The largest players in the Texas data center market have found a loophole that allows them to build their own power plants while avoiding public environmental oversight. According to my analysis of investigative data, developers are actively using simplified permitting procedures, originally intended for small and standard emission sources, to bypass mandatory hearings and inspections.
Since 2024, at least 38 data centers have received permits for their own power generation under this simplified scheme. More than half of them deliberately underreport their stated nitrogen oxide emissions, keeping them just below the 100-ton-per-year threshold that triggers public procedures. For example, the Vantage facility near San Antonio received approval for 99.8 tons — literally on the edge of the limit.
The "small steps" strategy toward giant capacities
Former employees of the Texas Commission on Environmental Quality (TCEQ) directly describe this tactic with the formula "first small, then big." Companies break a single megaproject into dozens of small applications, obtain simplified permits for each, and then combine the equipment into an industrial power plant. As former EPA enforcement division head Bruce Buckheit rightly noted, "all of this should have been combined into a single permit." In my view, this practice directly contradicts the principle of cumulative assessment of interconnected facilities.
A central example is the Stargate data center in Abilene, part of the infrastructure project 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. According to documents, this equipment is capable of emitting over 1.6 million tons of greenhouse gases annually. A Crusoe representative claims the turbines are only backup, but the current permits allow for their continuous operation. Within a year, an application was submitted for a primary permit for an additional 41 turbines and 18 generators. If implemented, this power plant's capacity would be sufficient to power over 1 million homes, and its annual pollution would be comparable to the emissions of nearly 2 million cars.
Scale of the threat: 40 GW and 130 million tons
Texas already has about 300 operating data centers, with another 200 under development. According to Global Energy Monitor, 80.6 GW of new gas-fired power plants have been announced in the state, with nearly half — 40 GW — specifically intended for direct power supply to data centers. By this measure, Texas trails only China in developing gas-fired capacity. Cleanview analysts identified 59 data centers in the U.S. with plans to build their own power plants totaling about 90 GW of capacity, yet only 2 GW have been brought online.
My attention was drawn to Floodlight data: reviewed documents from nine gas plants associated with data centers show that their permitted emissions could exceed 130 million tons of greenhouse gases per year. The TCEQ regulator, which has over 1,400 unresolved cases, provides no clear answers to specific questions. The situation is compounded by the fact that the development of AI and electric vehicles has already led to a colossal surge in electricity demand that power systems cannot handle.
My conclusion: The Texas case is a classic example of how the drive to scale AI infrastructure jeopardizes environmental safety. While regulators turn a blind eye to obvious tricks, we risk not just an energy crisis but an environmental disaster on the scale of an entire state.