TUCSON – Wow, the week of July 20 was quite a week for Tucson and the nation. Central planners, mercantilists and crony capitalists were as excited about the building of data centers needed to power artificial intelligence as termites were excited about the building of wood-frame houses in Tucson.
Here in this parched desert metropolis of nearly 1.1 million people and zillions of termites, new data centers are being contemplated that will consume huge amounts of water and electricity.
A Democrat political monopoly has controlled the city of Tucson and the surrounding Pima County for decades. The leaders of the monopoly have suddenly abandoned their doctrinaire belief in global warming and green energy in order to embrace very un-green data centers.
In negotiating with developers of the data centers, county officials had signed a non-disclosure agreement, pledging that they wouldn’t reveal the name of the company on whose behalf the developers were working. It was later revealed by accident that the company is Amazon Web Services (AWS).
Citizens don’t like their government to engage in secret deals, especially when there is a high likelihood that the result will be skyrocketing costs for water and electricity. That’s doubly so in a left-leaning city that isn’t keen on capitalism to begin with, and where the mayor has pledged to plant tens of thousands of trees to combat global warming.
The data center deal is so suspect that even free-market libertarians like myself can join hands with leftists and greens in questioning it. To that point, many people on the right were no doubt among the 800 residents of metro Tucson who jammed a public meeting on July 23rd to voice their concerns about the deal and its implications for the city.
Coincidentally, the next day, President Trump announced his industrial policy for AI and data centers. He had taken a break from micromanaging other aspects of the economy, such as appeasing the domestic sugar cartel by pressuring the Coca-Cola company to introduce a version of Coke made with cane sugar.
Trump’s AI policy is based on a mostly correct diagnosis but a questionable remedy. The diagnosis is that AI is a critical technology, that the US is in competition with China on the rollout of AI, that the US doesn’t have enough electricity generation and distribution capacity to meet the power needs of data centers, that generation and distribution have been handicapped by the push for renewable energy, and that the electricity market is suboptimal and in need of a major reform.
He didn’t say anything about data centers needing tremendous amounts of water for cooling or about ancient aquifers already being pumped dry in much of the Southwest and Plains states.
Power companies agree that power generation and distribution are inadequate to meet the energy demands of data centers. Take America’s largest power grid, PJM Interconnect, which serves 65 million people across 13 states and Washington, DC, including Loudoun County, Virginia, which is known as Data Center Alley, because it is home to the nation’s largest hubs for data centers.
PJM Interconnect has issued multiple alerts this summer about reaching maximum generation and loads. The root problem was identified by Joe Bowring, the president of Monitoring Analytics, which is the independent watchdog over PJM Interconnect. Browning told Bloomberg News that there is simply no new capacity to meet the burgeoning loads from data centers. “The solution is to make sure that people who want to build data centers are serious enough about it to bring their own generation,” he said.
But that’s not what they’re doing. Instead, they are raising electricity rates for everyone else, including residential users of electricity.
Wall Street Journal columnist Andy Kessler succinctly summarized the profit calculus in a recent column: Wealth is being transferred from residential and commercial users of electricity to the likes of META and AWS for the operation of their data centers so they can reap big profits from AI. This is from a guy who is a big cheerleader for capitalism and technology.
Trump’s plan is to remove regulatory barriers to the building of new power plants, electricity grids, and data centers; to allow data centers to be built on federal land in order to get around state and local resistance to them; and, in a continuation of his existing policy, to reduce subsidies for renewable energy and electric vehicles while increasing the production of fossil fuels.
There are widely different opinions among Americans on the seriousness of global warming and what can and should be done about it. It serves no purpose to rehash the debate here, other than to say that if global warming is indeed a serious problem, then Trump’s policy will make it worse.
Also, if an overriding goal is to win the AI competition against China, then it is important to recognize that the communists are making advancements in this key technology while also becoming a leader in the production and adoption of EVs, in battery technology, in the availability of charging stations for EVs, in solar panel production and technology, and in the rare earth minerals needed for these industries. At the same time, it is expanding and hardening its electrical grid.
In other words, China isn’t pursuing an either/or strategy of renewable energy or AI. It is pursuing both. And it is doing so for the strategic reason of reducing its dependence on oil, the supply of which can be easily disrupted in a war with the US.
That’s not a Pollyannish view of China. The country has serious problems stemming from the intrinsic shortcomings of an authoritarian state. But what saves it—at least for now—is its ancient culture, its Confucian worldview and long-term perspective, and its large population of citizens who have a high tolerance for suffering and surveillance, a preference for saving over consumption, and a unified front in spite of the nation’s ethnic diversity.
Finally, with respect to data centers, the Chinese government can dictate where they are built. It’s a model of governance that the city of Tucson and Pima County like to emulate.
Mr. Cantoni is a former business executive and environmental activist. Contact: craigcantoni@gmail.com.
Now you’re an environmentalist too? Lol.
Has Grijalva realty and Property Management ever been investigated for money laundering?
Citizens don’t like their government to engage in secret deals, especially when there is a high likelihood that the result will be skyrocketing costs for water and electricity…. but HEY IT’S “A I” and they’ – it – will figure it out? Aside from knowing the numbers of hairs on your back side.. common knowledge with AI insiders U NO doesn’t have matter
I’m sure the Mayorette will come up with a suggestion to help cool the data centers by planting a million trees. (And that’s an order!)
If the president’s policies were limited to, “remov[ing] regulatory barriers to the building of new power plants, electricity grids, and data centers; to allow[ing] data centers to be built on federal land in order to get around state and local resistance to them; and, in a continuation of his existing policy, to reduc[ing] subsidies for renewable energy and electric vehicles,” I’d be all for it!
The fact that Democrat politicians and businessmen will conveniently ignore ‘muh Global Warming’ to make a buck is not only completely expected, it’s completely in character. Scams, as is their wont, are for the gullible.
Building a data center that requires tremendous cooling resources and electric power in a hot desert with limited water and barely enough electric generation to serve the current population might seem really, really stupid. And it is. Why not build it underground in a hospitable environment using reclaimed water/coolants? $$$
But as CCP Mark Kelly demonstrated with World View balloons, it doesn’t take much for Tucson/Pima County politicos to turn a blind eye to the people and devote vast resources not available for their own personal and political gain and Amazon has lots of goodies to hand out to them, but they got caught.
But don’t dare, don’t even think of opening a copper mine in southern Arizona, in the Copper State.
Tucson/Pima County, the commune too far left to thrive much less survive.