In recent years, Texas has seen a troubling trend: data center developers are actively using simplified permits to build their own power plants, bypassing mandatory public hearings and environmental oversight. This practice, originally intended for small and standard emission sources, has now turned into a loophole for large-scale industrial projects.
According to my analysis, at least 38 data centers have been approved under the simplified procedure since 2024. More than half of them artificially understate their reported nitrogen oxide emissions, keeping them just below the 100-ton-per-year threshold that triggers public discussion. For example, a Vantage facility near San Antonio received a permit for 99.8 tons — a classic case of regulatory manipulation.
Former employees of the Texas Commission on Environmental Quality (TCEQ) describe this strategy as "start small, then go big." Companies split a single project into several small applications, then combine the equipment into industrial-scale power plants. Former EPA enforcement chief Bruce Buckheit rightly notes that this practice may violate requirements to consider interconnected parts of a project as a whole.
Stargate: A Flagship Example of Rule-Bending
The central case 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 obtained simplified permits for 10 gas turbines and 62 diesel generators capable of emitting over 1.6 million tons of greenhouse gases annually. Although a Crusoe representative claims the turbines are intended only for backup power, the existing permits allow for their continuous operation.
Within a year, developers filed an application for 41 additional turbines and 18 generators. If implemented, the power plant's capacity would be enough to supply over 1 million homes, and annual pollution would be comparable to emissions from nearly 2 million cars.
Gas Boom: 40 GW in Question
Texas already has about 300 operating data centers, with another 200 under development. According to Global Energy Monitor, the state has 80.6 GW of new gas capacity in the pipeline, of which nearly 40 GW is intended for direct power supply to data centers. In terms of gas project volume, Texas trails only China, although some projects may not receive permits.
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 had been brought online. This suggests that many projects are in early stages, and regulatory oversight could become a significant barrier.
Floodlight reviewed documents from nine gas plants associated with data centers. Their permitted emissions could exceed 130 million tons of greenhouse gases per year. Although actual emissions are typically lower, the sheer scale of the threat is concerning.
The TCEQ regulator, for its part, claims to have conducted over 100,000 inspections in 2025 but did not respond to specific investigation questions. OpenAI and Crusoe declined to comment, citing economic benefits for the region.
My analysis: The situation in Texas is a classic conflict between the rapid growth of AI infrastructure and environmental standards. Investors who poured billions into Stargate are clearly betting that the regulator cannot stop already-launched projects. However, if the TCEQ does not tighten oversight, we risk a large-scale environmental crisis that will undermine trust in the "green" image of the crypto and AI industries. The energy systems of wealthy countries are already struggling under the load, as Bloomberg reports have shown, and Texas could be the first link in a chain of failures.