Your AI tools run on fracked gas and bulldozed Texas land

The AI period is giving fracking a second act, a shocking twist for an trade that, even throughout its early 2010s increase years, was blamed by local weather advocates for poisoned water tables, man-made earthquakes, and the cussed persistence of fossil fuels.

AI firms are constructing huge information facilities close to main gas-production websites, usually producing their very own energy by tapping straight into fossil fuels. It’s a development that’s been overshadowed by headlines in regards to the intersection of AI and healthcare (and fixing local weather change), nevertheless it’s one that would reshape — and lift tough questions for — the communities that host these amenities.

Take the newest instance. This week, the Wall Avenue Journal reported that AI coding assistant startup Poolside is setting up an information heart complicated on greater than 500 acres in West Texas — about 300 miles west of Dallas — a footprint two-thirds the dimensions of Central Park. The ability will generate its personal energy by tapping pure fuel from the Permian Basin, the nation’s most efficient oil and fuel subject, the place hydraulic fracturing isn’t simply widespread however actually the one recreation on the town.

The undertaking, dubbed Horizon, will produce two gigawatts of computing energy. That’s equal to the Hoover Dam’s total electrical capability, besides as a substitute of harnessing the Colorado River, it’s burning fracked fuel. Poolside is growing the power with CoreWeave, a cloud computing firm that rents out entry to Nvidia AI chips and that’s supplying entry to greater than 40,000 of them. The Journal calls it an “power Wild West,” which appears apt.

But Poolside is much from alone. Almost all the foremost AI gamers are pursuing related methods. Final month, OpenAI CEO Sam Altman toured his firm’s flagship Stargate information heart in Abilene, Texas — round 200 miles from the Permian Basin — the place he was candid, saying, “We’re burning gas to run this data center.”

The complicated requires about 900 megawatts of electrical energy throughout eight buildings and features a new gas-fired energy plant utilizing generators related to those who energy warships, in accordance with the Related Press. The businesses say the plant offers solely backup energy, with most electrical energy coming from the native grid. That grid, for the file, attracts from a mixture of pure fuel and the sprawling wind and photo voltaic farms in West Texas.

However the folks dwelling close to these tasks aren’t precisely comforted. Arlene Mendler lives throughout the road from Stargate. She advised the AP she needs somebody had requested her opinion earlier than bulldozers eradicated an enormous tract of mesquite shrubland to make room for what’s being constructed atop it.

“It has utterly modified the way in which we had been dwelling,” Mendler advised the AP. She moved to the world 33 years in the past searching for “peace, quiet, tranquility.” Now building is the soundtrack within the background, and vivid lights on the scene have spoiled her nighttime views.

Then there’s the water. In drought-prone West Texas, locals are notably nervous about how new information facilities will affect the water provide. The town’s reservoirs had been at roughly half-capacity throughout Altman’s go to, with residents on a twice-weekly outside watering schedule. Oracle claims every of the eight buildings will want simply 12,000 gallons per yr after an preliminary million-gallon fill for closed-loop cooling techniques. However Shaolei Ren, a College of California, Riverside professor who research AI’s environmental footprint, advised the AP that’s deceptive. These techniques require extra electrical energy, which suggests extra oblique water consumption on the energy vegetation producing that electrical energy.

Meta is pursuing the same technique. In Richland Parish, the poorest area of Louisiana, the corporate plans to construct a $10 billion information heart the dimensions of 1,700 soccer fields that may require two gigawatts of energy for computation alone. Utility firm Entergy will spend $3.2 billion to construct three massive natural-gas energy vegetation with 2.3 gigawatts of capability to feed the power by burning fuel extracted by way of fracking within the close by Haynesville Shale. Louisiana residents, like these in Abilene, aren’t thrilled to be encircled by bulldozers across the clock.

(Meta can also be constructing in Texas, although elsewhere within the state. This week the corporate introduced a $1.5 billion data center in El Paso, close to the New Mexico border, with one gigawatt of capability anticipated on-line in 2028. El Paso isn’t close to the Permian Basin, and Meta says the power shall be matched with 100% clear and renewable power. One level for Meta.)

Even Elon Musk’s xAI, whose Memphis facility has generated considerable controversy this yr, has fracking connections. Memphis Gentle, Fuel and Water – which at the moment sells energy to xAI however will ultimately personal the substations xAI is constructing – purchases pure fuel on the spot market and pipes it to Memphis by way of two firms: Texas Fuel Transmission Corp. and Trunkline Fuel Firm.

Texas Fuel Transmission is a bidirectional pipeline carrying pure fuel from Gulf Coast provide areas and a number of other main hydraulically fractured shale formations by way of Arkansas, Mississippi, Kentucky, and Tennessee. Trunkline Fuel Firm, the opposite Memphis provider, additionally carries pure fuel from fracked sources.

For those who’re questioning why AI firms are pursuing this path, they’ll let you know it’s not nearly electrical energy; it’s additionally about beating China.

That was the argument Chris Lehane made final week. Lehane, a veteran political operative who joined OpenAI as vice chairman of world affairs in 2024, laid out the case throughout an on-stage interview with TechCrunch.

“We consider that within the not-too-distant future, a minimum of within the U.S., and actually all over the world, we’re going to must be producing within the neighborhood of a gigawatt of power per week,” Lehane stated. He pointed to China’s huge power buildout: 450 gigawatts and 33 nuclear amenities constructed within the final yr alone.

When TechCrunch requested about Stargate’s resolution to construct in economically challenged areas like Abilene, or Lordstown, Ohio, the place extra gas-powered vegetation are deliberate, Lehane returned to geopolitics. “If we [as a country] do that proper, you may have a possibility to re-industrialize international locations, carry manufacturing again and in addition transition our power techniques in order that we do the modernization that should happen.”

The Trump administration is actually on board. The July 2025 executive order fast-tracks gas-powered AI information facilities by streamlining environmental permits, providing monetary incentives, and opening federal lands for tasks utilizing pure fuel, coal, or nuclear energy — whereas explicitly excluding renewables from assist.

For now, most AI customers stay largely unaware of the carbon footprint behind their dazzling new toys and work instruments. They’re extra targeted on capabilities like Sora 2 – OpenAI’s hyperrealistic video-generation product that requires exponentially extra power than a easy chatbot – than on the place the electrical energy comes from.

The businesses are relying on this. They’ve positioned pure fuel because the pragmatic, inevitable reply to AI’s exploding energy calls for. However the pace and scale of this fossil gas buildout deserves extra consideration than it’s getting.

If this can be a bubble, it gained’t be fairly. The AI sector has change into a round firing squad of dependencies: OpenAI wants Microsoft wants Nvidia wants Broadcom wants Oracle wants information heart operators who want OpenAI. They’re all shopping for from and promoting to one another in a self-reinforcing loop. The Monetary Occasions famous this week if the inspiration cracks, there’ll be plenty of costly infrastructure left standing round, each the digital and the gas-burning form.

OpenAI’s potential alone to satisfy its obligations is “more and more a priority for the wider economy,” the outlet wrote.

One key query that’s been largely absent from the dialog is whether or not all this new capability is even vital. A Duke College examine discovered that utilities sometimes use solely 53% of their obtainable capability all year long. That implies vital room to accommodate new demand with out setting up new energy vegetation, as MIT Know-how Evaluation reported earlier this year.

The Duke researchers estimate that if information facilities lowered electrical energy consumption by roughly half for just some hours throughout annual peak demand durations, utilities may deal with a further 76 gigawatts of recent load. That might successfully take up the 65 gigawatts information facilities are projected to wish by 2029.

That form of flexibility would permit firms to launch AI information facilities quicker. Extra importantly, it may present a reprieve from the frenzy to construct pure fuel infrastructure, giving utilities time to develop cleaner alternate options.

However once more, that will imply dropping floor to an autocratic regime, per Lehane and plenty of others within the trade, so as a substitute, the pure fuel constructing spree seems more likely to saddle areas with extra fossil-fuel vegetation and go away residents with hovering electrical energy payments to finance right this moment’s investments, together with lengthy after the tech firms’ contracts expire.

Meta, as an illustration, has assured it’s going to cowl Entergy’s prices for the brand new Louisiana era for 15 years. Poolside’s lease with CoreWeave runs for 15 years. What occurs to prospects when these contracts finish stays an open query.

Issues might ultimately change. A number of personal cash is being funneled into small modular reactors and photo voltaic installations with the expectation that these cleaner power alternate options will change into extra central power sources for these information facilities. Fusion startups like Helion and Commonwealth Fusion Programs have equally raised substantial funding from these the entrance strains of AI, together with Nvidia and Altman.

This optimism isn’t confined to personal funding circles. The joy has spilled over into public markets, the place a number of “non-revenue-generating” power firms which have managed to go public have really anticipatory, market caps, primarily based on the expectation that they are going to at some point gas these information facilities.

Within the meantime — which may nonetheless be many years — probably the most urgent concern is that the individuals who’ll be left holding the bag, financially and environmentally, by no means requested for any of this within the first place.