Midwest's Data Center Boom Sparks Environmental and Political Debate

The Midwest is experiencing a significant surge in data center development, with tech giants like Amazon, Google, and Meta investing heavily in the region.

 

While these projects promise economic growth, they also bring substantial environmental and political challenges.

 

In Kansas City, Missouri, the Port Authority approved up to $100 billion in private funding for "Project Kestrel," a massive data center campus spanning 379 acres.

 

This development is expected to unfold over the next two decades, positioning Kansas City as a key player in the tech industry.

 

However, concerns have been raised about the immense energy and water demands of such facilities, as well as their limited capacity to generate permanent jobs.

 

Commissioner Morgan Said opposed the project, citing these issues.

 

Developers claim each building could generate over 200 jobs, including contracted roles, and pledge to use 50% renewable energy to address environmental concerns.

 

Similarly, in Illinois, climate organizations are calling for a moratorium on new data center developments due to environmental and energy supply concerns.

 

Illinois currently hosts over 220 data centers, ranking fifth in the U.S., making the state particularly vulnerable to their environmental impact.

 

Local advocates, including Save Our Illinois Land and Sustainable Springfield, along with 230 national environmental groups, have pressed Congress to halt further expansion, emphasizing that the AI and cryptocurrency boom risks becoming a major environmental and social threat, particularly for communities of color.

 

Despite these concerns, both the Trump administration and Illinois Governor JB Pritzker support data center growth.

 

Pritzker has implemented subsidy disclosure and eco-friendly construction rules.

 

His office cites a PricewaterhouseCoopers report showing the industry brought $3.51 billion in tax revenue in 2022-2023.

 

Critics argue that the economic benefits are overstated, citing temporary construction jobs and a lack of long-term employment.

 

State law requires new centers to create 20 jobs to qualify for tax breaks, but there's no enforcement to ensure compliance.

 

In Michigan, new legislation provides sales and use tax exemptions for data centers, aiming to attract tech industry investment amid the booming demand for artificial intelligence infrastructure.

 

Governor Gretchen Whitmer has signed two such bills since December, positioning Michigan to compete with other Midwestern states like Iowa and Indiana, which are also seeing growth in data center development.

 

While the legislation is intended to foster job creation and economic development, it has drawn criticism from some Democrats and environmental advocates due to concerns over environmental impacts, limited long-term employment opportunities, and subsidies to large tech corporations like Google and Amazon.

 

Data centers, essential for powering AI technologies, consumed 4.4% of U.S. electricity in 2023—a number projected to grow to 12% by 2028, according to the U.S. Department of Energy.

 

These developments place considerable demands on energy and water systems, often with little transparency or community engagement.

 

While major data center markets remain in places like Columbus and Chicago, interest is increasingly shifting to smaller, more affordable cities across the Midwest.

 

Critics worry the rapid expansion may prioritize corporate interests over environmental sustainability and local benefits.

 

As data centers continue to proliferate across the Midwest, balancing economic development with environmental sustainability and community interests remains a pressing challenge.

 

Policymakers and stakeholders must navigate these complex issues to ensure that the region's growth does not come at the expense of its resources and residents.