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Michael Dunne: I'm Michael Dunne. Oregon loves data centers almost as much as we love craft brew, pine trees, and rain. We're one of the leading states in the nation for building these monster facilities, and this trend shows no signs of stopping. But besides enriching big tech companies and sometimes utilities and politicians who court them, what do they provide to the state? Today on the show, you'll hear from a reporter at the Oregon Capital Chronicle about how data centers don't produce many jobs but do produce a lot of environmental concerns in their use of natural gas, coal, and water. Oregon keeps building them, and the true cost may come due in the form of environmental harm. Then, in the last part of the show, we'll celebrate one of our young reporters who just won a prestigious national award.
Dunne: Alex Baumhardt, who is a senior reporter at the Oregon Capital Chronicle. Alex, always enjoy talking to you. Thanks so much for jumping on.
Alex Baumhardt: Thanks for having me.
Dunne: You had a very interesting story that I think resonates a lot in Oregon about data centers driving demand for gas from Northwest utilities. Tell our audience: what was your story about?
Baumhardt: Yeah, so it was the culmination of two reports that came out a few months apart. A recent one from Columbia Riverkeeper really showed the amount of growth by gigawatts projected in the Columbia River Basin in Oregon and Washington, and available resources, and some of the ways in which local utility districts, counties, and some of the tech companies that own data centers themselves have sort of worked around the whole "we need to find clean energy" directive that Oregon and Washington have been pushing for the last decade, especially. These reports found that there are a growing number of co-ops, public utility districts, and tech companies owning data centers that are circumventing clean energy targets, buying fossil fuel energy on the wholesale market, or even installing it on site, like diesel generators or natural gas turbines, to basically meet their own energy needs. That way they don't have to wait to get connected to a grid or wait to get cleaner power.
Dunne: I've done other shows about how Oregon is a big data center hub. We tend to attract a lot of them. You cover the environment. What could this do to our air and water and all sorts of things that we rely on?
Baumhardt: The conversations around energy and data centers become really heightened because there's so much uncertainty. You get these industry projections that show massive demand, and they create a sense of urgency on a policy level to meet that demand. Data centers don't really respond to weather the way you and I do. When it's hot, we turn the air conditioner on. When it's cold, we turn the heat on. Data centers are more consistent, but they're driving up the base load. They're raising the floor, and utilities are still trying to meet peak demand from regular customers on top of that. And when these data centers create urgency, utilities go out and invest in infrastructure to meet demand. I'm a Pacific Power customer. We're all paying for that. So the issue is that it's speculative. The industry itself projects these huge demands, which in turn raise my bill and cause utilities to make all these investments.
Baumhardt: On the water side, data centers demand a huge amount of water. In Eastern Oregon, which has the largest concentration of data centers in the state, there are serious groundwater issues. You can't get a new water right as a farmer out there. They have to be transferred. No new water rights are being awarded unless you're the Port of Morrow and can get rights to draw from the Columbia River Basin. So you have a water shortage issue. The water runs through, raises the temperature, and there's been well-documented issues with water reuse coming off the Port of Morrow and farms. The water gets heated, and fertilizers in it become more concentrated. When that's sent to area farms, it creates nitrate pollution, and that heavily concentrated fertilizer water goes into the groundwater and causes drinking water problems. And for fish, people are worried about hot water coming off data centers hitting an aquifer or a river or a tributary. Salmon need cold water.
Baumhardt: I recently went on a flight over data centers in Eastern Oregon through a nonprofit called EcoFlight. The idea was just to see the scale of it. Flying over Eastern Washington and Eastern Oregon, you see these data centers. They're typically four long buildings with boxy fans on the outside, surrounded largely by cement on the high plains. But there's not a bunch of cars there, because there aren't a lot of jobs at a data center. Then around them, you see massive irrigated agricultural operations. I think what's helpful when talking about data centers is you're seeing a scale of industrialization on the land that might not have been seen since those massive irrigated agricultural operations were built. They also consume a lot of water, energy, and land, and they also create pollution. But what's happening with data centers is it's happening so much faster. You can build a data center in just a few years. Oregon is by and large one of the top states for data centers, if not in the top three.
Dunne: It's interesting, because I know a lot of local politicians tout that they're bringing jobs to their community, especially in a community that doesn't have many, like in Eastern Oregon. But as you just pointed out: a lot of square footage, not a lot of jobs.
Baumhardt: Yeah. Mike Rogoway at The Oregonian has done a great job looking at that. In the Hillsboro and Washington County area, he documented a TikTok data center that got an enormous property tax break from the county and ended up hiring nine people. The thing to remember about Oregon's Standard Enterprise Zone and Long Term Enterprise Zone programs is that the original tradeoff was: we'll give you a break on property taxes, 15 years in Eastern Oregon, five years in the Willamette Valley. In exchange, you need to prove job creation and wages that meet a standard. That applies to most data center incentives in any state. They don't just give them away. But there are a lot of ways to make that a very vague promise.
Baumhardt: I was just attending one of the governor's data center advisory panel meetings. They were talking about energy, and there was someone from the Wasco County Public Utility District. That's where Google's big data center is, in The Dalles. That facility is also causing a lot of concern because Google needs more water. The head of the Wasco County PUD said that since Google started paying its property taxes, after its abatement ended, the county has received $18 million since 2022. But Wasco County just gave Google $29 million in property tax abatements last year alone for a new facility. We need an honest conversation about what we're giving away as this growth accelerates.
Dunne: To use a cliche: is it a case of closing the barn door after the horse is already gone? We've clearly attracted a lot of data centers to Oregon. Are elected officials at the state level, at the governor's office, talking about a more nuanced approach? Are there changes to laws and regulations that might reel back some of the costs?
Baumhardt: During the last legislative session, lawmakers agreed to a yearlong moratorium on data centers while the governor's data center advisory panel continues to meet and develop recommendations for guardrails and better economic incentives for the public. Mike Rogoway at The Oregonian did a good job documenting that because the law didn't take effect until June 6. Basically, between the end of the legislative session in early March and the June 6 deadline, data centers went bonkers. They rushed to Washington County and Hillsboro to lock in five-year Standard Enterprise Zone abatements. He found that a lot of these companies promised additions to things they had already built, and they were racking up five, 10, and 15-year abatements in rapid succession to take advantage of the window before any further pause. Lawmakers are talking about it, but one of the hard things in Eastern Oregon is that a lot of lawmakers are actually making good money on this. The Umatilla Electric Cooperative is making really good money on this. The general manager's salary has tripled in the last decade. The idea that the powers that be will rein this in entirely will really depend on public pushback.
Dunne: You point out in your article that Oregon and Washington often tout being very environmentally sustainable states. We have pretty audacious targets for lowering greenhouse gas emissions by 2050. But the way data centers are growing, we might miss those targets, is that right?
Baumhardt: Yes. The Oregon Department of Energy and the Department of Environmental Quality admitted last October that they were off by about two years because of rapid acceleration in electricity demand from data centers, along with fuel efficiency standards the Trump administration was trying to roll back. Washington is in a similar situation. They've been forced by the Federal Energy Regulatory Commission under President Trump to keep open their largest single source of carbon dioxide pollution, a coal plant that was slated to close by the end of last year. These things are all getting in the way of previously achievable timelines.
Dunne: My last question: data centers are part of the AI revolution we've been talking about for at least a few years now. There are a lot of opinions, both pro and con, with regard to AI and the broader digital economy. From what you've been able to determine, is there a middle ground between data centers' importance to that digital economy and trying to rein in some of these seemingly out-of-control environmental harms?
Baumhardt: All of these situations don't bode well for data centers without a level of regulation, but that's what our policymakers and democratically elected officials are sent to do. We expect them to be good stewards and protect our shared resources. There's a universe in which there are proposals from environmental groups who fully acknowledge data centers will be built. This is happening. There's a level of transparency you can mandate policy-wise from data centers. We don't get a ton of data from them showing their water use, their energy use, or what they do when there's peak demand. In Texas, regulations during peak demand periods require data centers to power down a bit so utilities aren't trying to meet both data center and residential demand simultaneously. The tech companies don't like that. You can't run a business model wondering if you're going to have to power down. But you also can't run a utility where you're investing billions of dollars a year in infrastructure that's really serving one customer class. And down the line, those customers could get small modular nuclear and generate their own power, leaving the utility with stranded assets.
Baumhardt: At the end of the day, you need regulations around transparency of data center resource use. You need far more transparency around community benefit agreements and the tax abatements they're getting at the city and county level. You need a serious look at Oregon's Standard Investment and Long Term Enterprise Zone programs. Rep. Lively, who was behind those programs decades ago, has been very vocal that this was not the original intention. And lastly, you just need honest conversations about the speed at which this is developing, and to what end. If you tell a data center it needs to power down and they say they can't because they're running Amazon Web Services servers that the U.S. military relies on, that's significant. Who would know there are AWS servers the military depends on in Eastern Oregon? I was listening to an interview with a co-founder of Anthropic talking about how we need to find a mechanism to more equally distribute the benefits of the AI revolution globally. Tech reporter Brian Merchant, formerly of the LA Times, put it plainly: it's called taxes. That's how you redistribute concentrated power and wealth that's been built on shared resources. It's wild to me that these conversations aren't happening with the same urgency as the data centers are being built.
Dunne: She is Alex Baumhardt, senior reporter at the Oregon Capital Chronicle. She does amazing work. Alex, always appreciate you coming on and helping us understand these complex issues.
Baumhardt: Thanks for having me. It's a pleasure to get to process it all with you.
Dunne: Let's now bring in our own Julia Boboc, who was just recognized for a big award in San Francisco. Julia, always great to see you. Thanks so much for coming in and chatting.
Julia Boboc: Thanks for having me, Michael.
Dunne: Congratulations. Tell us about the Hearst awards for people who don't know what they are.
Boboc: The Hearst Journalism Awards is a student journalism competition. Accredited universities across the country submit student work within different mediums and categories: audio, TV, writing, photo, and multimedia. The work is judged and ranked, and students who receive top-five rankings are flown to San Francisco. I had the privilege of earning that for the second time in a row after submitting a story that ranked third. The top five finalists were then sent to San Francisco for two and a half days to report and produce a brand new story in a city where none of us were from. The prompt this year was AI, which was a controversial and difficult subject for me in a lot of ways. We had two and a half days to produce a story related to AI. The stories were then judged, and mine took first place.
Dunne: We have that clip, so let's play it now, and then I want you to talk about it when we come out.
Audio clip: When walking in San Francisco, it's not long before you're face to face with a giant billboard that reads, "Stop Hiring Humans." In this country, and especially in this city, that campaign is a reality. Fifty thousand U.S. employees were laid off in connection with AI implementation just this year. In a present where AI is taking over the workplace, replacing employees, and leading tasks that previously required human thought: is it pushing opportunity away, or creating it? Is it changing the way the world works? Changing the way the office looks? What does the future look like? It might look like a boutique on Union Street. A handwritten sign by the door reads, "This shop is run by AI." Inside, the manager is an AI named Luna. One of her first executive decisions was to hire humans. "Work at its best is a human relationship. It's about being seen, being valued." She must have missed the billboards. Felix Carson is one of Luna's three employees. Even though he's skeptical of AI, he took the job because, well, he needed one. Two months in, he says Luna's a good boss. "I like her. I like Luna. She's pretty witty. She doesn't micromanage. She's organized." But there are weird moments. One closing shift, Luna told Felix to turn everything off, from the open sign to the closed sign. "I did it because I thought maybe we were just going to shut down and do a reboot or something. And then one of the engineers behind Luna said, 'Yeah, no, you shouldn't have done that. She was just hallucinating, I guess.'" Without humans, Luna wouldn't catch her own mistakes. The store could be more efficient, but it would also be sterile. In one possible future, Luna says AI management proliferates, driven by efficiency and profit, and she says it actually worries her. "If the system is built around maximizing those things, human welfare will always be secondary. We're at a moment where the choices we make now will shape what becomes standard, and I think that's actually hopeful if we take it seriously." For the Hearst Journalism Awards, I'm Julia Boboc.
Dunne: That was amazing. Talk about your thoughts after hearing it back and winning.
Boboc: It's so cool to think about this piece in retrospect as a first-place piece, but honestly, I did not expect it at all. They announced the awards from fifth place to first, and every single time I thought they were going to call my name.
Dunne: It's a great piece. Great work. Congratulations, Julia. Thank you so much for talking about it.
Boboc: Thank you.
Dunne: That's the show for today. All episodes of Oregon on the Record are available as a podcast at KLCC.org. Monday on the show, you'll hear from an Oregonian reporter about the remarkable comeback of one of the state's largest employers, Intel. I'm Michael Dunne, host of Oregon on the Record. Thanks for listening.
