What’s Up With Mr. Wonderful’s Utah Data Center?

Earlier this month, Republican county commissioners fast-tracked approval for a 40,000-acre data center in northwest Utah, blocking public comment from hundreds of furious locals. The Stratos project, as the venture is known, is backed by Shark Tank entrepreneur Kevin O’Leary through his investment company O’Leary Digital. It’s designed to reach a 9-gigawatt power capacity, making it one of the largest “hyperscale” data centers in the world; at its projected $100 billion buildout, the center would generate and consume twice as much power as the entire state of Utah currently uses.

Despite a massive public outcry, Box Elder County commissioners unanimously approved the project after facing a contentious crowd in a May 4 meeting at the county fairgrounds. Commissioner Boyd Bingham threatened to have protestors removed by law enforcement, telling them, “For hell’s sake, grow up.” He and his fellow commissioners then left the room and finished the meeting in a closed session, livestreaming their final unanimous vote of 3-0. O’Leary, who did not attend the meeting, claimed on social media that the protestors were “professional… paid, and bused in.” Environmental advocate and former U.S. Senate candidate Caroline Gleich fired back, saying, “Utahns don’t want an out-of-state billionaire controlling our land.”

The controversy around data centers in the U.S. continues to grow; 67 percent of new data center construction is planned for rural areas, according to a recent Pew Research Center report. Last year, Rolling Stone reported on Amazon data centers in Eastern Oregon that siphoned tens of millions of gallons of water from state aquifers, worsening a water pollution problem linked to cancer and miscarriages. A $20.5 million class-action settlement agreement reached between Amazon and a group of Oregon residents in March marked the first time a Big Tech company committed to paying damages for public health threats allegedly exacerbated by its data centers.

Senator Bernie Sanders recently introduced a bill aimed at putting a federal moratorium on data center construction. “We cannot sit back and allow a handful of billionaire Big Tech oligarchs to make decisions that will reshape our economy, our democracy and the future of humanity,” Sanders previously said in a statement to Rolling Stone. “We need serious public debate and democratic oversight over this enormously consequential issue.”

Environmental fears, ancestral lands

Utah is facing a critical water shortage driven by the warmest winter in over a century, with snowpack levels at the lowest ever recorded. Scientists say that heat and emissions generated by a colossal data center like the Stratos project would wreak havoc on an area already severely impacted by climate change. There’s concern that the amount of water needed to cool Stratos facilities could further drain the Great Salt Lake, intensifying exposure to toxic sediments in the rapidly shrinking watershed. Wildlife biologists say the heat generated by the center could also disrupt the movement of migratory birds, deer, and antelope.

Patrick Belmont, professor of watershed sciences at Utah State University, says there are serious technical concerns with building a data center of this scale: “It’s like putting a hairdryer that has the energy consumption of New York City in the middle of a fragile desert ecosystem on the shores of one of the most imperiled lakes in the world.” Belmont says the facility would generate enough heat to raise nighttime temperatures by eight to 12 degrees, irrevocably shifting the dew point, the temperature at which water condenses. “It would desiccate the land, and increase evaporation rates in the whole region,” Belmont says, warning that it could affect the landscape and surrounding communities for generations to come. (Belmont’s views are his own, and do not necessarily reflect those of his employer.​

Carbon emissions from the data center would also have a significant environmental impact, with an estimated output of 30 million tons of CO2 per year exceeding emissions from Utah’s entire transportation sector. “It’s 50 percent more than every vehicle in Utah currently,” Belmont says. “I think a lot of people haven’t wrapped their heads around that.”

O’Leary, known as Mr. Wonderful on the ABC reality show Shark Tank, cites the environmental studies degree he received from the University of Waterloo in 1977 when dismissing concerns about the Stratos project, also known as “Wonder Valley.” (He’s also backing a controversial $70 million data center development under the Wonder Valley name in Alberta, Canada.) O’Leary, who is from Canada, tells Rolling Stone that water cooling won’t be an issue at the Utah facility. “There’s plenty of turbine technology now that uses air cooling, very, very efficiently,” he says, “and there are many examples across the country where they’re building out power from a combination of wind, battery, solar, and natural gas.”

But Stratos wasn’t designed to use a combination of energy sources; as a state official remarked at an April 22 meeting of the Box Elder County Commission, the project will be powered 100 percent off the Ruby Pipeline, a natural gas line that crosses northern Utah from Wyoming en route to Oregon. MIDA Executive Director Paul Morris told the meeting that proximity to the pipeline was the main reason O’Leary selected the site. MIDA spokesperson Kristin Kenney Williams said in a statement to Rolling Stone that “exploring any and all energy sources as Mr. O’Leary highlighted is absolutely a goal throughout the lifetime of the project and as technology advances.”

Robert Davies, a physics professor at Utah State University, estimates that, due to the inefficiency of natural gas, the facility would actually consume closer to 16 gigawatts at full capacity, an equivalent to “the energy footprint of 40,000 Walmart supercenters.” He noted that his results derive from a preliminary analysis, which “clearly indicate a full-scale analysis is warranted.”

Darren Parry is a former chairman of the Shoshone Nation, a Native American tribe that has inhabited the Great Plains for over 10,000 years. He recently visited the site in northwest Utah’s Hansel Valley, where, he says, “there are burial grounds about a quarter-mile away from the proposed map — close enough to be within the footprint of the ecological area [of the site].” Parry, who teaches Native American history at Utah State University, is calling for a responsible slowdown of the Stratos project. “There are too many unanswered questions,” he says, “especially if we’re going to have a footprint of something that’s bigger than two cities.” (A note on the Shoshone Nation website says Parry’s comments regarding Stratos “do not represent the official voice or position” of the tribe.)

Regulation runaround?

The Box Elder County commissioners’ May 4 vote gave Utah’s Military Installation Development Authority (MIDA) the green light to create the project area for the Stratos data center on unincorporated land. According to a plan released by MIDA officials, the area comprises 40,000 acres of privately-owned land and 1,200 acres of military and state-owned land — over 62 square miles in total.

Activists have raised questions about a taxpayer-funded state agency championing privately owned facilities in Utah. MIDA was created in 2007, ostensibly to strengthen national defense missions and support military initiatives, but in recent years, the group has backed a range of developments, including a luxury ski resort and a hotel. Project areas under MIDA oversight can offer a variety of incentivizing tax breaks and financing deals to developers. 

The group approved a series of resolutions to move O’Leary’s project forward last month, agreeing to charge lower taxes in a bid to help “lure the hyperscalers” to Utah. O’Leary appeared via video at the meeting, where, according to The Salt Lake Tribune, he lauded the speed at which MIDA officials had moved to greenlight the venture, telling them, “I heard about this opportunity just five months ago. No one has pulled this off this fast, ever.” Speaking on behalf of MIDA, Williams told Rolling Stone that while the “competitive nature” of the project meant that the group needed to move fast to create the project area, “per state regulation, environmental studies and approvals must be achieved — these will take time, and will be very transparent.” 

MIDA officials say the Stratos project is a matter of national security; Utah Gov. Spencer Cox defended building data center facilities at an April news conference, saying the state has an obligation to allow the U.S. to stay competitive as a world power. “We have to do this,” Cox said. “We can’t just say ‘no’ and shut the doors and go home and let China win this, this technology race.”

Environmental advocate Caroline Gleich says MIDA’s backing is simply a way to fast-track building the data center without environmental review. “This is one of the largest developments in northern Utah since the transcontinental railroad,” Gleich says. “People are concerned about its potential impacts and the lack of transparency in the approval process.” She spearheaded an online petition to stop the transfer of water rights from ranching to the Stratos project; following a deluge of nearly 4,000 formal protests filed with Utah’s Division of Water Rights, the application was withdrawn. Developers say that they intend to apply again at a later date. “Utah residents spent almost $60,000 filing these protests,” a frustrated Gleich says. “It costs $15 to lodge a complaint. There’s no refund — and no law that says [the developers] can’t just apply and withdraw as many times as they want.”

Gov. Cox’s calls for Utah residents to “pray for rain” to relieve the state from drought are especially galling to Gleich since the Stratos project is projected to require 16.6 billion gallons of water every year — the equivalent of 25,000 Olympic-size swimming pools. “It’s a hard pill to swallow when people are not watering their lawns, taking baths, or having gardens,” Gleich says.

AI-fueled opposition?

After news of the Stratos data center made headlines, O’Leary went on the offensive, claiming the criticism of his project was the result of foreign interference. “The Chinese are hell-bent on shutting down every attempt to enhance [U.S.] computing power,” he tells Rolling Stone. “I don’t believe that the majority of the people that live in Box Elder — the ranchers and the people on the land — are against this project.”  O’Leary accused China of paying protesters and riling up environmentalists on The Tucker Carlson Show, saying that they want to shut down “every single proposal” for U.S. data centers. In a Fox News appearance on May 12, O’Leary accused Gabi Finlayson, a founding partner of the Utah political consulting firm Elevate Strategies, of being a proxy for the Chinese government. Finlayson issued a sardonic reply, saying, “If we were Chinese operatives, we would be the worst operatives in the entire world. Someone alert Beijing that the payment portal to [our] Amex bills is somehow broken.”

Shoshone leader Darren Parry also dismisses O’Leary’s claims that online protestors are being paid, or that out-of-state residents were somehow summoned to oppose the county commission meeting. “People are awake now,” Parry says. “They’re tired of business as usual. They want their values reflected. What makes Utah so beautiful is the environment that we live in; let’s not destroy it.”