AI Data Centers Exploit Texas Loopholes as Pollution Reaches Catastrophic Levels

Data Centers Are Quietly Taking Over Texas. The Pollution Could Be Catastrophic

A regulatory loophole has let in thousands of new fossil-fuel-burning power sources across the state. The AI business is booming -- but residents feel blindsided. Omaira Garcia didn't realize life on her small ranch in Abilene, Texas, was about to change until clouds of dust -- kicked up by a mysterious project next door -- began to engulf her home. The Air Force veteran says she found out about OpenAI's plans to build its flagship Stargate data center directly beside her property only after construction began in the summer of 2024. Today, the site's natural-gas-powered electrical plant sits roughly 500 yards from her house, the exhaust stacks clearly visible from her kitchen window. "We weren't given any time to understand what this impact was going to be on us," the mother of two says through tears. "We're trapped here." OpenAI did not respond to multiple requests for comment. A spokesperson for Stargate's developer, Crusoe, says that the data center has "contributed meaningfully to the economic development" of Abilene, and its investments are "funding new fire trucks, school expansions, and road improvements across the city." As President Trump seeks to fast-track AI development across the country, he has found a willing ally in Texas governor Greg Abbott, who has previously referred to the industry as the state's "gold rush" -- though his enthusiasm has recently dampened in the face of widespread opposition. With some 300 data centers already in operation and 200 more in development, Texas could surpass Virginia as the nation's leading data center market by 2030. Amidst the frenzy to capitalize on the AI boom, a regulatory loophole has allowed dozens of data centers like Stargate to quietly construct massive power sources that emit harmful pollutants with little to no public notice, a Floodlight investigation has found. Typically, before you can build a major source of new emissions, you have to get a major air permit, which includes extensive environmental reviews and engagement with the local community. But in Texas, regulators have allowed some data centers like Stargate to avoid that process by first obtaining so-called minor air permits -- the kind more commonly associated with dry cleaners and autobody shops and rubber-stamped with minimal review. "Those lower-level permits get granted very quickly and often without the public knowing," says Kathryn Guerra, who spent nearly four years at the Texas Commission on Environmental Quality (TCEQ) before joining the watchdog group Public Citizen. "That feels pretty intentional." These minor permits -- as well as the nondisclosure agreements many developers require in their dealings with local governments and residents -- are how communities like Garcia's are left stunned when exhaust stacks pop up in their backyards. Stargate was first announced in January 2025 as part of a $500 billion joint venture between OpenAI, SoftBank, and Oracle to construct hyperscale AI data centers across the country. Construction was already well underway in Abilene. The 1,100-acre campus, along with its 360-megawatt onsite gas plant, were among the first hyperscale AI data centers to break ground in Texas. A wave of similar proposals has since made the state ground zero for the AI-driven build-out of fossil-fuel power plants across the US. Lured by prolific gas reserves and an industry-friendly government, AI companies have flocked to Texas seeking to construct what researchers call a "shadow grid" of custom-built power plants capable of fueling entire cities. "You haven't seen anything like that since the fracking boom," says Jenny Martos, a researcher at Global Energy Monitor, a nonprofit that tracks energy infrastructures worldwide. Martos found that Texas has put more than 80 gigawatts of new gas plants into its construction pipeline, making it second only to China. Roughly half that capacity is reserved for data centers. Martos describes the trend as "enormous" and says it risks "locking in fossil fuel for the foreseeable future." Including Stargate's Abilene campus, at least 15 gas plants tied to data centers are planned for Texas, according to research by energy analytics firm Cleanview released last month. Permits reviewed by Floodlight show that nine of them combined could emit more than 130 million tons of greenhouse gases every year. That's equivalent to the annual emissions of 35 coal-fired power plants, according to an Environmental Protection Agency calculator. While actual emissions are usually lower than estimates, the impact on the climate could still be enormous: If completed, these nine plants have the potential to emit more annual greenhouse gases than most countries do -- even if emissions end up being half of what's permitted. Despite ultimately seeking to build a gas plant that could power every home in Abilene more than 20 times over, Stargate's developers started out much smaller on paper. In 2024, they secured permission to operate on-site power sources through minor permits known as "permits by rule" and "standard permits." Widely understood to be used by low-level polluters across the country, these permits don't require environmental studies, public notice, or public comment periods. Bruce Buckheit, a former EPA air enforcement chief who served under multiple Republican administrations, says state agencies typically use the permit-by-rule process "for small things that happen a lot," like gas stations or dry cleaners, so "they don't have to waste their time reinventing the wheel for common stuff." But Stargate "isn't common stuff," he says. Under the minor permits, Stargate's fleet of 10 turbines and 62 backup diesel generators are currently allowed to emit more than 1.6 million tons of greenhouse gases and 1,000 tons of combined harmful air pollutants every year. Despite being permitted for continuous use, Stargate's developer, Crusoe, tells Floodlight that the turbines will only be used for backup power. "Normally that permit by rule was conceived of and implemented in a case where an operator wanted a backup generator or three backup generators. When you get to 62, you start thinking, 'Well, wait a minute, maybe the scale is wrong here,'" Buckheit says. Stargate is far from alone. Since 2024, at least 38 data centers across Texas have received minor permits to operate onsite power sources, according to a Floodlight analysis. As a result, Texas regulators quietly sanctioned the use of more than 2,100 backup diesel generators across the state. The Texas Commission on Environmental Quality did not answer specific questions relating to Floodlight's findings. Instead, a representative wrote that "TCEQ only issues air permits that comply with applicable state and federal air permitting rules and regulations including applicable public participation requirements." While intended for emergency power, the generators are also routinely operated for testing and maintenance, according to their permits. Taken together, the thousands of new generators identified by Floodlight are permitted to emit nearly 2,500 tons of nitrogen oxides into Texas communities every year -- more than triple the state's newest coal-fired power plant. (Nitrogen oxides are highly toxic gases associated with severe respiratory illness and even premature death.) More than half of the data centers identified by Floodlight provided regulators with annual nitrogen oxide emission estimates that were just shy of thresholds that would require public input and more detailed environmental reviews. For example, outside of San Antonio, a Vantage data center received permission to emit 99.8 tons per year of the gas -- barely below the area's 100 ton-per-year threshold. In several cases, data centers secured these permits before seeking massive expansions later on, deploying a "small first, big later" strategy that watchdogs say limits public input and creates unstoppable momentum for their projects. The year after receiving minor air permits for its 10 turbines and 62 generators, Stargate's developers filed their first major air permit -- for 41 more turbines and 18 more generators. If approved, the expansion would make Stargate one of the largest fossil-fuel power plants in the state -- capable of powering more than 1 million homes and emitting more annual greenhouse gases than nearly 2 million cars. "I sincerely doubt that the company made some last-minute decision to suddenly expand," says James Doty, who spent nearly 30 years monitoring air quality at the Texas Commission on Environmental Quality. Stargate's developers circulated promotional materials in May 2025 saying they had contracts to secure 1.2 gigawatts of power by the end of that year. To get a major permit for the Abilene campus, Stargate developers will need to equip the additional turbines with the most effective emissions reduction technology available, and the project will need to undergo extensive environmental reviews and public comment periods. But nearly two years after construction began on the project, it may be too late for local residents to do anything. "By the time public participation is an option for community members, that facility has already been built, and there's no opportunity for the public to give meaningful input to the TCEQ about whether or not they even want that facility in their neighborhood," Guerra says. Former EPA air enforcement chief Buckheit says Stargate's staggered permitting approach in Abilene could violate EPA "aggregation" policies, which are intended to evaluate the whole project. The agency's own handbooks refer to minor permits that precede major ones as "sham permits." "You can't come in with a permit application for two [turbines], and then three months later, you come in with a permit application for two more," Buckheit says. "All of this should have been rolled into one permit," he adds. Guerra and Doty, both former TCEQ staffers, agree that their old agency should have required Stargate to obtain major permits to begin with. "If a data center gets its operating permit, it's too late," Doty says. "The only chance to stop something like this is to do it at the very, very, very beginning of the process -- before the permit is issued -- through the public participation process." The former regulators recommend that concerned residents pay close attention to notices from state environmental agencies to spot upcoming projects and request contested case hearings when possible. Few of those avenues remain viable for Abilene residents. Guerra believes "it's a foregone conclusion" that the expansion request will be granted. Even if Stargate secures the appropriate permits, both former TCEQ staffers doubt the agency is properly equipped to enforce them. "The data center industry is expanding at a rate that is beyond the capability" of the TCEQ to sufficiently regulate, Guerra says, adding that the agency's enforcement backlog consists of more than 1,400 unresolved cases. "This past year, they were able to resolve 39 of those 1,400 cases. At that rate, it's going to take them 35 years to resolve all of them," she says. "Every single permit that this agency issues, in my opinion, is one more than they can effectively regulate," adds Guerra, who worked for TCEQ until 2016. An agency spokesperson disputed Guerra's claims, writing that "industry growth has not compromised TCEQ's commitment to fulfill its mission of protecting public health and the environment." The representative wrote that TCEQ had conducted more than 100,000 investigations in 2025 (one case can have multiple investigations) and claimed that the low number of enforcement actions taken by the regulator "reflects high overall compliance rates" rather than "a lack of enforcement activity." Guerra says that TCEQ is "full of folks who are very interested in protecting the environment," but the leadership team -- many of whom were appointed by Abbott -- has made the agency notoriously lax on enforcement. The policies may be drawing investments for the state, but those gains aren't being felt by some fenceline residents in Abilene. Garcia and her husband spent more than a year looking for their "piece of heaven" in the country. "We took so much time to get it, and my kids absolutely love it. But under these conditions, we no longer have that," she says. In addition to concerns about air pollution, Garcia says the data center has transformed the quality of life on her once-quiet country road. Trash regularly lines the fences and gridlock traffic tied to building the massive facility has at times made it difficult to leave her own driveway. Crusoe wrote that the company takes "quality-of-life concerns seriously" and is committed "to being a responsible neighbor throughout construction and operations." Yet despite prominently featuring in a Floodlight/PBS short documentary on the topic, Garcia says Stargate's developers have yet to reach out to her or her family. Garcia says she wasn't made aware of Stargate's recent expansion plans until Floodlight informed her of the pending major air permit applications. Already coping with the presence of 10 gas-powered turbines beside her property, the plan for 41 more came as a gut punch. "I can't even begin to understand what kind of impact that's going to have on me and my health in the future," she says. She tried to put the house on the market after learning about what was being built next door, but she says she didn't get a single offer. Realtors suggested she convert it into an Airbnb for Stargate workers, but Garcia says she can't afford to buy another home to live in while keeping the one beside the data center. "It feels almost impossible unless Stargate purchases it, because what other homeowner is going to want to deal with what we're dealing with?" The dilemma has left her feeling helpless. "I don't know what the future looks like." This story is from Floodlight, a nonprofit newsroom that investigates the powers stalling climate action, and published in collaboration with WIRED. Sign up for Floodlight's newsletter here. Let us know what you think about this article. Submit a letter to the editor at [email protected].

The Pollution Being Churned Out by AI Data Centers Is So Severe That It's Almost Incomprehensible

Can't-miss innovations from the bleeding edge of science and tech The massive surge of fossil fuel-powered data centers cropping up across the country are emitting an enormous amount of pollution, a pulsing indication that we're headed in the wrong direction in the midst of a climate crisis. The extent of the this polluting activity is confounding. As climate action group Floodlight found in a recent investigation spotted by Wired, Texas has become the epicenter of the United States' current obsession with constructing AI data centers. Companies are exploiting regulatory loopholes as they construct new facilities powered by pollutant-spewing onsite gas plants. The rate of growth of this "shadow grid" of custom power plants, some of which are big enough to fuel entire cities, is so enormous that the only global entity installing more gigawatts of gas plants than Texas is China, according to environmental group Global Energy Monitor. On a national scale, scientists are still racing to wrap their heads around the environmental footprint of our new AI obsession. Cornell researchers found that at the current rate of AI growth, the burgeoning industry could represent 24 to 44 million metric tons of carbon dioxide emissions by 2030, the equivalent of adding five to ten million cars to US roadways. Meanwhile, ongoing projects like the one in Abilene, Texas, the starting point of president Donald Trump's flagship $500 billion Stargate project, are obtaining environmental permits that are usually reserved for small businesses like gas stations or dry cleaners, as Wired reports. The project's facilities feature a whopping 62 diesel backup generators, making it orders of magnitude bigger than smaller ventures that use just one or two. According to Floodlight, at least 38 data centers in Texas are using such regulatory loopholes to gain permits for onsite power sources, representing northward of 2,100 backup diesel generators, and yearly emissions of 2,500 tons of nitrogen oxides, which are highly toxic gases. One common tactic for operators in Texas, according to Floodlight, is to announce a small data center development that would come in under pollution thresholds, only to suddenly expand once established. Worse yet, for residents, it's already likely too late to do anything against the data center expansion. "The only chance to stop something like this is to do it at the very, very, very beginning of the process -- before the permit is issued -- through the public participation process," former Texas Commission on Environmental Quality (TCEQ) staffer James Doty told Wired. More on data center pollution: Amazon Is Spewing a Record Breaking Amount of Pollution to Power Its AI Data Centers