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Spotify. There is a lot of pushback against data centers in communities, and there's, I think, a really good reason for that. I mean, it is true that multi-megawatt and even approaching gigawatt data centers create a lot of friction in communities. They create a war for resources and power. They can be built in ways that are really bad for the environment.
And per square foot, they create. A tremendously low amount of jobs after the initial construction projects are done.
So there is real tension to work out there. And honestly, it remains to be seen how profitable a gigawatt campus can be. And they'll say that is John Johnson talking about data centers and what you should look out for. And there's some bipartisan worry on each on both sides, whether it's where they're being built or how they're being built or the sustainable jobs, whether it's taking up farmland or whether it's being too close to cities, or they have to, you know, what kind of water level do they use? What kind of power are they going to need?
Judge Glock joins us now, the Director of Research and the Senior Fellow at the Manhattan Institute, where he specializes in economic policy, infrastructure, and technology. Judge, it's one of those rare things where I see kind of Republicans and Democrats, more Democrats, but they're saying, hey, What's going on with these data centers? I need to discuss this first. That seems healthy. Absolutely right, Brian.
If you look at this, this is an unbelievably new industry. 20 years ago, even 10 years ago, obviously, we weren't talking about this in much of the U.S. And since the release of ChatGPT in 2022, it's absolutely exploded.
So, what you're seeing is this new explosion in data centers across the United States. A lot of local concerns of this are, as there often are, with a new industry that's growing and building in local communities. And I think what a lot of people want is transparency from a lot of these companies building them. But there's also concerns around just the visual impact, the noise, and some other things. But I think...
Not enough of the stories getting out about the benefits of these data centers for local communities, because they can, in some circumstances, be absolutely huge.
So let's talk about that. We know that immediately to build them, you need pipe fitters, you need plumbers, you need electricians, you need people. And but once you build them, the benefit I understand the community is the tax dollars because it's going to be sustainable. But you're not going to need a big staff, correct? Yeah, which is a plus and a minus in one sense.
So some of these finished data centers really only have a few dozen people working for them. You know, for a very large tens of thousands or even hundreds of thousands of square feet, that's not a lot for a local economic development project. But they do throw off just incredible amounts of tax revenue. They really, and I profiled before Loudoun County, Virginia, where they're paying almost half of all taxes in the county, allowed the county to reduce the tax rate by 40% over the past 10 to 15 years. There's other places like Moreau County in Oregon, where they're paying a third of all property taxes.
So these can be these massive benefits that can ideally help lower some of those local property tax rates. And because there's so few people working there, there's not a ton of traffic coming up. There's not a lot of requirements for police or other services.
So they cost very little for these local communities to support. but they give a lot of tax revenue.
So, when the president signed an executive order saying supply your own power, I'm thinking those. Those mini nuclear power plants that they're talking about, green lighting. What are you thinking? Where does the power generate from for the data centers?
Well, a lot of it's going to come from good old fossil fuels. You're going to see a lot more gas turbines be restarted. Obviously, a lot of these data center companies are excited about the possibility of nuclear. You actually saw a big deal signed in Pennsylvania to restart the old Three Mile Island nuclear power plant, which some of your listeners may remember had suffered not a meltdown, but a minor nuclear accident back in the 70s. But the demand for power of these is so high, they're just starting up anything they can, anywhere they can.
And, you know, on the whole, I think that's going to be good for American energy and electricity. But it's also good to make sure these data centers actually pay the cost of the electricity they're consuming, which hasn't always been the case. But most of the time, you see these data centers actually doing a real effort to make sure there's new power coming online along with the data centers.
So the CEO of Potmos Hosting. They built smaller ones. And he says that he has a huge problem with the behemoth companies building these monstrous data centers. I want to get your take, but I want you to hear his point of view, CUD 44. The real sweet spot is that Goldilocks zone for a data center.
And data centers can be built in a way that's really sustainable. Pat Mos built the first actually assessed clean energy data center in history, but that happens in like the 10 to 50 megawatt zone. That's also where the economics make the most sense. And we think that's where the market's really going. And I think there is rightful friction and hesitation against big tech promises.
And so we'll see where that happens. But it might surprise you to know that I'm not entirely opposed to data center moratoriums of 100 megawatts or more. What do you think about that, Judge? Do you need the hundred megawatts or more?
Well, I'm a big believer in capitalism, so I think the market's going to settle this question. Obviously, a lot of big companies in America think you need these. You're looking at what now appears to be a $50 billion data center being built in Richland Parish, Louisiana. And yeah, you see hundreds of thousands of square feet. You see over a gigawatt in power use.
So many multiples of what the speaker there was mentioning. I think he is talking his book a little bit, which is understandable. He's worried about competition from those big data centers. And there's certainly going to be a place for those smaller ones in the future. But we're going to need the entire range of data centers for all the things we're going to keep doing and doing more online.
And Judge, you know, it's no secret that it's harder to build things in these blue states. In New York, they just had a moratorium, right? Not going to build it. We're going to build a solar plast center, have a solar farm. We're not going to build a data center.
And in California, it's almost impossible.
So, and they want to get rid of gas cars.
So, that's not going to be possible. It's going to be up to the next governor to realize it, just like it's not possible with all these other pie in the sky promises. What's going to happen to states like that when it comes to having AI and when it comes to storage Your phone bills and everything else are going to be more expensive. Yeah, it's a real shame because states like New York, which are seeing increased taxes, which are seeing increased out migration to other states, which are actually seeing higher electricity prices, not from data centers, but from all of the green energy mandates they're putting on their electricity sector. And something that could actually help pay a lot of these local taxes could make a lot of people in the state unbelievably wealthy.
Just for example, you see many people in Pennsylvania or elsewhere selling their land for millions or tens of millions of dollars for these data centers. Totally foregoing all of those benefits.
Now, again, I understand why some local communities may have concerns about the noise or the placement or any particular aspects of the data center, but to just foreclose that possibility in time. Yeah, absolutely crazy. They're missing out on one of the biggest booms in American history and cutting off all of their local taxpayers, all of the workers who could benefit from this. And frankly, there are a lot of those are going to move to other places that are more welcoming of economic growth. Hey, it's Ryan Reynolds here for Mint Mobile.
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You know, you do environmental studies, you be smart about it, and then you build it. Absolutely, Brian. I don't understand, frankly, why some people aren't angrier about the fracking bans. I know they are, but there's lots of people that are living in tiny, you know, two-bedroom houses or even trailers that are sitting on what could be $10 million land, and the government's refusing them to get that money. I would be just spitting bullets, and you're actually going to see a similar situation with data centers here.
A lot of working-class Americans out there who could provide for generations if they were just allowed to develop are being shut off just like they were in the fracking situation. Judge Glark is with us. He's director of research and a senior fellow at the Manhattan Institute.
So Judge, the other thing is pipelines. You know, we watch pipelines, they have to be built around New York. To get in Massachusetts, and they got to go and get oil and gas from other countries, while Pennsylvania says, no problem, bring it on.
So that's one thing. I think New Jersey is also a problem with that too. That to me is really ignorance when it comes to pipelines. Yes, of course, if there's some type of terror attack, they might hit a pipeline. That might be a problem, but that's a terror attack.
I know the president was talking to doing some barter with the governor to get it done. Do you know where that's at? I don't know where that particular situation is at, but you're entirely right that it's an incredible own goal or kind of shooting themselves in the foot in these circumstances. One, for oil pipelines, the alternative to moving it on a pipeline is moving it by truck, which wastes more energy, which is more dangerous, which all the other things. And on the natural gas sort of pipelines, this is the foremost sector of growth in the energy field right now.
Natural gas is what's powering a lot of these new data centers. It's what's powering the buildup. It's very quick. It's relatively clean, actually. There's a lot of benefits to this.
And all of the people that maybe five, six years ago that were hoping to move the entire electricity sector green now have to at least privately admit that's impossible. We have an unbelievably, we have an unbelievable growth in energy. These data centers do use a lot. It's about 6% of all electricity right now. And it's going to grow to about 20% in a decade.
This is just a huge amount of electricity. And there's no way to meet that without pipelines, without more natural gas, without more fracking that you already discussed. And the idea that they can do this by doing what New York did, not only banning new data centers, but shutting down the Indian Point nuclear power plant, trying to solve this all through solar power panels and windmills. It's just foolish. There's no way it's going to happen.
And those more pro-development states are going to figure this out and get those gains.
So where are we at with nuclear? I know the President's efforting to pick up the pace. When it comes to getting nuclear, we know it burns clean, and we know everyone's wary of the risk.
So your thoughts about where we're at with nuclear, because now the Europeans are realizing they made a mistake in overreacting to what happened in Japan. And they're realizing it too, aren't they? Yeah, so one of the simplest things we can do is stop closing down the nuclear power plants we have. I mean, this is an absolutely insane thing. Whatever your opinions on starting new plants up, the fact that we have states like California with Diablo and New York with Indian Point, actually closing them down is just Absolutely foolish, and I really can't see the logic to it.
Even for if you're a climate change fanatic, that was green energy for them. And yet, nonetheless, they still forced the closure.
So, stopping that is important. I think states are realizing, again, say starting up the Three Mile Island, Pennsylvania, that this can happen and they can do it.
Now, the big change is actually in the Nuclear Regulatory Commission, which President Trump is pointing some very strong people right there that are. single-mindedly focus on making sure America leads in nuclear energy. And I actually talked with the chairman not so long ago, and they're removing the unnecessary paperwork. They're removing the tests that don't have anything to do with contemporary nuclear power. They're encouraging what these call small modular reactors that, to your point, can power some of these data centers ideally.
I'm pretty bullish in the long run on this. There's a lot of possibility. And with our energy demand being what it is, we have to rely on all sorts of possible power. And nuclear has got to be part of it. And Judge Glark, I do not want to get you into politics, but I just want to know, if the Democrats do get back into power, Has the green fever broken?
Do you still think we're going to have people making statements like we're going to get rid of oil and gas cars and we're going to exist without data centers and we're going to everyone's going to have a solar panel in their living room? Do you think that Al Gore mania, what Joe Biden ran on, is that fever broken for both sides? I think it's going to be mainly rhetorical from now on in the sense of they're going to talk a lot about it, but in terms of actually pushing policies, especially at the federal level, that are going to drive up prices, they know the American public is not going to put up with that right now. They were pushing this in the 2010s or early 2020s when you had basically stable electricity prices. But with the recent inflation, which the increase in a lot of the green energy mandates that they've been putting on in recent years, you've seen a very sharp increase in electricity prices.
Frankly, actually in the states that have seen the least data center growth, which contradicts those people who say this is all because of data centers, and the idea that they could actually transition the economy away from this while having this incredibly growth electricity, I think privately they know that that's impossible. Yeah. I just hope that fever is broken. We can get back to the real world and stop debating the Paris Climate Change Summit. Nobody brings that up anymore.
I hope it changes. It stays that way. Judge, not only are you a fountain of information, you even have a fantastic radio and television voice. And I am very jealous. Judge, thanks so much for joining us.
Oh, thanks so much, Brian. It was a lot of fun.
