The era of artificial intelligence gives fracking a second act, a surprising turnaround for an industry that, even in the early 2010s, was blamed by climate advocates for poisoned aquifers, man-made earthquakes and the persistence of fossil fuels.
AI companies are building massive data centers near major natural gas production sites, often generating their own energy by harnessing fossil fuels directly. It’s a trend that’s been overshadowed by headlines about the intersection of AI and healthcare (and solving climate change), but it’s one that could reshape — and raise tough questions for — the communities that host these facilities.
Take the last example. This week, the Wall Street Journal was mentioned that AI coding assistant startup Poolside is building a data center complex on more than 500 acres in West Texas — about 300 miles west of Dallas — a footprint that’s two-thirds the size of Central Park. The facility will generate its own power by pumping natural gas from the Permian Basin, the nation’s most prolific oil and gas field, where hydraulic fracturing is not just common, but really the only game in town.
The project, called Horizon, will generate two gigawatts of computing power. That’s equivalent to the entire electrical capacity of the Hoover Dam, except instead of harnessing the Colorado River, it burns fracked gas. Poolside is developing the facility with CoreWeave, a cloud computing company that rents access to Nvidia AI chips and provides access to more than 40,000 of them. The Journal calls it the “energy Wild West,” which seems apt.
However, Poolside is far from alone. Almost all the big AI players follow similar strategies. Last month, OpenAI CEO Sam Altman toured his company’s flagship Stargate data center in Abilene, Texas — about 200 miles from the Permian Basin — where he was candid, saying:We make gas to run this data center.”
The complex requires about 900 megawatts of electricity in eight buildings and includes a new gas-fired power plant that uses turbines similar to those that power warships, according to the Associated Press. The companies say the plant only provides backup power, with most electricity coming from the local grid. That grid, for the record, comes from a mix of natural gas and the extensive wind and solar farms in West Texas.
But people who live near these projects aren’t exactly comforted. Arlene Mendler lives across the street from the Stargate. She told the AP that she wishes someone had asked her before bulldozers obliterated a huge swath of scrubland to make room for whatever is being built on top of it.
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“It has completely changed the way we lived,” Mendler told the AP. He moved to the area 33 years ago in search of “peace, quiet, tranquility.” Now the construction is the soundtrack in the background and the bright lights on the stage have spoiled its night view.
Then there’s the water. In drought-prone West Texas, locals are particularly nervous about how new data centers will affect water supplies. The city’s reservoirs were at about half capacity during Altman’s visit, with residents watering twice a week. Oracle claims each of the eight buildings will need just 12,000 gallons per year after an initial million-gallon fill for closed-loop cooling systems. But Shaolei Ren, a University of California at Riverside professor who studies AI’s environmental footprint, told the AP that’s misleading. These systems require more electricity, which means more indirect water consumption in the power plants that generate that electricity.
Meta follows a similar strategy. In Richland Parish, Louisiana’s poorest area, the company plans to build a $10 billion data center the size of 1,700 football fields that will require two gigawatts of power just for computing. Utility company Entergy will spend $3.2 billion to build three large 2.3-gigawatt gas-fired power plants to power the facility with gas extracted through fracking in the nearby Haynesville Shale. Louisianans, like those in Abilene, they are not excited to be surrounded by bulldozers around the clock.
(Meta also manufactures in Texas, though elsewhere in the state. This week the company announced a $1.5 billion data center in El Paso, near the New Mexico border, with one gigawatt of capacity expected online in 2028. El Paso is not near the Permian Basin, and Meta says the facility will be coupled with 100 percent clean and renewable energy. One point for Meta.)
Even Elon Musk’s xAI, whose Memphis facility has created significant controversy this year, it has fracking connections. Memphis Light, Gas and Water — which sells power to xAI but will eventually own the substations xAI builds — buys natural gas on the spot market and pipes it to Memphis through two companies: Texas Gas Transmission Corp. and of the Trunkline Gas Company.
The Texas Gas Transmission is a two-way pipeline that carries natural gas from Gulf Coast supply areas and several major hydraulically fractured shale formations through Arkansas, Mississippi, Kentucky, and Tennessee. Trunkline Gas Company, Memphis’ other supplier, also transports natural gas from fracked wells.
If you’re wondering why AI companies are going this route, they’ll tell you it’s not just about electricity. is also to defeat China.
That was Chris Lehane’s argument last week. Lehane, a veteran political operative who joined OpenAI as vice president of global affairs in 2024, made the case during an on-stage interview with TechCrunch.
“We believe that in the not-too-distant future, at least in the U.S., and really around the world, we’re going to need to produce about a gigawatt of energy per week,” Lehane said. He pointed to China’s massive energy development: 450 gigawatts and 33 nuclear plants built in the last year alone.
When TechCrunch asked about Stargate’s decision to build in financially troubled areas like Abilene or Lordstown, Ohio, where more natural gas facilities are planned, Lehane returned to geopolitics. “If we [as a country] get this right, you have the opportunity to re-industrialize countries, restore production and also transition our energy systems so that we can do the modernization that needs to happen.”
The Trump administration was certainly involved. July 2025 executive order accelerates natural gas-powered AI data centers by streamlining environmental permits, offering financial incentives, and opening up federal lands to projects that use natural gas, coal, or nuclear power — expressly excluding renewables from support.
At present, most AI users are largely unaware of the carbon footprint behind their shiny new toys and work tools. They focus more on features like Sora 2 — OpenAI’s hyperrealistic video production product that requires exponentially more power than a simple chatbot — than on where the electricity comes from.
Companies count on it. They have positioned natural gas as the realistic, inevitable answer to the explosive power demands of artificial intelligence. But the speed and scale of this fossil fuel construction deserves more attention than it gets.
If this is a bubble, it won’t be pretty. The field of artificial intelligence has become a circular executive branch of dependencies: OpenAI needs Microsoft needs Nvidia needs Broadcom Oracle needs data center operators who need OpenAI. Everyone buys and sells to each other in a self-reinforcing loop. The Financial Times noted this week that if the foundations fail, a lot of expensive infrastructure, both digital and gas, will be left behind.
The ability of OpenAI alone to live up to its obligations “is of increasing concern to them wider economy“, the newspaper wrote.
A key question that has been largely absent from the debate is whether all this new capacity is still necessary. A Duke University study found that utilities typically use only 53% of their available capacity throughout the year. This suggests significant room to meet new demand without building new power plants, MIT Technology Review reports reported earlier this year.
Duke researchers estimate that if data centers cut electricity consumption roughly in half for just a few hours during annual peak demand periods, utilities could handle an additional 76 gigawatts of new load. This would effectively absorb the 65 gigawatts of data centers projected to be needed by 2029.
This kind of flexibility would allow companies to launch AI data centers faster. More importantly, it could provide a reprieve from the rush to build natural gas infrastructure, giving utilities time to develop cleaner alternatives.
But again, that would mean losing ground to an authoritarian regime, according to Lehane and many others in the industry, so the natural gas building spree seems likely to limit areas with more fossil fuel plants and leave residents with rising electric bills to finance today’s investments, even long after the companies’ contracts expire. technology.
Meta, for example, has guaranteed to cover Entergy’s costs for Louisiana’s new generation for 15 years. Poolside’s lease with CoreWeave is for 15 years. What happens to customers when these contracts expire remains an open question.
Things may eventually change. A lot of private money is being poured into small modular reactors and solar installations with the expectation that these cleaner energy alternatives will become more central power sources for these data centers. Fusion startups like Helion and Commonwealth Fusion Systems have similarly raised significant funding from those at the forefront of artificial intelligence, including Nvidia and Altman.
This optimism is not limited to private investment circles. The excitement has spilled over into the public markets, where several non-revenue energy companies that have gone public have actually forward thinking market cap, based on the expectation that they will one day power these data centers.
In the meantime – which could still be decades – the more pressing concern is that the people who will be left holding the bag, financially and environmentally, never asked for any of this in the first place.
