New Mexico
Understanding New Mexico’s data center boom | Opinion
After years of failure to land a “big fish” business for New Mexico’s economy (or effectively use the oil and gas revenues to grow the economy) Gov. Michelle Lujan Grisham with the help of her Economic Development Secretary Rob Black have lured no fewer than three large data centers to New Mexico. These data centers are being built to serve the booming world of Artificial Intelligence (AI), and they will have profound impacts on New Mexico.
It is our view that having these data centers locate in New Mexico is better than having them locate elsewhere. While we have many differences of opinion with this governor, we are pleased to see her get serious about growing and diversifying New Mexico’s oil-dependent economy albeit quite late in her second term.
Sadly, the governor and legislature have chosen not to use broad based economic reforms like deregulation or tax cuts to improve New Mexico’s competitiveness. But, with the failure of her “preferred” economic development “wins” like Maxeon and Ebon solar both of which the governor announced a few years ago, but haven’t panned out, the focus on a more realistic strategy is welcome and long overdue.
Currently, three new data centers are slated to be built in New Mexico:
- Oracle’s Project Jupiter in Santa Teresa with an investment of $165 billion.
- Project Zenith slated to be built in Roswell amounts to a $11.7 billion investment.
- New Era Energy & Digital, Inc. While the overall investment is unclear, the energy requirement is the largest of the three at 7 gigawatts (that’s seven times the power used by the City of San Francisco).
What is a data center? Basically, they are the real-world computing infrastructure that makes up the Internet. The rise of AI requires vast new computing power. It is critical that these facilities have uninterrupted electricity.
That electricity is going to be largely generated by traditional sources like natural gas and possibly nuclear. That contravenes New Mexico’s Energy Transition Act of 2019 which was adopted by this Gov. and many of the legislators still in office. Under the Act electrical power emissions are supposed to be eliminated in a few years.
With the amount of money being invested in these facilities and the simple fact that wind and solar and other “renewable” energy sources aren’t going to get the job done. In 2025 the Legislature passed and MLG signed HB 93 which allows for the creation of “microgrids” that won’t tax the grid and make our electricity more expensive, but the ETA will have to be amended or ignored to provide enough electricity for these data centers. There’s no other option.
New Mexicans have every right to wonder why powerful friends of the governor can set up their own natural gas microgrids while the rest of us face rising costs and decreased reliability from so-called “renewables.” Don’t get me wrong, having these data centers come to New Mexico is an economic boon.
But it comes tempered with massive subsidies including a 30-year property tax exemption and up to $165 billion in industrial revenue bonds. New Mexico is ideally suited as a destination for these data centers with its favorable climate and lack of natural disasters like hurricanes, tornadoes, and floods. We shouldn’t be giving away such massive subsidies.
Welcoming the data center boom to New Mexico better than rejecting them and pushing them to locate in other states. There is no way to avoid CO2 emissions whether they happen here or somewhere else. But, there are questions about both the electricity demand and subsidies that must be addressed as New Mexico’s data center boom begins.
What will the Legislature, radical environmental groups, and future governors of our state do to hinder (or help) bring these data centers to our State? That is an open question that depends heavily on upcoming statewide elections. It is important that New Mexicans understand and appreciate these complicated issues.
Paul Gessing is president of New Mexico’s Rio Grande Foundation. The Rio Grande Foundation is an independent, nonpartisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility
Josh’s Saturday Night Forecast
NEW MEXICO (KRQE) – Calmer weather has moved back into the state this afternoon. Temperatures are slightly warmer across northwestern New Mexico, while southeastern areas are cooler thanks to the backdoor cold fronts that moved in on Friday. Breezier winds will return Sunday and will help kick off a warming trend across the state, along with an elevated fire threat in eastern New Mexico.
Warmer weather will continue building in across the state throughout the upcoming week. A few isolated rain chances will return Monday in parts of New Mexico, but some of that rain may evaporate before reaching the ground.
Good morning!
Heading out the door this morning? Bundle up! Cold air has settled into the Land of Enchantment after two cold fronts passed through New Mexico within the last 24 hours. Temperatures have fallen to the teens, 20s and 30s throughout northern New Mexico. The metro area is just as cold with Moriarty falling to the teens and several other cities bottoming out near the freezing point. The National Weather Service (NWS) has Freeze Warnings in place until 9 a.m. for several locations in northern and central New Mexico. However, one of the aforementioned cold fronts is still moving through eastern New Mexico this morning. That back door cold front has brought 30-45 mph wind gusts, or more, in southeastern New Mexico. The front will push west further west this morning bringing breezy winds to far south and southwestern New Mexico this afternoon. Otherwise, much calmer weather will be on tap for the state compared to the majority of this week.
The colder air this morning will bring cooler and seasonable weather to the Land of Enchantment later on Saturday. Afternoon highs will range from the high 50s, in sections of the northern mountains, to the 70s in southern New Mexico. Throughout the weekend into early next week a warming trend is expected as a ridge of high pressure builds on Sunday, which is forecasted to last through at least Tuesday. By next Tuesday, high temperatures will be 5 to 15 degrees above normal, and even warmer for some locations by next Wednesday with breezy conditions returning to the state.
Moisture does stream back into the state early next week across New Mexico. Tomorrow’s forecast is expected to have cloud coverage increase with warmer weather. On Monday sufficient moisture in the mid to upper levels of the atmosphere will bring the chance for showers; however, moisture levels toward the surface will be lower. That will also bring the chance for dry showers and thunderstorms throughout the state. Have a great weekend and stay warm this morning!
ALBUQUERQUE, N.M. (KRQE) – A New Mexico man has taken a plea deal for his role in the death of a three-year-old girl more than two years ago. Police said that Kerri Santos brought her toddler to University of New Mexico Hospital, claiming that she fell and hurt herself. Medical staff determined the child was already dead when she arrived, and noticed signs of abuse, including evidence that she had been tied up. Police said that Santos and three others were staying at James Welch’s home when the abuse took place.
On Friday, Welch pleaded no contest to three counts of child abuse and tampering with evidence. He faces up to five years behind bars.
-
Texas3 seconds agoTexas needs at least $174 billion to avoid water crisis, state says
-
Utah6 minutes agoMultiple earthquakes detected near Kanosh
-
Vermont12 minutes agoWrong-way driver stopped on I-89, charged with DUI
-
Virginia18 minutes agoParachutist Slams into Jumbotron at Virginia Tech Spring Game
-
Wisconsin30 minutes agoUS animal rights activists clash with police over Wisconsin dog breeder
-
West Virginia36 minutes agoThe 2026 WVU Tommy Nickolich Award Goes to a Parkersburg Native
-
Wyoming42 minutes agoWyoming Gov. Mark Gordon won’t seek a third term. He won’t rule out running for other offices, either
-
Crypto48 minutes ago1 Cryptocurrency to Buy While It’s Under $80,000