New York bans new data centres

**Gideon Long** (0:01)
Data centers, no thanks.

**Kathy Horchul** (0:03)
These data centers require millions of gallons of water, straining the local supplies.

**SPEAKER_3** (0:09)
Should we be paying an increased fee for electricity? That doesn't strike me as fair.

**Gideon Long** (0:14)
It's World Business Report from the BBC World Service. I'm Gideon Long. We're looking at New York State's ground-breaking decision to halt the construction of large-scale data centers. Also, Gibraltar's land border with Spain is scrapped. What will that mean for workers on the rock? And happy birthday Twitter. Or should that be X? Either way, it's 20 years old today.
New York has become the first state in the United States to ban the construction of large-scale data centers. The measure will apply to all centers using 50 megawatts or more of power and will remain in force for a year. The announcement was made by the governor of New York state, the Democrat Kathy Horchul.

**Kathy Horchul** (0:59)
These data centers require millions of gallons of water straining the local supplies.
And when powered by fossil fuels, they drive up our carbon footprint. The bottom line is progress shouldn't arrive with a higher utility bill, deleted water supply or noise pollution. So we have no choice but to address these challenges created by these massive facilities.

**Gideon Long** (1:27)
These two residents in New York state were pleased with the moves.

**SPEAKER_3** (1:30)
Should we be paying an increased fee for electricity, doing the same thing that we've done for years, just because there's more demand for electricity from this new industry? No, that doesn't strike me as fair.

**SPEAKER_5** (1:43)
I don't think it's right the way they treat the people that live in this community. But guess what?
We're going to keep fighting.

**Gideon Long** (1:50)
This is a big and growing issue all over the world. Tech companies are desperate to build more data centers to power the artificial intelligence revolution, but they consume a lot of energy and in some cases a lot of water that's used to keep them cool. The New York state decision came hours after Australia's Prime Minister, Anthony Albanese, announced tougher rules for companies wanting to build data centers there.

**Anthony Albanese** (2:12)
We'll create a legal obligation for the next generation of large-scale data centers to underwrite new power supply, to pay their full share of grid connection so no costs are passed on to homes or businesses, and to put at least as much energy into our grid as they take out of it, to be net generators, not net users, to build new renewable generation and firming, to strengthen our national energy resilience, and ensure that data centers do not increase power prices for Australians.

**Gideon Long** (2:49)
A global issue, then, but it is in the United States that most of these massive new centers are being built. Companies say they're essential to a modern economy. From Washington DC, I'm joined by Paige Lambermont from the Competitive Enterprise Institute, ProBusiness Think Tank in Washington DC.
Paige, thanks very much for joining us on the program. Your reaction to this announcement in New York?

**Paige Lambermont** (3:12)
Thank you so much for having me. Yeah, I think that this decision is incredibly disappointing, but it's not surprising. New York State has made tons of energy policy decisions in the last several decades to hamstring their ability to produce enough power. Everything from their fracking ban that started in 2014, to the closure of the Indian Point nuclear generating facility in 2020
The state tries to ban natural gas hookups. It does all sorts of things to make it more difficult to innovate and build and to produce enough reliable electricity to meet demand. Given that that is the setup in this state, of course, the appearance of new customers on the power grid would be an incredible burden because you've set up a situation in which you can't produce enough power because you're closing existing reliable power plants and making it very difficult to build new ones. So I think that New York is a case of a state where they're not understanding what their real problem is. They're refusing to build new power and to keep the grid reliable. And that's not the fault of the new customer that just appeared on the scene.

**Gideon Long** (4:18)
Okay. Well, but New York State is not saying it's opposed to data centers completely. It's just asking for a pause. And I guess all new technologies do need clear rules. So surely it's reasonable to just press the pause button for a year while those rules are established.

**Paige Lambermont** (4:33)
The thing about pressing the pause button is that data centers are going to be built soon and somewhere, and that they're going to bring economic benefits with them, right? They're going to bring jobs, they're going to bring money, they're going to bring a broader tax base. And the states that allow them to be built will reap those benefits. And the states that forbid them from being built will pay the price in anti-compatitiveness.