Oracle Abandons Controversial Natural Gas Plant for AI Data Center After Regulatory Rejection

America’s aging energy grid is struggling to meet the surging power demands of AI data centers, prompting tech giants to seek private energy solutions. This shift has led to environmental and public health concerns, as seen with Elon Musk’s xAI facility in Memphis, where portable methane generators have sparked a clean air lawsuit from the NAACP.

Now, Oracle, led by billionaire Larry Ellison, has abandoned plans for a major natural gas plant intended to power its Project Jupiter data center in New Mexico. According to Business Insider, the cancellation follows rejections from both the Federal Energy Regulatory Commission and the New Mexico State Land Office, which denied Oracle’s requests to construct a new natural gas pipeline to supply the facility.

Instead, Oracle will partner with Bloom Energy, a company specializing in solid oxide fuel cells. These cells convert chemical energy directly into electricity without combustion, theoretically reducing emissions compared to traditional natural gas plants.

Previously, Project Jupiter’s estimated greenhouse gas emissions were projected to exceed 14 million tons per year—more than the combined emissions of Albuquerque and Las Cruces. While the shift to fuel cells is expected to cut pollution by 30%, reducing emissions to around 10 million tons annually, critics remain skeptical.

“I don’t know that this is the clean energy solution that they’re saying it’s going to be.”

— Kacey Hovden, Staff Attorney, New Mexico Environmental Law Center

The environmental impact of AI data centers continues to draw scrutiny. As one analyst noted, these facilities may be likened to cigarettes: while filters can reduce harm, no data center is entirely free of environmental consequences.

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For more on the challenges facing data centers, read: Almost Half of US Data Centers Planned for 2024 Face Delays or Cancellations.