A stagnant economy would damage the environment, while bad environmental practices would impede the creation of economic opportunities.
By Curry Roberts
GUEST OPINION WRITER
In reading the recent FXBG Advance article “Local Sierra Club Chapter, Friends of Rappahannock Host Information Session on Data Center,” several things struck me as interesting. This is not meant to create a running debate, but rather provide some additional information that readers might want to know before jumping to conclusions about data center development in this region.
Earlier in my career, I had the good fortune of working for the late Governor Jerry Baliles for whom Longwood University’s Bailes Center for Environmental Education is named. Bailes was well-known for drawing attention to the state of the Chesapeake Bay in the 1980s. In 1986, shortly after taking office, Jerry convinced the General Assembly to split the old and unwieldy Cabinet Secretary of Commerce and Resources into two new Cabinet Secretaries of Natural and Historic Resources and Economic Development (now Commerce and Trade). I was fortunate to serve as his second Secretary of Economic Development.
On first blush, one might think he did this to create endless debate between environmental protection and economic growth. However, those of us who worked for him knew this was not how Jerry thought. He believed that a stagnant economy would damage the environment, while bad environmental practices would impede the creation of economic opportunities.
The reality is this region is one of the fastest growing areas in the Commonwealth. With growth comes the need for infrastructure and services that the area can only afford by attracting new revenue sources or raising taxes on local businesses and residents.
To get ahead of this, leaders in in our region have worked for over a decade to attract data centers and the tremendous local tax revenue they bring. In that process they have had the time to learn lessons from our neighbors to the north and identified larger sites away from dense residential areas that touch transmission lines.
They are requiring greater buffers and minimizing the need for transmission line extensions. Both Stafford and Spotsylvania Counties have engineered “re-use” water systems to deliver treated wastewater for cooling data center equipment. The city of Fredericksburg, as well as Caroline and King George counties have some re-use wastewater available.
The first approved 1,000-acre site in Caroline will be served by reuse water from Spotsylvania under a creative interjurisdictional revenue sharing agreement. Not only does this prevent significant impact on the potable water supply, it also creates additional revenue as the localities will charge the data centers for the re-use water that would have otherwise been treated and discharged back into the watershed.
The Advance article mentioned that localities cannot dictate cooling systems. While that is technically true, localities can and have informed the data center industry that if re-use water is unavailable, the operator will need to utilize a “closed loop,” or other cooling system, and will not make available potable water for long-term cooling purposes.
While those systems use significantly less water, they are unfortunately less energy efficient. This is an example of how localities in our region are using their authority to responsibly matchmake economic growth with the resources they have available.
The piece also mentioned that Caroline County’s withdrawal application was being done to mainly serve data centers. This is not the case. The Virginia Department of Environmental Quality (DEQ) is strongly encouraging localities east of I95, like Caroline and King George, to reduce and potentially eliminate their use of wells for their county operated water systems. Getting off wells is why Caroline began work on this nearly 20 years ago, long before data centers in the region were even contemplated.
When speaking of balance, the potential AWS project in King George is on the site of a former coal fired power plant. Even with backup generators for data centers, whose use is heavily regulated and operationally limited, I would think we all could agree that this data center development is an environmental improvement over the previous use.
Further, AWS offered to provide the County a minimum 600,000 gallons of water per day at no cost that could be treated for potable use from their daily, permitted limit. The existing withdrawal permit has been in place for at least 25 years with minimal, if any, impact to the Rappahannock.
It was correctly pointed out that artificial intelligence (AI) is now driving some of the new data center growth. This is seen as a matter of national and economic security among our federal leaders as China has an edge on AI technology and we, as a country, are playing catch up.
Building the digital infrastructure for AI on U.S. soil is critical in this global competition. I noted with interest how Congresswoman Jennifer Wexton used AI to speak on the House floor last week, as Parkinson’s has robbed her of her ability to speak.
Beyond tax revenue, why have our localities pursued the data center industry?
As is widely discussed, we have nearly 80,000 workers commuting out each day at significant economic and, I would imagine, environmental impact. Data centers are one of the few industries that pay wages that will match what the average commuter makes.
This is not just IT related jobs but also HVAC technicians, plumbers and pipefitters, and electricians. As a matter of fact, the IBEW local out of NOVA has over 1,200 members in our region and 75% commute north for work. Journeyman electricians can earn over $120,000 per year not counting benefits.
The article also mentioned that the localities should just focus on diversifying their tax base by encouraging more small business. Our localities proudly assist small businesses in numerous ways. But creating more high wage jobs in the region creates more disposable income that would be used to patronize and encourage more small business development.
In the near term, some of the new tax revenue could be used to expand assistance programs for existing small businesses and encourage more small business formation.
As for power, yes, data centers utilize a lot of energy and Virginia is well equipped to provide the necessary electric infrastructure to support data centers. Energy is a national issue that congressional and regulatory leaders are working on, and we in Virginia are impacted by what happens in Pennsylvania, Maryland, and North Carolina. All of which are states that we compete with for data center development.
To my knowledge, none of those states is entertaining a moratorium on data center development. Engaging in a “pause” would mean new data center development will go to those states and the challenge of power generation would still be there, but we would lose the benefits of new high paying jobs and extensive tax revenues in Virginia.
There was a question raised about what to do with the buildings if data centers become obsolete. There are great examples of adaptive reuse of industrial properties across the country and one in our own back yard.
After the GM Powertrain plant closed in Spotsylvania and all the requirements were met for redevelopment, the building was purchased by IDX Corporation, which develops and manufactures consumer displays and environments in the plant.
In the opening, I mentioned how Governor Baliles was ingenious in finding the balance between good environmental management and creating economic opportunity for Virginians. It is times like these I miss him the most because I cannot discuss opportunities like this with him. I do believe, though, that Jerry would appreciate the effort our localities have put forth trying to find the right balance.
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