your ai tools run on fracked gas and bulldozed texas land

The Resurgence of Fracking Fueled by the AI Revolution

The advent of artificial intelligence is unexpectedly revitalizing the fracking industry, a development that presents a surprising turn for a sector previously criticized for its environmental impact, including concerns about contaminated water sources, induced seismicity, and the continued reliance on fossil fuels.

AI Data Centers and Energy Demand

AI companies are establishing substantial data centers in proximity to significant gas production areas, frequently generating their own power through direct access to fossil fuels. While attention has largely focused on the positive applications of AI, such as advancements in healthcare and climate change solutions, this trend could significantly alter – and raise complex issues for – the communities hosting these facilities.

A recent example highlights this shift. Poolside, an AI coding assistant startup, is constructing a data center complex spanning over 500 acres in West Texas, approximately 300 miles west of Dallas. This footprint is two-thirds the size of Central Park.

The Horizon Project and Permian Basin Resources

The facility, named Horizon, is designed to produce two gigawatts of computing power. This is equivalent to the entire electrical capacity of the Hoover Dam, but instead of utilizing the Colorado River’s power, it will rely on fracked natural gas from the Permian Basin, the nation’s leading oil and gas field where hydraulic fracturing is the predominant extraction method.

Poolside is collaborating with CoreWeave, a cloud computing firm providing access to Nvidia AI chips, with over 40,000 chips being supplied for this project. Industry observers have described the situation as an “energy Wild West,” a fitting characterization.

Industry-Wide Trend and OpenAI’s Stance

Poolside is not an isolated case; most major AI companies are adopting similar strategies. OpenAI CEO Sam Altman recently visited his company’s Stargate data center in Abilene, Texas – located roughly 200 miles from the Permian Basin – and openly acknowledged, “We’re burning gas to run this data center.”

The Stargate complex requires approximately 900 megawatts of electricity across eight buildings, including a new gas-fired power plant utilizing turbines comparable to those found on warships. While the companies state this plant serves as backup power, the majority of electricity is sourced from the local grid, which relies on a combination of natural gas and renewable energy sources like wind and solar.

Community Concerns and Environmental Impact

However, residents near these projects express unease. Arlene Mendler, who lives near Stargate, voiced her regret that her input wasn’t sought before construction began, resulting in the removal of a large area of mesquite shrubland.

“It has completely changed the way we were living,” Mendler stated, noting that she sought “peace, quiet, tranquility” when she moved to the area 33 years ago. Now, construction noise and bright lights disrupt the peaceful environment.

Water Usage and Sustainability

Water availability is a significant concern in drought-prone West Texas. Locals are apprehensive about the impact of new data centers on the water supply. During Altman’s visit, the city’s reservoirs were at roughly 50% capacity, with residents subject to a twice-weekly outdoor watering restriction.

Oracle claims each building will require only 12,000 gallons annually after an initial million-gallon fill for closed-loop cooling systems. However, Shaolei Ren, a University of California, Riverside professor specializing in AI’s environmental footprint, argues this is misleading, as these systems demand more electricity, leading to increased indirect water consumption at power plants.

Meta’s Expansion and Louisiana Project

Meta is pursuing a comparable strategy. In Richland Parish, Louisiana – the poorest region in the state – the company plans to construct a $10 billion data center spanning 1,700 football fields, requiring two gigawatts of power for computation. Entergy, the utility company, will invest $3.2 billion in three large natural-gas power plants with 2.3 gigawatts of capacity, fueled by gas extracted through fracking in the nearby Haynesville Shale.

Louisiana residents share the concerns of those in Abilene regarding constant construction activity.

Renewable Energy Initiatives and Texas Expansion

(Meta is also expanding in Texas, but in a different location. The company recently announced a $1.5 billion data center in El Paso, near the New Mexico border, with one gigawatt of capacity expected to be operational in 2028. El Paso is not near the Permian Basin, and Meta states the facility will be powered by 100% clean and renewable energy, a positive development.)

xAI and Natural Gas Supply Chains

Even Elon Musk’s xAI, whose Memphis facility has faced controversy, has ties to fracking. Memphis Light, Gas and Water – the current power provider for xAI and future owner of the substations xAI is building – purchases natural gas on the spot market, supplied by Texas Gas Transmission Corp. and Trunkline Gas Company.

Texas Gas Transmission operates a bidirectional pipeline transporting natural gas from Gulf Coast supply areas and hydraulically fractured shale formations through multiple states. Trunkline Gas Company also carries natural gas from fracked sources.

Geopolitical Considerations and Competition with China

AI companies justify this approach by emphasizing the need to compete with China. Chris Lehane, OpenAI’s vice president of global affairs, argued that the U.S. will require approximately one gigawatt of energy per week in the near future.

He highlighted China’s substantial energy buildout, including 450 gigawatts and 33 nuclear facilities constructed in the past year.

Re-Industrialization and Government Support

Lehane asserted that investing in these projects could re-industrialize the country, bring manufacturing back, and modernize energy systems. The Trump administration supports this direction, with a July 2025 executive order expediting permits and offering incentives for gas-powered AI data centers, while excluding renewables from support.

Public Awareness and the Carbon Footprint

Currently, most AI users are unaware of the carbon footprint associated with these technologies, focusing instead on their capabilities, such as OpenAI’s Sora 2, which demands significantly more energy than a simple chatbot.

Companies are banking on this lack of awareness, positioning natural gas as the pragmatic solution to AI’s growing energy needs. However, the rapid expansion of fossil fuel infrastructure warrants greater scrutiny.

Potential Risks and Systemic Dependencies

If this proves to be a speculative bubble, the consequences could be severe. The AI sector has become a complex network of dependencies: OpenAI relies on Microsoft, which relies on Nvidia, Broadcom, and Oracle, all of which depend on data center operators who, in turn, rely on OpenAI. This self-reinforcing loop could lead to significant losses if the foundation falters.

OpenAI’s ability to meet its obligations is “increasingly a concern for the wider economy,” according to financial analysts.

Potential for Efficiency and Alternative Solutions

A Duke University study suggests that utilities typically utilize only 53% of their available capacity annually, indicating potential to accommodate new demand without constructing new power plants. Reducing electricity consumption by data centers during peak demand periods could accommodate an additional 76 gigawatts of load, effectively meeting projected needs through 2029.

This flexibility could accelerate AI data center deployment and provide a respite from the rush to build natural gas infrastructure, allowing time for the development of cleaner alternatives.

Long-Term Implications and Financial Burdens

However, prioritizing competition with autocratic regimes, as advocated by Lehane and others, may lead to regions being burdened with more fossil fuel plants and residents facing higher electricity bills to finance these investments, even after the tech companies’ contracts expire.

Meta, for example, has a 15-year agreement to cover Entergy’s costs for the new Louisiana generation. Poolside’s lease with CoreWeave also spans 15 years. The long-term financial implications for customers remain uncertain.

Future Prospects and Investment in Clean Energy

The situation may evolve. Significant private investment is flowing into small modular reactors and solar installations, with expectations that these cleaner energy sources will become more prominent for data centers. Fusion startups have also attracted substantial funding from AI leaders.

This optimism extends to public markets, where several “non-revenue-generating” energy companies have gone public with high market valuations based on their potential to fuel these data centers.

The Unasked Question and Environmental Justice

Ultimately, the most pressing concern is that those who will bear the financial and environmental consequences were not consulted about these developments.