Oregon's Data Center Explosion: Who Benefits and Who Bears the Cost?

Oregon is experiencing an "explosion" in data center development, making it the second or third largest market nationally due to tax breaks, land availability, and a temperate climate. Business and tech reporter Mike Rogoway from The Oregonian highlighted that data centers, including those for AI, will soon occupy acreage equivalent to the city of Springfield. These facilities are primarily located in rural and suburban areas like Morrow, Umatilla, and Crook counties (Boardman, Hermiston, Prineville) and Hillsboro, rather than major urban centers, due to cheaper land and power. While they offer some jobs and economic stimulus to struggling small communities, critics point to their minimal employment needs, significant tax exemptions, and substantial strain on public resources. For instance, Google's data center in The Dalles consumes about 40% of the city's water, and data centers collectively use 11% of Oregon's electricity, potentially doubling in a few years to a quarter of the state's supply. Governor Tina Kotek recently declared the pace and kind of data center growth "not sustainable," particularly citing impacts on power and land use. The state Legislature is expected to address regulating this growth and potentially reining in tax breaks in the next session. This creates a potential urban-rural divide, as rural communities often welcome the economic infusion, while statewide officials consider broader impacts. Local governments, often negotiating with trillion-dollar companies like Amazon and Apple, express a desire for more state assistance in securing better deals. New technologies like "bring your own clean energy" (BYOCE), geothermal, and small modular nuclear reactors are being explored to mitigate environmental impacts and power demands. A recent acquisition by Amazon in Morrow County underscores the scale of development, with the company purchasing a 1,300-acre site from Three-Mile Canyon Farms that was rezoned for an "exascale" data center. This proposed facility alone could use as much electricity as all homes in the Portland area and 35 million gallons of water annually. Data centers tend to cluster to share infrastructure and minimize data transmission lag. While Oregon is now a recognized destination for the industry, the benefits are concentrated in a few areas, unlike the state's former timber industry, leading to questions about equitable distribution of economic gains and concerns about the industry's potential for being "overheated."