Amid a growing backlash to the factory-sized data centers that power the global internet, Republican Gov. Mike Dunleavy has started pitching his state as a new home for the industry — citing Alaska’s cool temperatures and abundant land and water.
In the past few weeks, Dunleavy has formally invited more than a dozen tech businesses to build “data farms” in Alaska, including affiliates of Microsoft, Facebook and Amazon. He also personally accompanied executives from a major data firm, Las Vegas-based Switch, on driving tours of potential sites in the Fairbanks and Anchorage areas.
In an interview, Dunleavy described Alaska as having an abundance of the natural resources that data firms are increasingly under fire for consuming in the Lower 48.
He also said that demand for electricity from new data centers would strengthen the economic case to build a multibillion-dollar natural gas pipeline to urban Alaska from the North Slope oil fields — a project long sought by the state that’s so far been thwarted by insufficient demand.
“We just need an anchor tenant or so, and that’s it,” Dunleavy said.
Companies have eyed Alaska as a site for data centers for more than two decades, dating back to 2001, when a firm called Netricity was studying a project on the North Slope.
Dunleavy’s new push comes as the industry — and its sharply increasing use of power and water — faces growing skepticism across the rest of the country, where some 5,000 facilities have been built.
Forecasts say the growth of artificial intelligence will supercharge demand. One executive has warned that without more efficient operations, data facilities supporting AI could use up to 25% of power in the U.S. by 2030 — more than six times what they use now.
Texas Republican Lt. Gov. Dan Patrick recently said that the industry produces few jobs relative to the “incredible demands” it places on the power grid. “Texans will ultimately pay the price,” he added.
Residents in Northern Virginia are suing to block one complex, saying data centers are driving up the price of land. Atlanta’’s city government last month banned the facilities in certain areas, citing the potential for them to crowd out housing and pedestrian access.
Dunleavy said Alaska doesn’t face the resource scarcity driving some of the opposition, and that its cold temperatures would reduce the need for cooling.
“We have more available fresh water than just about every other state,” he said. “We have copious amounts of land.”
What the state doesn’t currently have, he added, is extra power.
Alaska’s urban electric utilities currently face an impending shortage of the natural gas they use to generate most of their power — but they also don’t collectively consume enough fuel to attract investors in the proposed gas line.
Data centers would boost consumption, Dunleavy said. They could also tap into Alaska’s significant potential to generate electricity from renewable sources like wind and water, Dunleavy added, as tech businesses are increasingly trying to power their data hubs with green energy.
Microsoft, for example, has pledged to be carbon negative by 2030; it’s working with another company to revive the shuttered Three Mile Island nuclear power plant in Pennsylvania to power its AI and cloud computing centers.
Dunleavy is an enthusiastic user of artificial intelligence technology — he’s been known to pull out his phone during meetings to interrogate ChatGPT, the chatbot developed by OpenAI.
His bid to boost the data industry in Alaska prompted mixed reactions among those tracking the Alaska energy and technology industries.
A representative of the Alaska Public Interest Research Group, a nonprofit that advocates for equitable, affordable, and reliable energy in the state, said the group “welcomes industry in Alaska that does not cause harm.”
But she also suggested that data centers in Alaska would not be enough to make the proposed gas pipeline pencil out.
“Courting new industry to legitimize economically unjustifiable energy projects is a misuse of public time and money that distracts from viable energy solutions,” Natalie Kiley-Bergen, the group’s energy lead, said in an email.
Another energy expert, Antony Scott, said he thinks the most logical concept for industry is to build data centers adjacent to the North Slope oil fields. There, they could tap into abundant natural gas without the need for a pipeline to urban Alaska that would run hundreds of miles and cost billions of dollars.
Carbon emitted from the power plants running North Slope data centers could potentially be deposited back into depleted pockets of the oil fields. That could in turn capture federal tax incentives, said Scott, who spent more than a decade working for the state trying to secure gas contracts to support construction of the pipeline.
“It’s the only sensible location. I actually think it’s a pretty good idea,” said Scott, now an analyst with Renewable Energy Alaska Project, another advocacy group. “Not a lot of downside if someone else will put up the money for the new generators needed to run the server farms and the new carbon capture technology — which is not a small lift.”
Dunleavy said he’d like to see data centers developed in both urban Alaska and on the North Slope, with the urban locations supporting jobs and potentially adding students to the state’s shrinking school system. “What we’re hearing is that depending on the outfit, it will vary,” he said.
One obstacle in both areas is ensuring reliable connections to the rest of the world, said Ethan Berkowitz, a former Anchorage mayor. He’s now working with a company, Far North Fiber, that hopes to build a subsea cable linking Europe to Japan while passing along the Alaska coast.
But otherwise, the concept makes sense for Alaska’s economy, he added.
“This would put us on the cutting edge again,” he said.
Nathaniel Herz welcomes tips at natherz@gmail.com or (907) 793-0312. This article was originally published in Northern Journal, a newsletter from Herz. Subscribe at this link.
