The Gas Story Behind SpaceX's Historic IPO

While everyone else watches the ticker, here is what the gas industry should be paying attention to.

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History’s biggest IPO, the SpaceX trading debut marked the arrival of the first publicly traded Artificial Intelligence 'Major', and the chariot of one of the world’s ten largest companies is a liquid methane-fuelled rocket. The gas industry should be paying attention for two reasons: first, it is a tangible commercial signal, and second, this is a reputational signal and an opportunity for gas to define the energy conversation on its own terms. I unpack both below.

#icymi

• IPO quick facts recap: SpaceX started trading Friday, June 12 at $135 initial price and closed at $161 (+19%), which put its market capitalisation above $2 trillion, with the target $75 billion raised.

Elon Musk's Space Exploration Technologies beat expectations and its galactic valuation crossed $2tn, backing an interstellar business plan that combines orbital data centres powered by space solar energy, reusable rockets, proprietary GPUs, Starlink connectivity, and solving the AI’s energy problem. It is a huge bet on largely unattempted and unproven technology to be delivered by our time’s leading industrialist who wants to extend human industry into space, and the investors eagerly rolled the dice.

The venture also needs a lot of gas – and not just for the data centres. Gas is its rocket fuel: the Starship’s rocket Raptor engines uniquely burn cryogenic liquid methane, or LNG at 'rocket-grade' 99% purity. Although the S-1 prospectus treats liquid methane purely as a propellant specification, it is the same molecule and production technology. SpaceX plans to build liquefaction facilities at rocket launch sites, to support the company’s target of scaling to thousands of rocket flights.

Back in the terrestrial and the immediate, SpaceX is building its own gas power plant to run the Colossus data centres and disclosed a spend approaching $3bn on mobile gas turbines. The technology choice has attracted significant scrutiny, including an active lawsuit by the National Association for the Advancement of Colored People (NAACP), which alleges the turbines were installed and operated without the air permits required under the Clean Air Act, exposing nearby communities to excessive nitrogen oxide (NOx) emissions. This choice of small mobile units could be explained by short-term need and the desire to avoid a long commitment to owning and operating a gas plant. Another possibility is that it was no choice at all. Given the severe global turbine shortage, building a stationary gas plant, which would be more efficient and lower emitting, would stretch the timeline by 5-7 years and likely stretch the budget too. According to recent reports, order backlogs and supply chain pressures have driven up equipment costs (see here.) The tech market’s competitive landscape doesn’t tolerate these types of delays.

What does this mean for gas reputation and big picture narrative?

The SpaceX case is a gleaming illustration of the new gas demand frontier that opened over the last five years and was very much a black swan when it arrived. The generative AI revolution and its data centres rapidly reversed electricity demand in the global North from a flatline into growth just at a time when the oil and gas business was in an existential fight. At the time, the mainstream public debate about early decommissioning and stranded assets was tightening the final screw on the “fading industry” plaque for the sector, causing some big pivots to renewables and net zero first narratives.

The Big Tech demand explosion and the market’s pressing need for reliable, dispatchable, lowest-available-emissions - and - not or - firm power, which could be deployed rapidly, effectively cancelled the existential debate. But it didn’t fully remove the reputation plaque.

Despite the reversed commercial reality, the old label stuck because it hasn’t been replaced, and the broader external narrative hasn’t changed much. Gas hasn’t quite reclaimed its value recognition and has arguably gained position by becoming seen as the fuel of 'no other choice.' Being the least bad option is the default position that lacks a future. This is visible today when gas becomes another reason to challenge, or, as with SpaceX, to launch lawsuits against data centre operators, rather than being viewed as a demonstrable value provider.

Even when the real-time story is that gas is fuelling the future of big tech, AI, and... rockets, that story is not coming through in public, and when it does, it often isn’t positive. The only way to change this is for the industry to start telling its story more openly. Just last week at an event, in two separate conversations and in different contexts, a senior European regulatory representative and a top global newspaper reporter both said to me the equivalent of: “I wish the industry spoke out for itself more” – one was referring to the oil and gas sector, and the other to the downstream industry value chain. I reassured them that we’re working on it. :)

This new tech-prompted frontier can be the oil and gas industry’s opportunity to reclaim and own its narrative, leading with value and clarifying the energy choice it offers to its customers and the broader economy – and to stop being seen as the least bad option or a non-choice.

Of course, if SpaceX's space solar power bet succeeds, it would rewrite the entire energy business in unforeseen ways and could become a headwind for gas demand in the future. That is currently unknowable, but even then, gas still fuels the rockets to get there.

The market has already made the case for gas; the opportunity now is to capitalise on it and define what its rocket-fuelling future looks like and share it with the world.

Get ahead of the narratives shaping the energy business, so you can write your own. Statem helps oil, gas, and energy value chain companies close the gap between their operational reality and how they are perceived externally. Book a discovery call to find out how.

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