News
12/11/26
Texas vote rattles data center developers' nerves
Houston, 12 November (Argus) — At a gathering of natural gas suppliers and data
center developers Thursday in Austin, Texas, the question on everyone's mind was
what last week's blue sweep of the state's top offices means for their projects.
"I don't think anybody foresaw the extent of the outcome that we experienced,"
Brandon Seale, senior adviser at VoltaGrid, said while moderating a panel at the
LDC NatGas to Power Forum. "We're used to dealing with different
administrations, different states, different jurisdictions. But it feels like
something changed last week." Voters elected candidates who campaigned on
reining in data centers. But, as many noted, the public backlash had already
become so pronounced that it was outgoing Republican governor Greg Abbott who
first caught the industry off guard: in August, with a pause on new approvals
for data centers seeking a connection to the state's grid and then in September
with a sweeping freeze on permits for data center projects. Trenton Thornock,
founder of Prometheus Hyperscale, said his company had assumed it was shielded
from efforts to slow down some development because its projects make their own
power on site from natural gas, with no grid connection, and did not expect to
find itself caught in the dragnet. "What surprised us is the way that Governor
Abbott directed the TCEQ [the state environmental regulator]," Thornock said.
"Now you can't get a wastewater permit, can't get an air permit. Even if you
were planning on using fuel cells, that's a big question mark. So we were really
surprised." His Texas projects now have "a big question mark" hanging over them,
he said, while the value of his Wyoming site "went way up last week, just by
creating scarcity in Texas, which is the biggest market." Peter Belmonte,
principal at Stallion Energy & Environmental, said projects already under way
have momentum. "This freight train is going 100 miles an hour," he said. "It's
going to be hard to derail things that are already on the books, even with the
moratoriums." But if Texas shuts the door, "people will go to Wyoming, they'll
go to Louisiana, they'll go to Oklahoma," he said. Many in the industry have
acknowledged that things were moving too fast. "There was already a pause on new
permitting, and I think it was needed," said Coby Washburn, vice president of
business development at Woodway Energy Infrastructure. "It's been kind of a bit
of a wild west." Still, most of the panelists said they plan to wait and see how
things shake out, betting that demand is not going away and that Texas'
competitive advantages are hard to beat. Few places can match Texas for land,
gas, renewables, pipelines and support for growth, said Dilanka Seimon, chief
commercial officer at gas producer and power generator BKV. "It's never a good
idea to bet against Texas," he said, "and I wouldn't start now." By Jasmina
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