At what cost? Data centers in Oregon often cost more than they earn
The article discusses how Oregon's data center boom has not delivered expected job creation but has exacerbated environmental concerns, particularly regarding electricity and water usage. It highlights how these facilities often receive substantial tax breaks, questioning their true economic benefit to the state while contributing to climate change goals being missed. State lawmakers enacted a yearlong moratorium on data centers to allow a governor's panel to develop better regulations and incentives.
Oregon, a leading state for data center development, is grappling with the high costs associated with their rapid expansion, according to a report by Alex Baumhardt of the Oregon Capitol Chronicle, discussed on NPR for Oregonians. The state's data center boom has been criticized for failing to deliver promised job growth, while significantly increasing demand for natural gas and coal-fired electricity, and straining water resources.
Journalist Alex Baumhardt highlighted that the industry's projections of massive energy demand create urgency for utilities to invest in new infrastructure, with costs ultimately borne by consumers. Data centers, especially concentrated in Eastern Oregon, are driving up baseline electricity consumption and exacerbating groundwater issues due to their high water demands. Heated and chemically concentrated water runoff from facilities like the Port of Morrow contributes to nitrate pollution, impacting drinking water and sensitive aquatic ecosystems.
Economically, data centers often receive substantial property tax abatements through state programs like the Standard Enterprise Zone. Examples include a TikTok data center in Washington County that hired only nine people despite large tax breaks, and Google's facility in The Dalles (Wasco County) which recently received a $29 million abatement for a new facility, despite criticisms from figures like former state representative Rep. Lively who argue these incentives no longer align with their original intent of fostering widespread economic benefit. These tax breaks and environmental impacts collectively threaten Oregon's ambitious greenhouse gas reduction targets, pushing back timelines for achieving climate goals.
In response to these growing concerns, Oregon lawmakers enacted a yearlong moratorium on new data center development. This pause is intended to allow a governor's advisory panel to develop comprehensive recommendations for new regulations, guardrails, and more equitable economic incentives. Experts and environmental groups are advocating for greater transparency in data center resource use, a critical review of existing tax abatement programs, and new policies, such as mandating data centers to power down during peak demand periods, to mitigate their environmental and economic impact.