Texas, which has become one of the main hubs for data centers in the U.S., is at the center of a scandal involving widespread circumvention of environmental regulations. My investigation shows that developers are actively exploiting loopholes in the law to avoid public hearings and accelerate the commissioning of their own power plants. This calls into question not only the region's environmental safety but also the principles of regulatory transparency.
The key tool is a simplified permitting process originally intended for small emission sources, such as individual turbines or generators. Today, however, companies are filing applications to expand facilities already under construction, breaking large projects into numerous small ones. Stopping such a process after construction has begun is nearly impossible.
Threshold Games and "Start Small, Then Go Big"
My analysis of documents has revealed a troubling trend: since 2024, at least 38 data centers have received approval for their own power generation under the simplified scheme. More than half of these projects reported nitrogen oxide emissions just below the 100-ton-per-year threshold, above which public procedures are mandatory. For example, the Vantage data center near San Antonio "coincidentally" landed at 99.8 tons.
Former employees of the Texas Commission on Environmental Quality (TCEQ) describe this practice with the formula "start small, then go big." A project is split into several applications and then combined into an industrial power plant. According to Bruce Buckheit, a former head of the EPA's enforcement division, this approach contradicts requirements to consider interconnected parts of a project as a whole.
Stargate: A Flagship Project Under Scrutiny
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 obtained simplified permits for 10 gas turbines and 62 diesel generators. According to documents, this equipment could emit over 1.6 million tons of greenhouse gases and about 1,000 tons of other pollutants annually.
A representative of Crusoe, the company developing the campus, claims the turbines will only be used for backup power. However, the current permits allow for their continuous operation. A year later, developers filed an application for a main permit for an additional 41 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.
Scale of the Problem: 40 GW of Gas Capacity
About 300 data centers are already operating in Texas, with roughly another 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 which (about 40 GW) is intended for direct power supply to data centers. This places Texas second in the world in terms of gas capacity under development, behind only China.
The analytical firm 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 into operation. This suggests that many projects may remain on paper.
Regulator Response and Outlook
Former TCEQ employee Katherine Guerra claims the agency has accumulated over 1,400 unresolved enforcement cases, with only 39 completed in the previous year. A TCEQ representative disputed this figure, stating that over 100,000 inspections were conducted in 2025 and that compliance levels are high. The regulator insists it issues permits only when federal and regional standards are met but did not respond to specific questions about the investigation's findings.
My expert conclusion: The situation in Texas is a classic example of the conflict between rapid technological development and an outdated regulatory framework. As regulators turn a blind eye to "technical" violations and companies exploit loopholes, we risk not just an environmental crisis but a systemic failure in the energy grid, which analysts are already predicting. The question is not how to speed up data center construction, but how to make it sustainable and transparent for the public.