Dear Editor,
The purpose of this letter is partially in response to Joe Schaller’s column May 29 issue of the Sun and partially to try to bring more awareness of the issue of the planned data center construction on the west side of Gallup to the public.
Let me start by saying that I was very impressed by the thoroughness of Mr. Schaller’s column. He did indeed address all of the points that I have found to be inherent in this issue. I do find his use of Artificial Intelligence to research the pros and cons of data centers to be an interesting choice. Perhaps it’s just my sense of humor, but that seems a bit ironic. Would A.I. find any cons in building data centers—literally its life blood? I’m 68 years old and perhaps my understanding of AI is naïve.
Also, (being 68), I agree that some of my initial horror of data centers was based in my fears of A.I. But it is true that that genie is out of the bottle. Now, like the Pope, I can only hope that there is careful oversight of the use of such a powerful tool. It is a fool’s errand to try to stop it by stopping data centers.
Having said that, I do think that a data center is a poor choice for Gallup. With the lack of transparency that we (and many others around the U.S.) have experienced around this project so far, we must be very, very careful about how to proceed. Perhaps part of this caution is the “art of the deal,” that Mr. Schaller spoke of, but I believe that the public has a large part to play, as well as his unnamed “team of smart lawyers and experienced negotiators” wherever they may be. I also believe that A.I. may have steered Mr. Schaller in hallucinated directions.
I am not an expert in environmental law, economics, or by any means in data center construction. However, I have done what I believe is very extensive research (even without A.I.!). I found that several of Mr. Schaller’s statements are either misleading or actually false. So, here is the Chicken Little response with as many references as possible for each point.
First, and most importantly, he is of the mistaken idea that the data center planned for Gallup will only use effluent water.
Unfortunately, I have found that many people have been duped into believing that the data center will be on 340 acres; using only effluent water; and using solar and natural gas for fuel.
I encourage everyone to review the presentation that Greg Thompson of Teraplex gave at the April 28 citycCouncil meeting. It is easily found on YouTube. Yes, he did say those words, promising to “never touch any of Gallup’s drinking water.” However, if you actually read the information on the slides he presented, that particular part of the project, named “PHASE I” will be completed by 2027-2028. AND THEN, immediately, PHASES II-IV will be embarked upon. That’s where the damage happens.
Mr. Thompson seems to inadvertently have skipped over that part of his “presentation.” But he forgot to hide the PowerPoint slides which state: PHASES II-V build out a 1+ GW (Gigawatt) data center on 2,400 acres. Please imagine how much closer to neighborhoods and the Navajo Nation that brings the noise, possible heat and almost certain pollution.
Water – Now, to be fair, there is some emerging information about water usage from data centers which paints a less Armageddon-ish picture than we often see. For one thing, the data that we have on water usage is often based on older types of evaporative cooling methods. So, giving credit where credit might be due, Teraplex (at least on their slides) say that they will be using closed-loop, non-evaporative cooling—at least in PHASE I. That helps a bit, but we really do not know what they are planning to use for PHASES II-IV.
Here, I will quote another statement from the PowerPoint slide: “As the campus grows beyond Phase I, we will need significantly more water. We are actively pursuing additional water supply solutions—including the Navajo-Gallup Water Supply Project—so that our growth does not strain local resources.” UNBELIEVABLE, RIGHT? This is the water that we need for our very survival as a town and that the Reservation needs for its survival, as well. This is the Project which is funded by the State of New Mexico, Navajo Nation Sihasin, and the U.S. Bureau of Reclamation. The Project, from which, if a data center touches one drop of water, could be their publicity worst nightmare.
In my opinion, none of this water must be used. If we lose the battle to stop the data center construction, those smart lawyers and experienced negotiators MUST INSIST UPON IMMERSION COOLING for any data centers built in or near Gallup.
Energy: Here is the second most important issue with data centers. In fact, it actually may be the most important issue. Mr. Schaller, again, seems to have been tricked by Teraplex into thinking that all of the energy for the Gallup center will be from natural gas when, in fact, the slides show that in PHASE I, they are hoping that 28% of the energy will be provided by solar panels; 32% from natural gas; 40% from the PNM Utility Grid; and battery Storage. And that’s just for PHASE I.
Mr. Thompson’s words seem to bely the slides he is showing, not to mention that he is very unclear about this entire area. We do not know if Teraplex is planning to build its own microgrid or tap into an existing power grid. My guess is that they will build their own grid since the New Mexico Legislature recently changed our laws so that any industry (read: Data Center) “which builds its own micro grid is exempt from the state’s Energy Transition Act, which mandates a shift to zero-carbon electricity for investor-owned utilities by 2045.” This enables the data centers to continue to pollute and to contribute to climate change in vast amounts with impunity.
Side note: According to Project Jupiter’s (Oracle’s) new commercials (in response to their own publicity nightmare), they are planning to use Bloom Fuel Cell technology to power the monstrosity in Doña Ana County. As I understand it, this would be carbon-free and is fueled by liquid hydrogen. At the very least, I hope that our “smart lawyers and experienced negotiators” will be able to ensure this technology for the planned Gallup center.
Revenue: I admit that I do not know what taxes the data center would provide. In most cases, data centers have been given significant tax breaks to build. The slides from the presentation say somewhat cryptically, that the county (note: not the city) will receive “ongoing annual contributions.” This sounds to me like PILT, or Payments in Lieu of Taxes.
Many states (Ohio and New York) are looking into prohibiting these tax breaks for data centers (“Most states offer tax breaks for AI data centers. Polls show Americans don’t want them.” NBC News, Updated, June 3, 2026). This is because states and localities lose millions of dollars when they accept this type of arrangement. As the neighbor of one data center said in the above referenced article, “We didn’t need to bring them here. If a business is coming here regardless, why should we have to give them a tax break?”
I have no doubt that whatever company becomes a “Customer” will be happy to build some libraries, hospitals, etc. for Gallup. They are slated to make billions of dollars if they win the data center race. Can we get doctors to staff the beautiful hospitals? What do we do with a library when the town runs out of water? Negotiate carefully, smart lawyers.
Jobs: Here is where my research is vastly different from Mr. Schaller’s. It is true that the construction phase will employ many people. We hope that those people will be locally sourced (go, negotiators—don’t forget this part). The statement of “hundreds of permanent workers” is simply unfounded in any research that I found. (New evidence on data center employment effects. Brookings, May 4, 2026) This article warns that “a colocation facility leases space to remote tenants who may have no local operational presence.”
It appears that the data center planned for Gallup is a colocation facility. That is, a facility “built by data center landlords who lease space to remote tenants.” In contrast, “a hyperscale facility (built by cloud and A.I. companies—Amazon, Google, Microsoft, Meta—to run their own workloads)….Hyperscale counties see large information sector gains while colocation counties do not.” Teraflex may claim to be a “hyperscale” facility, but they apparently are still looking for their “Customers” (also, see PowerPoint slides from the presentation) and we have no information about who they could be.
China’s Opposition: Well, at this point, I start to worry about Mr. Schaller. He really should have left this part out. Not only does he enter the paranoid dark place of accusing the locals opposed to the data center of being “Neo-Marxist social justice racketeers posing as concerned environmentalists,” but thinks that we may be funded by China. I’d like to make a joke here (my off-putting sense of humor rears its ugly head) but let me just say that we are not funded—by anyone.
The only even partially organized group that I know of, scrambles every week to find the cheapest place to copy flyers. But, in addition to this, he admits that China “is heavily subsidizing its own A.I. data center operations at a huge ecological cost.” But there is no ecological cost when data centers are built in Gallup?
Secondary Economic Growth: I could really make any pie in the sky comments in this section, much as Mr. Schaller did. Seems a bit far-fetched to assert that the presence of the data center will draw corporate investment, but this is not something I have researched. I am sure developers would fund some training for workers. But I am still skeptical about the number of workers they will require.
Again, I state that I believe that a data center is not the right choice for Gallup. It may be the easy choice, considering the realtors knocking at our door right now. But PLEASE, let’s consider the renewable energy companies current growth. We have plentiful solar energy. Let’s do the right thing.
Concluding, Mr. Schaller challenges the “local government” to get those “smart lawyers and experienced negotiators” to get us a good deal. I agree. I understand the David and Goliath-ness of my opposition to the data center. I just really hope we get that good deal if we fail to prevent the construction of this irresponsible gamble.
Sincerely,
Sharon Bulthaup
Concerned Gallup citizen
