Texas-based New Era Energy & Digital unveiled ambitious plans in early November to construct a colossal, "hyperscale" data center complex in Lea County, New Mexico, a region already at the heart of the Permian Basin’s oil and gas boom. This facility, designed to power advanced artificial intelligence processing, is so immense that its developers intend to include dedicated nuclear and natural gas power plants with a combined generation capacity of approximately 7 gigawatts. This staggering output would rival or surpass the combined capacity of the West’s largest existing nuclear and natural gas facilities, such as Palo Verde and Gila River near Phoenix, and could theoretically electrify millions of homes, though its primary purpose will be to fuel the insatiable demands of digital activities, from streaming and social media to cutting-edge AI applications.

While the sheer scale of this proposal might suggest extensive media attention, it has received surprisingly little coverage, not due to secrecy, but rather because such announcements have become increasingly commonplace. The realization of New Era’s hyperscale server farm and similar projects remains a distant prospect, requiring substantial progress in both energy generation and consumption infrastructure. Nevertheless, even a fraction of these proposed developments succeeding will profoundly reshape the Western United States’ power grid, landscapes, and economies, mirroring the transformative impact of the post-World War II industrial expansion that saw the proliferation of large-scale coal and hydroelectric power plants to energize burgeoning urban centers via extensive high-voltage transmission networks.

Indeed, this transformation is already in motion. 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—equivalent to the annual power usage of roughly one million American households. This consumption, even within California’s comparatively clean energy framework, resulted in approximately 2.4 million tons of carbon emissions, a figure that would be significantly higher in regions more reliant on fossil fuels. Furthermore, these facilities collectively consumed around 13.2 billion gallons of water for cooling and power generation. In Silicon Valley, a single electricity provider experienced data centers accounting for about 60% of its total load, necessitating rate increases for customers to fund critical upgrades to transmission capacity, substations, and battery energy storage systems required to support these data-intensive operations.

These sprawling digital hubs are also extending their reach beyond the traditional Silicon Valley epicenter, establishing a presence in cities and towns across the West. Over a hundred data centers, resembling oversized warehouses filled with rows of powerful computer servers, have already emerged in Phoenix-area business parks. Projections from utilities suggest that planned expansions could triple Arizona’s total power demand from current levels. In response, Arizona Public Service has announced its intention to continue operating the Four Corners Power Plant beyond its scheduled 2031 retirement, citing the escalating demand driven by data centers as a key factor.

The growth of data centers is a nationwide phenomenon, but its concentration in the Western United States presents unique challenges due to the region’s interconnected yet fragmented power grid, managed by 38 distinct balancing authorities. Projections indicate that nearly all of these grid operators will experience increased data center-driven demand in the coming decade, a demand that many are ill-equipped to meet. The North American Electric Reliability Corporation has issued warnings regarding the heightened risk of winter outages in parts of the West, directly attributing this vulnerability to the escalating power needs of data centers. Consequently, many of the largest data center operators are compelled to develop their own power generation capabilities, while utilities face the urgent task of rapidly expanding generating capacity and associated infrastructure. The financial burden of these necessary infrastructure investments will ultimately be passed on to the region’s electricity consumers.

The challenge of meeting this burgeoning energy demand is compounded by the limitations of relying solely on renewable sources like solar and wind. Utilities are consequently re-evaluating their energy strategies, which include extending the operational life of existing coal-fired power plants and constructing new natural gas facilities. In a notable development, several major technology companies, including Google, Switch, Amazon, OpenAI, and Meta, are exploring the potential of next-generation small modular reactors (SMRs) and advanced nuclear technologies to power their proposed facilities, contingent on the successful development and deployment of these nascent reactor designs.

The environmental implications of this rapid data center expansion are significant and varied. The reliance on fossil fuels contributes to climate change and air pollution, while the extraction processes for oil, gas, and coal can lead to extensive landscape degradation. Large-scale solar and wind installations, while crucial for decarbonization, can impact wildlife habitats and necessitate the construction of hundreds of miles of new transmission lines. Nuclear power, despite its low-carbon operational footprint, carries inherent safety concerns, the challenge of managing radioactive waste, and the environmental risks associated with uranium mining. Even data centers powered entirely by solar and battery storage contribute to demand that could otherwise be met by displacing fossil fuels. Furthermore, without advanced closed-loop air-cooling systems, these facilities can consume substantial amounts of water, often drawing from municipal drinking water supplies.

Prometheus Hyperscale, a Wyoming-based company, has articulated a vision for "sustainable" data centers in the Northern Rockies, emphasizing dedicated clean energy generation, water recycling, and efficient cooling systems. The company has also proposed harnessing waste heat from servers for agricultural applications like greenhouses and shrimp farming, with potential future integration of nuclear micro-reactors. However, the company’s initial operational plans rely on natural gas, with carbon emission offsets achieved through investments in carbon capture and sequestration technology at biofuel plants in Nebraska, highlighting the complexities and trade-offs in achieving true sustainability in this sector.

The proliferation of data centers has sparked considerable local opposition due to their substantial energy and water requirements, as well as their potential impact on utility rates and community resources. However, the decentralized nature of these projects, often evaluated at the local level, can make coordinated resistance challenging. In one instance in the Tucson, Arizona area, residents successfully opposed a proposed data center’s annexation into the city, which would have granted it access to treated wastewater for cooling. The developers subsequently relocated the project to county jurisdiction, opting for an air-cooling system that reduces water consumption but increases energy demand. Further opposition prompted the firm to commit to investing in renewable energy on the Tucson Electric Power grid to offset its entire electricity usage.

This trend is further fueled by the fact that many local governments and utilities actively welcome data center development. These facilities can provide valuable job creation and tax revenue, particularly in economically challenged areas, provided they are not granted excessive tax exemptions. Utilities, eager to expand their customer base and revenue streams, are often enthusiastic about the prospect of selling more electricity and using the increased demand to justify investments in new infrastructure, which can lead to rate increases for all customers. Jeff Brigger, an executive at NV Energy, expressed the utility’s enthusiasm for serving the significant new load from data centers in Nevada.

Beyond the direct environmental and economic considerations, a growing segment of the public harbors concerns about the underlying purpose of Artificial Intelligence itself. While the energy and water consumption required for essential activities like food production or critical scientific research is generally understood, the notion of powering coal plants solely for AI-driven tasks such as generating essays, answering trivial questions, creating digital art, or providing companionship raises ethical questions. While AI holds immense potential for positive societal impact, including advancements in medical diagnostics and the analysis of vast datasets to address complex global challenges like disease and geopolitical instability, a critical conversation is emerging about the need for AI to become more energy and water-efficient in its own development and deployment.