by Will Lavallo, S26 Environmental Clinic Student
Tylor Skenandore, a horse trainer in Abilene, Texas, and his horse Bubbles are used to looking out across the flat West Texas horizon and seeing “nothing but bare nothing.” From his twelve-stall horse barn, that view has changed. Now he sees thousands of workers constructing “Stargate,” one of the largest AI data centers in the world.
Skenandore is not alone in watching his rural Texas community transform. Texas now trails only Virginia in the number of data centers, and Governor Gregg Abott has compared the state’s AI boom to the California gold rush of 1849. The rapid spread of data centers across Texas may seem inevitable. But it raises serious questions about water, energy, and who gets to make decisions about local communities.
- What is the impact on water and energy?
Data center developers promise jobs, investment, and tax revenue. But these data centers suck up incredible amounts of electricity and water. ERCOT, the state utility, predicts that new data-center construction will mean that Texas will have to double its 2024 energy production by 2031. And data centers are projected to consume 49 billion gallons of water this year – that’s more water than the residents of Austin use in the same time period. With much of Texas already facing drought cycles, the spread of water hungry data centers across the state could deepen Texas’s water stress and leave communities even more vulnerable to future droughts.
2. Why rural Texas?
Many developers target rural Texas towns as the new home of their data center because land and electricity is relatively cheap, taxes are low, large tax incentives and abatements are typically offered, and the state offers a friendly regulatory environment (discussed more below). For example, the developers of the Stargate project were drawn to Abilene due to the 85% property tax abatement offered by the city.
3. Can communities and local governments stop a data center?
In Abilene, the data center project was not subject to much public scrutiny, and the local community did not show much resistance to the Stargate project at city council meetings. For example, only one person testified in opposition to the generous tax abatement given to Stargate.
However, there are a few examples in Texas of local communities mobilizing and putting pressure on their local governments to stop a data center from coming to town.
In College Station, hundreds of angry community members put pressure on their local representatives at a city council meeting, and the city leaders ultimately rejected the sale of property to a data center developer. Also, in San Marcos, the community assembled in mass at a recent city council meeting and successfully pressured the city officials to deny a request for a land use change that would have cleared the path for a data center.
Cities do have the power to control what happens within their limits through land use and utility control and can listen to their community members and prevent or be proactive about a potential data center coming to town.
However, there is a practical “loophole” in our Texas land use laws. A data center developer can build in areas outside of city limits where county governments are left almost completely powerless and have far fewer tools to regulate data centers than a city.
At the state level, the legislature has taken continuous steps to limit the power of local governments to enact rules in the interest of their residents. With local governments left with limited tools to protect their community’s way of life and limited water, the question is whether communities will have a meaningful voice in shaping how that future unfolds.
References:
KUT News, San Marcos City Council blocks proposed data center.
Texas Monthly, A Conservative Cowboy Town Embraces the AI Revolution.
Texas Monthly, Why Are So Many Data Centers Coming to Texas?
Texas Public Radio, Texas Matters: The future of AI and water in Texas.
Texas Standard, Why one expert says communities should draft a data center ‘action plan.’
Texas Tribune, Can local officials stop data centers in Texas?
Texas Tribune, Rural Texas casting skeptical eye on data center openings.
The articles published on this site reflect the views of the individual authors only. They do not represent the views of the Environmental Clinic, The University of Texas School of Law, or The University of Texas at Austin.