Crude Awakening: The Strain on Construction as the Demand for Data Surpasses Oil

As published in Construction Law, October 2025

In the modern industrial era, oil and gas projects have traditionally set the benchmark in construction for scale, complexity, and capital intensity. The oil and gas industry has generated capital expenditure on a scale that far surpasses other construction sectors such as buildings, infrastructure, and utilities. That is until now, where for the first time, oil and gas dominance is being challenged and a new front runner in global construction is emerging, the surge in data centre development.

The acceleration in data centre construction is being fuelled by, amongst other things, the rapid adoption of artificial intelligence. For the first time, the need for data is driving capital expenditure to levels that are on track to surpass those of the oil and gas industry.

Investment at a Global Scale

Technology companies and investors are ready to deploy vast sums, Morgan Stanley predict $2.9 trillion in the next three or four years. Household names such as Meta (the parent company of Facebook, WhatsApp, and Instagram), Amazon, and Microsoft are all reporting an increase in the deployment of capital spend. For example, Meta is constructing the Prometheus project in Ohio, and has also recently broken ground on the development of Hyperion in Louisiana, CEO Mark Zuckerberg compares the cluster of data centres to the “footprint of Manhattan”. Whilst Amazon and Microsoft have each pledged more than $100 billion of investment over the next 12 months, allowing each business to take advantage of the rapid adoption of artificial intelligence. Spending in data infrastructure is set to accelerate growth at scale and pace not only in the US, but also in other global hubs such as London, Frankfurt, and Singapore.

This is a profound shift in investment priorities, one that we see across the globe, however with any shift it carries with it a set of challenges. To take advantage of this opportunity there needs to be a collective effort from all stakeholders, to be agile, ready to react and deliver on demand.

Stakeholders must consider whether the global supply chain has the ability to deliver exponential growth? Can the market supply the specialist skills required to design, build, commission, and operate these data centre facilities?

Some may say there is a familiar pattern emerging, that the unprecedented capital being deployed is testing the limits of the construction industry as it did during oil booms. With any opportunity delivered at scale and pace, we expect this to drive a rise in construction disputes.

Closing the Skills Gap to Secure Future Success

The skill shortage is one of the most fundamental challenges. Mechanical, electrical, and commissioning engineers, the disciplines at the heart of successful delivery, are already in short supply relative to the build rate. Out with the sector, we are already seeing a crisis with the lack of engineering and construction skills from the classroom to building site. The result is predictable: ambitious programmes, overspending, compromised quality, and operational issues beyond completion. The risk posed by a skills shortage is paramount, the industry must adopt a strategic approach to ensure we have the skills to deliver the commercial and social need for more data and increased connectivity.

Compounding the skills resource shortage is the pressure on our electrical infrastructure. In the UK, not just limiting to data centres, 750 gigawatts of projects are currently waiting for grid connection approval, a backlog that can result in delays but also reflects the scale of speculative projects competing for access. For context at the time of writing, the live electrical demand in the UK is 32 gigawatts, and so vast amounts of work needs to be progressed to get grid connections online.

To bridge this gap, some developers are exploring larger connections to the gas network, proposing gas turbines as a temporary measure while awaiting grid connection. This reflects a wider global trend, with gas turbines used to accelerate the delivery of data centres. In many cases, they are not intended as permanent solutions but as a stopgap, to be retained as backup once grid connections are secured.

Infrastructure and Cost Pressures

The strain on infrastructure is mirrored in other markets, where rising energy costs and connection bottlenecks are adding further uncertainty to both the feasibility and the economics of some planned facilities.

The consequences of this are already seen, with rising labour costs and the long wait for specialist equipment. Those same shortages slow procurement, delay installations, and leave a finite labour pool with more work than can be delivered.

Expertise and Early Engagement

In many of these cases, the root cause is the same: a gap between the commercial commitments made at contract stage and the realities encountered on site. That gap can be narrowed, or even closed, by involving the right expertise at the right time.

For example, a commissioning engineer who has brought multiple data centres online will spot risks in design that may have been overlooked. An operations manager with industry experience may flag performance criteria that are impractical to achieve. An experienced contractor who understands the sequencing of critical systems can build a programme that reflects the genuine constraints of the work.

Where those voices are absent early in the process, problems that may have been addressed in design become far more expensive to resolve during or indeed after construction. The most effective dispute avoidance strategies are those that integrate technical specialists into project teams from the outset. Engage the contractor, the commissioning engineer and the operations personnel early. Collectively establish clear measurable and achievable performance criteria, such as Service Level Agreements (SLA) and Liquidated and Ascertained Damages (LAD), these should be in place to guide a project to success, not just to guide when it fails. Ensure payment and incentive structures reflect the realities of delivery, which can be based on well thought out build sequence and detailed programme.

Turning Ambition into Achievable Outcomes

The pressure to move faster to outpace competitors has created an environment where clients expect complex, highly technical facilities to be delivered on time with no margin for error. In reality, a larger budget does not guarantee a faster pace of construction.

For the decision makers of the industry, this may require a shift in approach. Advising not only on the contract mechanisms, but also on realistic performance criteria, supported by a deeper understanding of the technical and operational constraints of each unique project.

Over the coming years, as the demand for data surpasses that of oil, success will depend on the foresight to align ambition with capability. Those who bring the right expertise to the table early will not only deliver resilient facilities but also avoid disputes, and ultimately avoid eroding value.

About the Author

Rab Eadie is a Chartered Engineer with over 20 years of global experience specialising in the design, installation, and commissioning of mechanical, electrical, and plumbing (MEP) systems. Since 2017, he has been appointed as a technical expert on more than 40 occasions and has provided expert services in international arbitration, litigation, adjudication, and mediation.