New Mexico’s data center frenzy

Wall Street is bullish about Artificial Intelligence (AI). And, while the author perhaps watched Terminator 2 too many times and is skeptical about humanity’s desire to press forward with AI, this post is about the rising industry’s economic impact on New Mexico While there are certainly some concerns about aspects of these projects, MLG’s new Economic Development Secretary Rob Black has definitely ramped up the Administration’s efforts to bring in businesses.

Project Jupiter: Backed by Oracle Project Jupiter is a $165 BILLION investment in southern New Mexico. It will also require construction of a 1 gigawatt natural gas plant JUST for the facility.

Project Zenith: This data center amounts to a $11.7 billion in capital investment in Roswell. It will also require massive amounts of electricity ($1.3 gigawatts) although the plan includes some combination of batteries, solar, and natural gas generators along with geothermal cooling systems.

New Era Energy & Digital, Inc.: This facility will require up to 7 gigawatts (GW) in total, with an initial 2 GW of natural gas generation and a planned 5+ GW of nuclear power. Initial power delivery is expected in 2028.

All of this new power, much of which is from traditional sources, will be “off grid” and tied to the facility. It is impossible to imagine any scenario in which these facilities operate solely on wind, solar, and even battery. It is interesting that MLG is pushing so hard to bring these facilities here when they highlight the fact that the ETA is truly unworkable.

A great deal of water is necessary for Project Jupiter and this kind of facility in general. Ideally that would include the use of “Produced Water” as has been discussed.

We don’t love the generous subsidies handed to these projects either. Industrial Revenue Bonds and numerous other tax incentives and other inducements seem unnecessary when New Mexico brings geological stability and lack of tornadoes and hurricanes to the mix (in addition to the self-contained electricity source which skirt the States Energy Transition Act).

Overall, these are solid economic developments. Rod Black seems to have finally jumpstarted economic development efforts during this Administration as MLG’s time in office wanes.