The truth about California data centers — and what doomers won’t tell you

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Throughout California’s Bay Area, cities are haphazardly enacting short-term bans on the development of data centers to placate a sudden wave of public opposition on the left and the right.

On Oct. 6, San Francisco unanimously approved a 45-day ban. On Oct. 7, Oakland did exactly the same.

More cities will fall, like dominoes, because the panic over data centers is metastasizing.

The movement to stop data centers is perhaps understood as the ultimate NIMBY (“Not In My Back Yard”) cause. Politically, it is best defined as those who oppose data centers in their local area, which includes nearly 70% of Americans, according to Gallup.

Keep in mind, this is a very diverse cohort that opposes data centers for many different reasons.

Some are convinced AI will bring about the demise of the economy, and perhaps civilization itself.

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Others incorporate their opposition to AI into their existing suspicion of the tech elite.

As one Oakland resident put it, “We do not control this technology. I think it is a big mistake for us to gamble with the future of our city and trust that the oligarchs have a place for us in their vision at all.”

That is mighty cynical. But it confirms and reinforces the fact that some Americans are genuinely skeptical that AI will make them better off in the end.

Others who oppose data centers in their local area do so because they are concerned that the new developments will raise their utility costs.

They believe data centers raise electricity rates because they spike demand.

It’s not clear that data centers use more resources than other industrial facilities. But even if they do, electricity supply could be increased, and costs lowered, if states like California embraced abundant, affordable, and reliable energy sources like fossil fuels.

Californians currently pay more than double the national average for electricity, not due to scarcity but because of green energy mandates that have throttled supply.

It is understandable that Bay Area residents are concerned about rising electricity rates and more blackouts.

However, the source of the problem is California’s decades of restrictive laws, executive actions, and discriminatory litigation intended to cripple fossil fuel use while subsidizing the green transition to hide its true cost.

Anger and anxiety over outrageous electricity bills are being conflated with data centers, which are essentially energy customers and likewise seek affordable, reliable, and abundant energy.

Then, of course, there is the so-called “water” problem. Americans have been conditioned into believing that all data centers consume ginormous amounts of water.

Guess what? Technological advancements in cooling systems have generally solved the water use problem.

What also goes nearly unreported is that data centers pay very high taxes. Those taxes, to the tune of billions per year in some municipalities, are a revenue windfall that can be used to slash property taxes, build new schools, repair roads, and so much more.

Data centers can be used to revitalize towns, cities and suburbs that desire economic development and the revenue rewards that follow.

Given that so many Bay Area cities are staring at large budget deficits as their tax bases have steadily declined, one wonders why public officials are not even trying to flip the script.

Perhaps they are worried about political consequences. In today’s political environment, coming across as even mildly curious about data centers is considered a sin.

Eventually, the short-term bans will expire. Like a Band-Aid, they are just a temporary solution.

Sooner or later, public officials will have to summon the courage to defend data centers because the obvious, concrete benefits of economic development will far outweigh the madness of the moment.

I just hope it is sooner rather than later.

Chris Talgo is editorial director at The Heartland Institute.