require a tremendous amount of engineering and techno-economic analysis, the fact remains that downstream energy needs alone could likely support the buildout of several gigawatt-scale nuclear energy facilities.
Produced Water Handling
Spanning the value chain segments, and largely a product of the US shale revolution and oil and gas production reaching global super-producer territory, produced water handling has slowly emerged as a potential use case for nuclear energy in the oil patch. For every barrel of oil produced in the United States, approximately 10 barrels of water are also produced during operations. Data from B3 Insight indicate that 20 million barrels of water were produced in the Permian Basin every day in 2024. By 2030, industry experts expect this figure to rise by 30 percent to 26 million barrels per day. Typically regarded as a waste product for disposal into depleted reservoirs, interests in critical mineral extraction and desalination for beneficial reuse are interesting prospects whose economics prefer low-cost, carbon-free power.
Operators have historically managed the issue of produced water through reinjection into saltwater disposal wells. However, concerns regarding seismicity and the over-pressurization of disposal zones due to reinjection are prompting major efforts to identify alternative disposal approaches for produced water. Desalination technologies like vapor recompression or thermal distillation, which could enable beneficial reuse or otherwise reduce the amount of reinjection, are expected to be energy intensive, considering the complex chemistry and salinity of produced water.
Nuclear energy may be well-suited to provide process heat and electric power to support produced water cleanup operations and, potentially, mineral extraction activities. Companies like Natura Resources, a molten salt reactor technology developer, have signaled their interest in applying their technologies to addressing the challenges associated with produced water disposition.
Strategic Opportunities
The oil and gas industry’s growing interest in nuclear energy presents a paradox worthy of closer examination, given its abundant access to conventional energy resources to power its operations. The limited data available on new nuclear technology costs and timelines and the nuclear energy industry’s recent history of schedule delays and cost overruns convey uncertainty on whether integrating oil and gas operations with nuclear energy will ultimately yield economic benefits. However, there is no question regarding the strategic value of integrating nuclear energy into oil and gas operations.
Oil and gas companies compete in global markets where carbon intensity remains a key customer metric outside the United States. Using nuclear energy to power its operations can unlock global capital that favors projects that utilize reliable, long-duration, carbon-free energy. Engaging in nuclear energy projects through ownership, operations, or other partnerships also hedges the sector’s exposure to natural gas price spikes and future policy swings at home and abroad.
In downstream operations, refineries depend on high reliability and high-quality heat and power to sustain throughput and protect critical equipment. The US fleet of large light-water reactors operates with average capacity factors above 90 percent, making these (and similar technologies) an attractive option for refinery operators who are seeking firm steam and power with stable pricing over multi-decade horizons.
At the same time, the nuclear energy industry stands to gain just as much strategic benefit from cross-sector engagement. Companies like ExxonMobil have deployed tens of billions of dollars in capital per year and have deep expertise in executing technically complex projects. Embedded in this expertise are core competencies that the nuclear industry will need to learn (or relearn) to ensure that the next generation of nuclear energy facilities are deployed with discipline.
Notably, the ability to standardize capital-intensive technologies will be essential in driving down cost curves to a point where nuclear energy becomes cost-competitive with other forms of energy. The oil and gas industry has been ruthless in its efforts to push standardization across major projects, adopting a “design one, build many” strategy for liquified natural gas plants, drill ships, offshore platforms, and all manner of capital-intensive heavy equipment. Considering the number of technologies and companies currently vying to commercialize their nuclear technologies, this need is particularly acute.
Developing effective working relationships with key suppliers and engineering, procurement, and construction firms can also take decades. The nuclear industry stands to benefit from these relationships through oil- and gas-centric projects, especially when considering the contrast in the number of projects that have been successfully implemented over the past 40 years. Overlaps in the types of components used by both industries, harsh operating environments, and rigorous quality management standards also suggest that there are ample opportunities for collaboration to lower costs, improve execution, and extract the benefits from heavy industry partnerships.
Policy Considerations
The oil and gas industry’s experience in executing major projects has also made it well-versed in managing regulatory and policy matters crucial to conducting business around the globe. From state and county well pad permits to environmental impact assessments that support offshore exploration and production operations in foreign countries, the oil and gas industry is no stranger to navigating complex bureaucracies. It should come as no surprise, then, that the industry has embraced the oft-discussed challenges associated with nuclear regulation.
In a February 2024 letter to the US Nuclear Regulatory Commission, Shepherd Power LLC —a wholly owned subsidiary of oil and gas equipment manufacturer NOV —pressed the agency for licensing timelines that more closely aligned with capital spending cycles in the oil and gas industry. Shepherd Power noted that licensing timelines should be no more than 180 days from the time a precise microreactor deployment site is identified to the operation of the reactor (assuming a project developer elects to use a reactor design previously approved by the NRC). While markedly shorter than the agency’s historical licensing timelines, this high-volume licensing concept would provide sufficient confidence to operations teams that nuclear energy solutions could be deployed with the same predictability as other deployable energy sources currently used in the field.
The Nuclear Energy Institute (NEI) followed up with a report in July 2024 outlining 31 topics that needed to be addressed by the NRC to support these timelines. Continuing the theme, President Trump’s May 2025 executive order related to reforming the NRC directed the agency to establish a process for the high-volume licensing of microreactors that would enable the benefits described in Shepherd Power’s February 2024 letter to the NRC. In a series of July 2025 workshops, the NRC outlined its plans to codify this licensing approach by the end of 2026. While more work remains, momentum in this area suggests that when industrial end-users are ready to deploy these technologies, the regulatory framework should not be the long pole in the tent.
Going Forward
Executing on the promises of new nuclear energy will require the mobilization of entrepreneurship, capital, skilled labor, heavy machinery, and industrial supply chains on a scale with which the oil and gas industry is familiar. While nuclear energy is enjoying a well-deserved resurgence largely due to our collective efforts to electrify and integrate artificial intelligence into our daily lives, the global economy continues to rely heavily on oil, gas, and a wide variety of petrochemical products to move people and goods and manufacture the essential materials of modern life. This continued demand for hydrocarbons —and the strategic value of nuclear energy for the oil and gas industry —may provide a new opportunity for the traditional energy sector to support a buildout of the next generation of nuclear reactors.
About the Authors: Bill Jessup and Nick Morriss
Bill Jessup is the Director of Nuclear Technology at Shepherd Power. Before that, he worked for the United States Regulatory Commission as chief of the Advanced Reactor Licensing Branch, Duke Energy as a nuclear power plant operator, and MPR Associates as an engineering services consultant. He holds a B.S. in mechanical engineering from North Carolina State University and an M.S. in Mechanical Engineering from George Washington University.
Nick Morriss is the Director of Business Development at Shepherd Power. Before that, he served as the commercialization director of renewables and rig technologies at National Oilwell Varco. He holds a B.S. in Mechanical Engineering Technology from Texas Tech and a M.S. in Technology Communication from the University of Texas at Austin.
Image: Shutterstock/Rangsarit Chaiyakun
