Data centers, along with the artificial intelligence they power, are increasingly viewed with skepticism by a public no longer so enamored with their potential and more attuned to risks and downsides. Large data center complexes popping up alongside communities across the country threaten to drive up electricity prices, eat up resources, and create air pollution, while not always living up to job and tax revenue claims.

This battle is currently playing out in the small border town of Santa Teresa, in Dona Ana County of New Mexico, where road construction and ground clearing at the massive Project Jupiter AI data center began last fall. Developed by BorderPlex Digital Assets, the complex will be powered by a self-contained power system separate from the state’s main electricity grid used by the public. The data center is being built for Oracle, which will use it to host artificial intelligence infrastructure for OpenAI.

Facing pushback over its large carbon footprint and water demand in a parched part of the country, in late April, Oracle and BorderPlex announced Project Jupiter will utilize fuel cells to power its operations instead of gas turbines or diesel generators. Fuel cells are devices that convert methane, the primary ingredient in natural gas, into electricity through chemical reaction with oxygen.

According to the company’s announcement, the fuel cells generate electricity without combustion, so they will significantly reduce the project’s carbon dioxide emissions and use of water. The developers also claim the cells will reduce nitrogen oxide air pollution emissions by approximately 92 percent, compared to the original gas-fired power plant proposal. However, the fuel cells still use natural gas, and so the project is still dependent on fossil fuels.

The fuel cells would emit about 10.1 million tons of greenhouse gases a year compared to about 14 million tons from the gas plants, according to the announcement. The developer also claims the facility will now “use a negligible amount of water,” without providing further details.

Colin Cox, a senior attorney at the Center for Biological Diversity, said while the fuel cell proposal is an improvement, it’s still a climate disaster.

“Ten million tons per year is more than the greenhouse gas emissions from Albuquerque, Las Cruces, and Santa Fe—New Mexico’s three biggest cities—combined,” Cox said. “That absolutely trashes our state's climate progress and makes a joke out of climate goals.”

Cox said Project Jupiter has really failed on the public transparency front.

“We get little bits of information here and there from various public filings,” he said. “When we finally found out how much of our water the first power plant was going to use, people were rightly outraged. Now they say this power plant will use less. What does that mean, and why aren't they sharing that information?”

The developers appear to have tried to underplay the fact that the two power systems  (East and West) would have required nearly one million gallons of water per day prior to the fuel cell proposal by instead focusing on how the data center cooling would require only around 20,000 gallons per day. Either way, most of New Mexico is mired in a severe drought, and the local water utility is already facing legal action for mismanagement, including failed arsenic tests. Adding the demands of the data center complex further strains the utility’s resources as well as existing water supplies.

Cox said there’s also a lot of questions around the fuel cell technology, which has never been deployed at close to the scale that’s being proposed.

“Another big question is why are they so committed to methane?” Cox said. “We have amazing solar resources here. They claim they will build some solar eventually, but the only applications they have filed so far are 100 percent fossil fuels.”

Cox said that while New Mexico's Energy Transition Act mandates increasing amounts of renewables to be used in commercial power generation, the state legislature recently created a loophole allowing the construction of independent power systems (“microgrids”) that are exempt from the renewable requirements.

“Did they know these so-called microgrids would be larger than the entire Public Service of New Mexico power grid and would generate enough to power every household in the state twice over?” Cox said. “And that's just the two for Project Jupiter.”

In her announcement last February, New Mexican Gov. Lujan Grisham said Project Jupiter would spur economic development in Southern New Mexico and grow vital infrastructure systems to support global trade along the international border.

“By securing digital infrastructure today, New Mexico is investing in its economy to build a more prosperous tomorrow,” she said.

When Doña Ana County commissioners approved an unprecedented $165 billion industrial revenue bond to help finance the mammoth data center later in the year, they’d been led to believe the microgrid would initially produce 700 to 900 megawatts of power, eventually ranging up to one gigawatt. However, by the end of the year air permits revealed that it could produce upward of 2.8 gigawatts of electricity, to be powered at least initially by natural gas.

Project Jupiter’s air quality permits received more than 7,000 comments during their public comment period, causing several state lawmakers to request a public hearing and the state to push back the final decision on the air permit applications for the gas-fired power plants. This in turn paused construction on a proposed 17-mile, $60 million gas pipeline to supply gas to power the data center, which is reliant on the air quality permits to move forward and has already been denied a permit by the New Mexico State Land Office for a route that crosses state trust lands. The company withdrew the two air permit applications for the gas plants in April and submitted an application for the fuel cell facility.

Kacey Hovden, a staff attorney with the New Mexico Environmental Law Center, said that the borderlands area around Project Jupiter has one of the most polluted airsheds in the country, with ozone concentration in the atmosphere exceeding the federal air quality standards.

“When you look at the larger picture in Southern New Mexico, and the legacy of environmental injustice and pollution, Sunland Park and Santa Teresa communities already bear the adverse health implications from extractive and polluting industries,” she said. “Project Jupiter is exactly the same, and only serves to compound the unjust harm residents are already enduring.”

She said the project’s developers are following similar patterns and strategies used by data center developers across the nation: Repackaging their exploitation in greenwashed terminology, while relying on fossil fuels and technologies that will irreparably damage the environment and harm public health.

“The developers’ decision to use fuel cells, rather than natural gas turbines, merely creates a different host of environmental issues regarding hazardous waste disposal, while also still emitting extremely high amounts of toxic air pollutants,” Hovden said. “And no matter what technology the developers claim they will use to power the massive data center campus, Project Jupiter will still need an enormous amount of water that New Mexico just does not have.”

There are around 22 data centers in New Mexico, with most of them situated in the central part of the state surrounding Albuquerque. 

Mariel Nanasi, Executive Director of the Santa Fe-based New Energy Economy, said New Mexico’s world-class solar and wind resources leave no excuse to accept a slightly cleaner fossil fuel such as fuel cells over the alternatives. 

“The business case for renewable energy couldn’t be more clear,” she said. “It insulates from commodity price volatility and supply disruptions, like Trump's war on Iran, that have repeatedly driven fossil fuel costs sharply upward.”

Nanasi said legislators need to stop treating data centers as inevitable and start regulating them as enormous industrial energy and water users. She said New Mexico should require 100 percent renewable power plus storage, proof that no costs are shifted to ratepayers, binding water protections, stringent air quality requirements that account for cumulative impacts, and oversight of large private microgrids over 20MW. 

“The burden should be on the developer to prove the project is good for New Mexicans,” said Nanasi. “Not on communities to prove they should not be sacrificed.”