America’s energy needs are on the rise. The enormous data centers required to power artificial intelligence require a tremendous amount of electricity. At the same time, the energy needs of supply chains, transportation operations, and peoples’ homes are also soaring. That’s left a lot of people wondering what our energy future looks like and whether we have the capabilities to affordably generate the energy our modern world needs.
Energy expert Bill Duffy has some insights. He is a partner and one of the oil and gas sector leads for the international management and consulting firm Kearney’s Energy & Process Industries (EPI) practice.
Duffy began his career as a design engineer with equipment manufacturer Illinois Tool Works (ITW), where he was a three-time inductee into ITW’s Patent Society for innovative automotive fastener and connector system designs. He later transitioned into management consulting for major energy and chemical companies around the world.
In 2021, Duffy joined Kearney, where he now leads supply chain and procurement transformation programs with major oil and gas companies in the U.S. and Canada. He holds an MBA from Loyola University Chicago and a B.S. in mechanical engineering from Marquette University in Wisconsin.
Q: Kearney recently co-authored a report with the Energy Institute about the global energy market—including production, consumption, and emissions—in 2024. Would you share some of the key takeaways from the report?
A: Sure. The report is pretty dense, but I think there are three key takeaways that people should be looking at. Globally, energy consumption is increasing. I think people see that as a bad thing because we’re burning more energy, but the good thing is that supply is meeting that demand. And it doesn’t show any signs of slowing down.
Let’s talk a moment about the supply side. First, the supply of fossil fuels is still growing, but at a much slower pace than we’ve seen during the last 50 years. At the same time, wind and solar are really starting to pick up. In fact, wind and solar capacity last year was about eight or nine times fossil fuel capacity. That is good. China has played a big role in this.
On the demand side, demand for electricity is skyrocketing. I don’t think anybody saw this coming 10 years ago when people first started talking about energy transition—you know, things like artificial intelligence (AI) and hyperscalers [large-scale cloud service providers] and the use of electric vehicles.
Q: How does that impact the desire to wean ourselves off our reliance on fossil fuels?
A: It has changed the notion of energy transition into one that is more of energy augmentation, as demand has been accelerating much faster than we ever expected.
So we’re not getting away from fossil fuels as fast as we would have liked, but what we’re actually seeing is that all these new alternative fuels and renewables are augmenting our supply of fossil fuels and will help meet that demand going forward. And I don’t expect that to change.
I think the growth rate of fossil is going to be relatively flat, maybe within 1% every year. Then we’ll see almost double-digit growth for everything else.
Q: How does the growing use of AI tools factor into this increase in energy consumption?
A: Let’s look at it this way: I heard someone say recently that a Chat GTP prompt takes 10 times as much energy as a classic Google search. Then think of all the devices that are probably within your reach right now that are AI-enabled—your phone, your computer, even the appliances in your kitchen. These are all drawing much more energy than their predecessors ever were, and we don’t see any signs of that diminishing. It’s probably growing exponentially.
Evidence of that is all around us. For example, I was in an airport lounge recently and it hit me that the demand isn’t for seats anymore—it’s for plugs. People are looking to plug in all their AI-enabled devices. Then a robot came through the lounge and cleared away all the plates and dishes—these are things we never saw before.
And the AI world we’re living in is just the tip of the iceberg. We see energy and electrical demand growing tremendously over the next several years, and it’s going to be driven by this AI revolution.
Q: Earlier this year, Spain, Portugal, and parts of France experienced a major power outage. More than 50 million people were without electricity for up to 10 hours. What’s the takeaway here for supply chain leaders who might be concerned about the effects of a similar power loss on their own operations?
A: I think the key takeaway here is that the problem isn’t supply—the global supply of energy is very, very healthy. The real problem is the constraints and bottlenecks that exist in areas like infrastructure and transmission capacity.
You mentioned the outage in Spain and Portugal, but there was also a significant outage in Houston last year that wasn’t just hours—it was days and weeks in what is essentially America’s energy capital. But you’ve also got a very fragile energy infrastructure there that’s prone to problems. This aging infrastructure relies on a lot of materials and replacement and repair parts. And it’s a matter of getting the right material to the right place at the right time.
So when there is an outage or a surge from a storm, you are placing enormous demand on an already aging and outdated infrastructure.
Q: What can we do to deal with these constraints?
A: Utilities and supply chains are going to have to up their game. It requires better planning tools, which get enabled by AI, and better materials management. You also need to factor in long leadtimes because a lot of these materials come from overseas.
We also have the trade environment with tariffs and issues with the price and availability of copper, which is very important for our electrical infrastructure. And a lot of the larger transmission transformers and generators come from places like Japan, China, and Korea, which are ground zero for the tariff war.
So it’s interesting to ask: How do utilities and electrical device companies actually rewire their supply chains? Are they reshoring some of this material? How do they make sure they’re storing it in the right place [so that it’s available] at the right time? How do utility companies ensure they’re putting the right parts and materials on the trucks they dispatch when they go do an outage repair? This is changing dramatically. The good part is that technology is enabling those decisions.
Q: We also know that many companies are prioritizing sustainability in their planning. How will the growing availability of renewable energy sources impact supply chains?
A: Supply chains are basically moving materials from point of origin to point of use. And we’re beginning to see the emergence and an acceleration of things like fleets of electric trucks or trucks that run on biofuels as well as the development of more fuel-efficient over-the-road vehicles. I got my first car in 1977, and the cars we’re driving today are so much more fuel-efficient than that one. There’s been a dramatic improvement.
But what we also see is that these vehicles are evolving and improving, with the biggest opportunities in areas such as battery storage and capacity. So the technology that exists there will change dramatically, and we’ll see a lot of focus on the batteries.
The other opportunity where technology will be emerging is in hydrogen fuel cells. At some point in time, we’re going to crack the code on hydrogen. When that happens, we can actually start deploying huge fleets of vehicles that run on what is the most abundant resource in the universe. Hydrogen makes up 75% of the mass of the universe. By comparison, helium is 23% and everything else is only 2%—so [hydrogen] is not going anywhere. How do we tap into that? In my mind, that’s the Apollo program of the 21st century. If we can do that, it changes everything. And I think it will happen in our lifetime.
