A troubling trend is unfolding in Texas: data center developers are actively using simplified permitting procedures to build their own power plants, bypassing public hearings and environmental oversight. This practice essentially allows large projects to slip under the radar of the public and regulators.
The standard procedure for major sources of pollution requires an individual permit with mandatory environmental review and notification of local residents. However, the simplified scheme, originally designed for standard and relatively small facilities, allows for the approval of individual turbines and generators much faster and without public discussion. Companies are now exploiting this loophole to submit applications for expanding facilities already under construction, which become nearly impossible to stop once construction begins.
Since 2024, at least 38 data centers have received permits for their own power generation under this expedited procedure. Analysis shows that more than half of these projects reported nitrogen oxide emissions just slightly below the 100-ton-per-year threshold that triggers mandatory public procedures. For example, the Vantage data center near San Antonio received a permit for 99.8 tons of emissions per year — exactly 0.2 tons below the critical mark.
The "small first, then big" strategy
Former employees of the Texas Commission on Environmental Quality (TCEQ) describe this approach as a "small first, then big" formula. Companies deliberately break a single large-scale project into several small applications, and then, after obtaining permits, combine the installations into a full-fledged industrial power plant. Bruce Buckheit, a former director of air enforcement at the EPA, stated outright that this practice may contradict requirements to consider interconnected parts of a project as a whole.
Stargate: a flagship example of bypassing regulations
The central case in this investigation is the giant Stargate data center in Abilene, part of the infrastructure initiative by OpenAI, SoftBank, and Oracle with announced investments of up to $500 billion. The campus, covering approximately 445 hectares, already has a 360 MW gas-fired power plant nearby. In 2024, developers obtained simplified permits for 10 gas turbines and 62 backup diesel generators, which could emit over 1.6 million tons of greenhouse gases and about 1,000 tons of other pollutants annually. A representative of developer Crusoe claims the turbines will only be used for backup power, but the current permits allow for their continuous operation.
A year later, developers applied for a main permit for 41 additional turbines and 18 generators. If realized, the power plant's capacity would be sufficient to power 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
Texas already has about 300 data centers in operation, 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, of which nearly half (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. Analytics firm Cleanview identified 59 data centers in the U.S. with plans to build their own power plants totaling about 90 GW, but as of mid-2026, only about 2 GW had been brought online — indicating a significant gap between plans and execution.
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, although actual emissions are typically lower than maximum permitted levels. The TCEQ regulator, for its part, claims it only issues permits when projects meet all standards but did not respond to specific questions about the investigation's findings.
My professional commentary: This situation is a classic example of technological progress outpacing the regulatory framework. The drive for rapid deployment of AI infrastructure should not come at the expense of environmental safety and transparency. Market players must consider long-term consequences, and regulators urgently need to close such legal loopholes to avoid an environmental catastrophe on a state scale.