Data Center Geography, Power Grids, and Permitting Risk

Originally published for customers May 20, 2026.

What’s the issue?

Large AI data centers are emerging across the country, but opposition and permitting complexity vary dramatically depending on geography and design.

Why does it matter?

Infrastructure configuration including grid interconnection, pipeline jurisdiction, transmission needs, and federal involvement can materially impact project timelines, litigation exposure, and execution risk.

What’s our view?

The projects with the clearest path forward increasingly resemble modern pipeline buildout strategy: build where infrastructure already exists, federal complexity is limited, and the opposition gauntlet is easier to survive.

AI data centers are expanding rapidly, but their permitting risk depends heavily on where they are built and how they are designed. Geography, grid interconnection, pipeline jurisdiction, transmission needs, and federal oversight can all affect timelines, litigation exposure, and execution risk. This post compares major projects in Utah, Ohio, New Mexico, and Texas to show why some sites face much more friction than others.

Why Geography Matters

There is a reason most major natural gas pipeline expansion in recent years has concentrated in places like Texas and Louisiana. Developers learned to build where infrastructure already exists and where opposition is less likely. AI infrastructure may be moving in a similar direction. To better understand what is emerging, we looked at several major data center projects with significant natural gas footprints proposed across Texas, New Mexico, Ohio, and Utah.

Utah: Salty Opposition

The proposed Stratos project in Box Elder County, Utah captures what happens when AI infrastructure reaches a scale impossible for a region to ignore.

Backed by Kevin O’Leary, the project proposes roughly 9 GW of natural gas-fired generation across three phases designed largely outside the traditional grid interconnection model.

Scale and Power Demand

Utah’s current average electric load is roughly 4 GW. In other words, this single project proposes more than double the state’s current electricity demand.

Water and Environmental Concerns

Opposition has centered on water usage near the Great Salt Lake, emissions, thermal impacts, and broader concerns about infrastructure at this scale. The project received county approval in May, but opponents are now pursuing a referendum effort that could place the issue before voters in November.

Pipeline and FERC Risk

The project was deliberately sited near the Ruby Pipeline, meaning any required gas supply lateral would likely connect into interstate infrastructure and potentially trigger FERC jurisdiction. If so, pursuing a traditional Section 7(c) certificate from the outset may actually prove more efficient than a blanket authorization. Taking a lesson from the Green Chile lateral dispute we discussed in Too Much Spice? Green Chile Draws More Protests, the procedural advantages of the blanket program can erode quickly if protests force conversion into a full certificate proceeding.

Ohio: PORTS and Transmission

The proposed PORTS Technology Campus in Ohio has visible political support from the Trump administration and a reported $33 billion partnership with Japan’s SoftBank. Like Stratos, the project is enormous, proposing roughly 9.2 GW of natural gas-fired generation. But the infrastructure and permitting profile look very different.

Brownfield Siting

The project is planned near the Portsmouth Gaseous Diffusion Plant, an existing DOE remediation site. Brownfield siting may help the project, but it also places the development in a more complex federal and regulatory environment.

Grid Interconnection

The project is planned near the Portsmouth Gaseous Diffusion Plant, an existing DOE remediation site, and would require a roughly 50-mile transmission line crossing southeastern Ohio. It would also connect into PJM’s grid. Opposition comments have already urged regulators to reject portions of the transmission proposal.

Gas Supply Complexity

The project also appears likely to require FERC jurisdiction for any associated gas supply lateral because Ohio lacks the extensive intrastate pipeline optionality available in places like Texas. Brownfield siting and federal political support may help the project. But transmission infrastructure, interstate pipeline requirements, DOE involvement, and PJM interconnection significantly increase the project’s federal nexus and procedural complexity.

New Mexico: One State, Two Different Maps

Too Much Spice, Revisited

As discussed previously in Too Much Spice? Green Chile Draws More Protests, the Green Chile project in south-central New Mexico drew significant organized opposition despite being far smaller than several projects now emerging elsewhere. Since then, the project’s power strategy appears to have evolved.

Originally, Project Jupiter appeared tied to roughly 4 GW of gas-fired generation. But an April announcement stated the facility would instead be “fully supported” by approximately 2.45 GW of Bloom fuel cells replacing previously planned gas turbines and diesel generators.

Green Chile and Project Jupiter

Interestingly, the Green Chile lateral application at FERC remains active while the broader generation strategy remains somewhat unclear publicly. As a result, it is difficult to determine whether gas generation has been fully eliminated or simply reduced. What does appear increasingly clear, however, is that some developers are redesigning infrastructure configurations in response to permitting pressure and organized opposition.

New Era Lea in the Permian

Roughly 250 miles east of Project Jupiter, the proposed New Era Lea Data Center presents an almost opposite permitting profile. The project proposes roughly 7 GW of generation (5 GW nuclear and 2 GW natural gas) near the Permian Basin. The company specifically highlighted proximity to gas pipelines, existing power infrastructure, water availability, and fiber connectivity when discussing site selection.

Additional pipelines or gas supply laterals are likely less politically disruptive because large-scale energy infrastructure is already there. Proximity to intrastate pipeline infrastructure also increases the likelihood that gas supply could occur through intrastate laterals rather than requiring FERC approval.

Texas: If You’re Going to Build Big, Build in Texas

Matador in Amarillo

The infrastructure and regulatory environment in Texas looks increasingly attractive for data center development. The proposed Matador project near Amarillo may be the clearest example. At full scale, the project proposes a massive 17 GW of generation from natural gas (11 GW), nuclear (4.4 GW), and solar with batteries (1.6 GW). Opposition groups including Public Citizen and grassroots organizations have challenged the project, and critics previously celebrated the departure of a major tenant late last year. But momentum signals remain strong.

In February, TCEQ denied requests challenging the project’s air permits. Since then, developers have reportedly expanded the project further through additional permitting activity increasing total planned generation from 11 GW to 17 GW. Developers previously announced that Phase 1 would interconnect directly into Energy Transfer infrastructure south of the campus. Matador is also currently working through NERC’s EIS review framework for the nuclear generation, one of the first major applicant-driven reviews following recent NEPA amendments.

GW Ranch Near Pecos

GW Ranch near Pecos, Texas may represent the model many future developers increasingly try to emulate. The project proposes roughly 7.65 GW of gas-fired generation plus battery storage largely outside traditional grid structures. Despite its enormous scale, it has attracted relatively limited public opposition so far.

Pipeline Access Advantage

Location appears central to that difference. The project sits near Waha and existing pipeline infrastructure, including plans for a direct 15-mile pipeline connection intended to provide substantial gas supply optionality. It also secured TCEQ air permits earlier this year.

Unlike projects requiring extensive interstate expansion, major transmission buildout, or highly visible new infrastructure corridors, GW Ranch appears deliberately configured to minimize permitting complexity from the outset.

What It Means for AI Buildout

The clearest path forward increasingly resembles modern pipeline buildout strategy: build where infrastructure already exists, federal complexity is limited, and the opposition gauntlet is easier to survive.

If you would like to discuss emerging trends in data center development, associated pipeline infrastructure, permitting risk, or evolving opposition dynamics, please contact us.