The large-scale expansion of data centers in Texas is turning into an alarming environmental paradox: the construction of their own giant power plants is bypassing public oversight. Developers are exploiting regulatory loopholes, obtaining simplified permits that were originally designed for small, standard facilities, but now allow them to deploy industrial-scale capacity without public hearings.
The essence of the scheme is simple and cynical. Large pollution sources require an individual permit with a full environmental review and notification of residents. However, companies break a single project into many small applications—for individual turbines and generators. Each one goes through a simplified procedure, bypassing public discussions. Then these "pieces" are combined into a single power plant, which is nearly impossible to stop once construction begins.
Since 2024, at least 38 data centers have received permits for self-generation in this manner. More than half of them reported nitrogen oxide emissions at a level just below the threshold of 100 tons per year, beyond which mandatory public procedures begin. A classic example is the Vantage data center near San Antonio, which received a permit for 99.8 tons of emissions per year.
Stargate: A flagship project with "gray" energy
The central example of this practice is the Stargate campus in Abilene—part of the ambitious infrastructure initiative by OpenAI, SoftBank, and Oracle with stated investments of up to $500 billion. The campus covers about 445 hectares, with a 360 MW gas-fired power plant already operating nearby. In 2024, developers received simplified permits for 10 gas turbines and 62 diesel generators. According to documents, this equipment is capable of emitting over 1.6 million tons of greenhouse gases and about 1,000 tons of other pollutants annually.
A representative of developer Crusoe claims that the turbines will only be used for backup power. However, the issued permits allow for their continuous operation. A year later, the company applied for a main permit for an additional 41 turbines and 18 generators. If implemented, the power plant's capacity would be enough to power over 1 million homes, and annual pollution would be comparable to the emissions of nearly 2 million cars.
Scale of the problem: 40 GW of "gas" appetite
Texas already has about 300 data centers in operation, with another approximately 200 under development. According to Global Energy Monitor, 80.6 GW of new gas-fired power plants have been announced in the state. Nearly half of this capacity—about 40 GW—is intended for direct power supply to data centers. In terms of gas capacity under development, 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, as of mid-2026, only about 2 GW have been brought into operation. This suggests that many projects may face regulatory or economic difficulties. An investigation by Floodlight, which reviewed documents from nine gas plants, showed that their permitted emissions could exceed 130 million tons of greenhouse gases per year.
Former employees of the Texas Commission on Environmental Quality (TCEQ) describe the approach with the formula "small first, then big." The regulator, in turn, claims that it issues permits only when projects meet standards, and explains the small number of enforcement actions by a high level of compliance. However, the accumulated backlog of over 1,400 unresolved enforcement cases suggests otherwise.
My comment as an analyst: This situation is a vivid example of how technological progress outpaces the regulatory framework. The pursuit of energy autonomy for AI infrastructure is understandable, but using administrative loopholes to conceal real environmental consequences is a dangerous precedent. If Texas does not tighten oversight, we risk getting not just a "green" AI, but a real "coal footprint" of the digital era.