Analysis by Energy Workforce President Tim Tarpley
Shark Tank investor Kevin O’Leary has been pushing to get a massive 40,000-acre data center facility approved in Utah, which, when completed, would be one of the largest facilities in the world. The $100 billion project, known as Stratos, is designed to reach a 9-gigawatt power capacity upon completion. To get an understanding of scale, that is currently double the power demand of the entire State of Utah.
The site is located along the Ruby Pipeline, which carries natural gas produced in Wyoming to Nevada, Oregon and California. The site is expected to build its own gas-fired power plant, potentially with some renewable capacity. This plant could pull significant capacity from the Ruby pipeline, which, in turn, would create significant new production demands in the Wyoming basin that feeds the pipeline.
There are a couple of takeaways I think we can take from the Utah approval. First, there is growing, organized opposition to new data center projects. However, it does appear that much of this opposition is organized outside the area, so it is often hard to discern how much of it is truly being organized organically in the areas surrounding the proposed facilities, or whether it is being organized.
The other big takeaway is that industrial and commercial land with access to major natural gas pipelines with spare capacity (or even near proposed pipelines likely to be approved) is growing ever more valuable. Access to gas may well be the waterfront real estate of the 21st century. Gone are the days when industrial sites needed to be close to water or rail for easy transport, and that was the only factor to consider. Now, it is becoming clear that access to reliable gas is equally, if not more, important. We are also starting to see many large data center projects proposed and built close to major gas fields, which is logical, as it will be easier to guarantee access when pipeline capacity becomes constrained.
Tim Tarpley, Energy Workforce President, analyzes federal policy for the Energy Workforce & Technology Council. Click here to subscribe to the Energy Workforce newsletter, which highlights sector-specific issues, best practices, activities and more.
