The data center market in Texas is experiencing a boom, but its dark side is the systematic use of simplified permits to build private power plants without mandatory public hearings. My analysis of data from the Floodlight investigation confirms a troubling trend: developers are deliberately breaking large energy projects into smaller pieces to avoid strict environmental oversight.
Since 2024, at least 38 facilities have received permits for on-site generation under the simplified procedure. More than half of them reported nitrogen oxide emissions just below the critical threshold of 100 tons per year. For example, the Vantage data center near San Antonio legally emits 99.8 tons — on the edge, but formally within the law.
The "small first, big later" strategy
Former employees of the Texas Commission on Environmental Quality (TCEQ) directly describe this tactic: companies apply for permits for individual turbines and generators, then combine them into industrial power plants. According to experts, this approach may violate requirements to consider interconnected parts of a project as a whole.
A central example is the Stargate data center in Abilene, part of the infrastructure initiative by OpenAI, SoftBank, and Oracle with announced investments of up to $500 billion. In 2024, developers received simplified permits for 10 gas turbines and 62 diesel generators. The equipment is capable of emitting over 1.6 million tons of greenhouse gases and about 1,000 tons of other pollutants per year. A representative of Crusoe, the campus developer, claims the turbines will only be used for backup power, but the current permits allow for their continuous operation.
Scale of the problem: 40 GW and growing risks
Approximately 300 data centers are already operating in Texas, with another 200 in development. According to Global Energy Monitor, 80.6 GW of new gas capacity has been announced in the state, of which nearly half — 40 GW — is intended for direct power supply to data centers. In terms of gas project volume, Texas is second only to China.
Analysts at Cleanview identified 59 data centers in the U.S. with plans to build their own power plants with a total capacity of about 90 GW. However, by mid-2026, only about 2 GW had been brought into operation — indicating a significant gap between ambitions and implementation.
Floodlight reviewed documents for nine gas plants associated with data centers in Texas. Their permitted emissions could exceed 130 million tons of greenhouse gases per year. For comparison, the potential pollution from the Stargate expansion is comparable to the emissions of nearly 2 million cars.
Regulator response and hidden risks
Former TCEQ employee Katherine Guerra notes that the agency has accumulated over 1,400 unresolved enforcement cases, while only 39 were completed in the previous year. A TCEQ representative disputes these figures, citing 100,000 inspections in 2025, but attributes the small number of enforcement actions to a high level of compliance.
In my view, this situation is a classic example of regulatory arbitrage, where tech giants exploit loopholes in legislation to minimize costs. The development of AI and electric vehicles has already led to an overload of U.S. power systems, and Texas risks becoming the epicenter of an environmental crisis. If the trend continues, we will see not only an increase in emissions but also the destabilization of local communities, which are deprived of a voice in decision-making.