Texas-based New Era Energy & Digital has announced ambitious plans to construct a massive, "hyperscale" data center complex in Lea County, New Mexico, a region already at the heart of the Permian Basin’s oil and gas industry. The proposed facility, designed to power advanced AI processing, is so immense that it necessitates the development of its own dedicated power generation infrastructure, including both nuclear and natural gas plants with a combined capacity of approximately 7 gigawatts. To put this into perspective, this generation capacity would rival the output of the West’s largest nuclear and natural gas facilities, such as Palo Verde and Gila River near Phoenix, combined, with an additional 800 megawatts. Such a power output could theoretically electrify over 5.3 million homes, though its primary purpose will be to fuel the ever-increasing demands of digital services, streaming, social media, and crucially, artificial intelligence computations.

While the sheer scale of this announcement might suggest significant public attention, it has received relatively little media coverage, a testament to the increasing frequency of such proposals. These ambitious data center projects, including New Era’s planned hub, are still in their nascent stages, with the actual generation and consumption of electricity a long way off. However, even if only a fraction of these proposals come to fruition, they are poised to fundamentally reshape the Western United States’ power grid, its landscapes, and its economies, mirroring the transformative impact of the post-World War II industrial boom that saw the proliferation of large coal and hydroelectric power plants across the region to support burgeoning urban centers.

This profound transformation is not a distant prospect but a present reality. A recent report from the nonprofit NEXT 10 and the University of California, Riverside, revealed that in 2023, data centers in California consumed 10.82 terawatt-hours of electricity, enough to power approximately one million U.S. households. This substantial energy draw resulted in an estimated 2.4 million tons of carbon emissions, even within California’s relatively clean energy landscape; on grids more reliant on fossil fuels, these emissions would be considerably higher. Furthermore, these centers consumed around 13.2 billion gallons of water for cooling and electricity generation. In Silicon Valley, a cluster of over 50 data centers accounted for approximately 60% of a single electricity provider’s total demand, leading the utility to increase customer rates to fund necessary upgrades to transmission infrastructure, substations, and new battery energy storage systems required by these facilities.

The expansion of data centers is not confined to the traditional hubs of Big Tech; these facilities are increasingly being established in cities and towns far removed from Silicon Valley. Phoenix, Arizona, has already seen the emergence of over 100 data centers, resembling large industrial buildings filled with rows of computer servers. Projections indicate that planned new facilities in the Phoenix area could escalate Arizona’s total power demand by as much as 300% above current levels, according to local utilities. In response to this surge, Arizona Public Service has announced its intention to continue operating the Four Corners Power Plant, a coal-fired facility, beyond its initially scheduled retirement in 2031, aiming to meet this escalating demand.

The Western power grid, a complex network of interconnected but distinct balancing authorities, is facing widespread increases in data center-driven demand. Nearly every one of these grid operators anticipates significant growth in power needs over the next decade as the "Big Digital Buildup" accelerates, and many are currently ill-equipped to meet this burgeoning requirement. The North American Electricity Reliability Corp. has issued warnings about the heightened risk of winter outages in parts of the West due to this growing demand from data centers. Consequently, many of the largest data centers are opting for self-generation of power, while utilities face the imperative to rapidly expand generating capacity and associated infrastructure to serve on-grid facilities. The financial burden of this new infrastructure will ultimately fall upon the utility ratepayers.

The question of how this immense power demand will be met is becoming increasingly pressing. Relying solely on solar and wind power is proving insufficient to cover the projected needs. As a result, utilities are already re-evaluating plans to extend the operational life of existing coal plants beyond their scheduled retirement dates and are investing in the construction of new natural gas plants and even nuclear reactors. Major technology companies like Google, Switch, Amazon, OpenAI, and Meta are exploring the possibility of powering their proposed facilities with the next generation of small, modular, and advanced nuclear reactors, contingent on their eventual development and deployment.

The environmental implications of these data center developments are multifaceted and vary significantly depending on the energy source. The burning of fossil fuels contributes to climate change and air pollution, while oil and gas extraction and coal mining can devastate landscapes. Large-scale solar and wind farms, while cleaner, can impact wildlife habitats and necessitate extensive new transmission lines. Nuclear power presents its own set of challenges, including safety concerns and the unresolved issue of radioactive waste disposal, alongside the environmental risks associated with uranium mining. Even data centers powered entirely by solar and batteries consume resources that, in their absence, could be used to displace fossil fuels from the grid. Furthermore, unless equipped with advanced closed-loop air-cooling systems, these facilities continue to consume substantial amounts of water for cooling, often drawing from municipal drinking water supplies.

Prometheus Hyperscale, a Wyoming-based company, has garnered attention for its ambitious vision of developing "sustainable" data centers. Their proposals include dedicated clean energy generation, sophisticated water recycling systems, and efficient cooling methods designed to leverage the colder climate of the Northern Rockies. The company has even suggested harnessing waste heat from servers to support local agricultural operations, such as warming greenhouses and shrimp farms, with the potential for future supplementation by nuclear micro-reactors. However, early operational plans indicate a reliance on natural gas for initial power, with carbon emissions offset through an agreement with another company to capture and sequester carbon dioxide from biofuel plants in Nebraska, a strategy that highlights the complexities of achieving genuine sustainability in this sector.

Community resistance to the rapid proliferation of data centers and their significant energy and water demands is growing, though the localized nature of these projects can make effective opposition challenging. In Tucson, Arizona, residents successfully opposed a city plan to annex a proposed data center, which would have allowed it to utilize treated wastewater for cooling. The developers subsequently relocated the project to county jurisdiction and opted for an air-cooling system, which reduces water consumption but increases energy requirements. Despite continued opposition, the firm eventually committed to investing in renewable energy sources sufficient to offset its entire electricity usage on the Tucson Electric Power grid.

Compounding the challenges for those opposing data center development is the fact that many local governments and utilities actively welcome these projects. Data centers can represent a significant source of jobs and tax revenue for economically distressed areas, provided tax exemptions are not granted. Concurrently, utilities are eager to expand their customer base and increase revenue to fund the necessary infrastructure expansions. Jeff Brigger, an executive at NV Energy, expressed enthusiasm for serving the projected data center load in Nevada, underscoring the utility sector’s keen interest in this burgeoning market.

While much of the opposition to data centers is rooted in their environmental impact, potential effects on utility rates, and broader community concerns, the underlying technology of artificial intelligence itself is also becoming a point of contention. The extensive consumption of resources for applications like generating essays, answering simple queries, creating images, or providing digital companionship raises questions about priorities, especially when compared to resource use for essential needs like food production. While acknowledging AI’s potential for significant positive applications in fields such as medical diagnostics and scientific research, a growing sentiment suggests that AI should first address its own substantial energy and water footprint before embarking on a global transformation.