The US needs a data center deal — not a moratorium

Texas’s grid operator is sitting on requests for more than 225 gigawatts of new electricity demand. About three-quarters of it is from data centers. The entire grid, which powers 90 percent of Texas and serves more than 26 million people, tops out at roughly 85 gigawatts.  

This isn’t just an energy story, though. It is one visible symptom of a broader governance failure — one that spans power, water, land use and community trust, and is arriving faster than anyone in Washington, Austin or Silicon Valley is equipped to handle. 

Earlier this year, Sen. Bernie Sanders (I-Vt.) and Rep. Alexandria Ocasio-Cortez (D-N.Y.) answered by proposing a national moratorium on data center construction, pausing all new development until Congress passes sweeping AI legislation covering worker protections, environmental standards, civil rights, chip exports, and wealth distribution from AI. I have some sympathy for their frustration, but this isn’t the answer.  

I have spent my career at the intersection of energy, environment and community trust, in Texas and nationally. I have watched infrastructure booms and busts up close. I have seen what happens when infrastructure scales faster than governance. Communities get run over, backlash builds, projects stall, and policymakers reach for the blunt tools — a moratorium, a preemption law, a federal mandate. That’s where we are.

Data centers are becoming as essential to the U.S. as the national highway system or the electric grid. But unlike those earlier systems, they are being deployed at exponential scale without a modern framework to align their effects with their benefits.

Their effects are intensely local — on power systems, water resources and communities — whereas their benefits are distributed nationally and to the private sector. That mismatch is the governance problem. 

Last year, $98 billion in data center projects were stalled or canceled in a single quarter due to community opposition. Dozens of cities and counties have introduced local moratoriums. A dozen state legislatures have introduced their own. 

This isn’t NIMBYism. It’s what governance failure looks like at scale. 

Even Microsoft has acknowledged it — President Brad Smith said at CERAWeek, the annual conference for the energy industry held in Houston, that building data centers now depends on earning the trust of local communities. He is right, but trust isn’t earned through messaging; it is built through structure and process. And that structure and process do not yet exist.

We have seen this dynamic before. In 2015, after a wave of local fracking bans — including Denton, the first Texas city to ban fracking outright — the state legislature passed a law preempting all local oil and gas regulations. Industry won the political fight, and the public-trust costs were severe and lasting. The lesson wasn’t that communities should have been ignored, but that the absence of a workable framework forced both sides to the extremes — and the scars are still there. 

A federal moratorium risks the same dynamic in reverse: using federal power to freeze an industry rather than govern it, hardening opposition on all sides without resolving the underlying conflict.

There’s a better path forward: An AI infrastructure compact that would align national and corporate benefits with local impacts while enabling development to move at speed.  

The principle is simple: Projects that meet clear standards move faster. Projects that don’t face delay and resistance. In our work at the Mitchell Foundation, we have learned that starting with listening — before site plans are drawn or technologies chosen — builds the kind of community trust that actually moves projects forward. That’s the blueprint for what a compact could require nationwide. 

Developers should provide early, standardized disclosure of power demand, water use and infrastructure impacts; communities can’t evaluate what they can’t see. Engagement must begin before key decisions are locked in, with enforceable agreements that deliver local benefits, not just promises. 

Projects should account for their full impact on power systems and water resources — including who bears the cost — with incentives for co-located generation, storage and more efficient cooling. And data center growth should be tied to durable local economic opportunity defined by community members, not just short-term construction cycles. 

When communities trust the process, projects move faster. That’s not idealism — that’s how infrastructure gets built. Replace ad hoc negotiation with clear expectations, give communities a stake in success rather than a reason to resist, and the buildout accelerates on its own. 

Across the country, localities are restricting development not because they oppose technology, but because they don’t trust how it’s being deployed. This is how infrastructure buildouts stall — not because they are unnecessary, but because they lack legitimacy with the people they affect.

The question isn’t whether to build. It’s whether we can build in a way that people will actually stand behind. A moratorium only stops the clock; a compact moves us forward. 

Marilu Hastings is executive vice president of the Austin-based Cynthia and George Mitchell Foundation and director of its Mitchell Innovation Lab. She serves on the National Petroleum Council at the U.S. Department of Energy and chairs the University of Texas at Austin Energy Institute Advisory Board. 

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