Actual Water and Electricity Use in Data Centers and Why the PILOT Program Is Problematic

Data centers are the backbone of our digital world. They store, process, and transmit the vast amounts of data we generate every day. But behind the scenes, these facilities consume huge amounts of water and electricity. Many people don’t realize the real impact of data centers on local resources and communities. In this post, I want to explain the actual water and electric use of data centers, describe the PILOT program and why it’s harmful, and expose some of the misleading claims data centers make. I’ll also touch on the roles of BlackRock and Blackstone in this industry and how data centers get approved despite public opposition.

Eye-level view of a large data center cooling system with water pipes

Data centers rely heavily on water and electricity for cooling and operation.

How Much Water and Electricity Do Data Centers Actually Use?

Data centers need a lot of power to run servers and keep them cool. Cooling is essential because servers generate heat, and overheating can cause failures. Many data centers use water-based cooling systems, which consume large volumes of water daily.

Water Use

Water is often used in cooling towers or evaporative cooling systems. A single large data center can use millions of gallons of water per year. For example, some facilities consume as much water as a small town. This water use can strain local water supplies, especially in drought-prone areas.

The problem is that data centers often claim they use recycled or non-potable water, but in reality, many still rely on fresh water sources. This puts pressure on communities that already face water shortages.

Electricity Use

Electricity consumption is even more staggering. Data centers can use tens to hundreds of megawatts of power. To put that in perspective, a 100 MW data center uses as much electricity as about 80,000 homes.

Despite claims of using renewable energy, many data centers still depend on fossil fuels. The electricity demand contributes to carbon emissions and environmental degradation.

What Is the PILOT Program and Why Is It Bad?

PILOT stands for Payment In Lieu Of Taxes. It’s a program that allows data centers and other large facilities to pay reduced taxes to local governments instead of full property taxes.

Why PILOT Hurts Communities

• Reduced Revenue for Public Services

Local governments lose significant tax income because of PILOT deals. This means less money for schools, roads, emergency services, and other community needs.

• Unfair Advantage for Data Centers

PILOT agreements give data centers a financial break that other businesses and residents don’t get. This creates an uneven playing field.

• Encourages More Data Centers

Because PILOT lowers costs, it encourages companies to build more data centers, increasing water and electricity use and environmental impact.

Many communities oppose PILOT deals, but data centers often get approved anyway because of the influence of big investors and promises of jobs.

High angle view of a city council meeting with community members opposing a data center

Communities often oppose data centers due to environmental and tax concerns.

Lies People Are Told by Data Centers

Data centers often present themselves as green and community-friendly, but many claims don’t hold up under scrutiny.

• “We Use Only Renewable Energy”

While some data centers buy renewable energy credits, the actual power they use often comes from fossil fuels. This practice masks their true carbon footprint.

• “We Use Recycled Water”

Some data centers say they use recycled or non-potable water, but investigations show they still draw heavily from local freshwater sources.

• “We Bring Jobs and Economic Growth”

Data centers create few permanent jobs compared to their size and impact. Most jobs are temporary during construction.

• “We Pay Fair Taxes”

Thanks to PILOT programs, data centers pay far less in taxes than other businesses, shifting the burden to residents.

These lies help data centers gain approval and public support, even when the real costs are high.

BlackRock and Blackstone’s Role in Data Centers

Two major investment firms, BlackRock and Blackstone, have significant stakes in data center companies and real estate.

• BlackRock is one of the world’s largest asset managers. It invests heavily in technology infrastructure, including data centers. BlackRock’s influence helps push data center projects forward, often prioritizing profits over community concerns.

  
  

• Blackstone is a private equity giant that owns or finances many data center properties. Blackstone’s focus on maximizing returns can lead to aggressive expansion, sometimes ignoring environmental and social impacts.

  
  

Both firms benefit from the growing demand for data storage and cloud services. Their involvement often means more data centers get approved, even when local residents oppose them.

How Data Centers Get Approved Despite Opposition

Many communities resist data center projects because of water use, electricity demand, and tax breaks. Yet, these projects often get approved. Here’s why:

• Political Influence and Lobbying

Data center companies and their investors spend heavily on lobbying. They influence local and state officials to approve projects and offer PILOT deals.

• Promises of Economic Benefits

Officials are often persuaded by promises of jobs and investment, even if those promises don’t materialize as expected.

• Lack of Transparency

Approval processes can be opaque. Communities may not get full information about water and energy use or tax impacts.

• Urgency of Digital Infrastructure

Governments want to attract tech companies to stay competitive. This urgency can override environmental and social concerns.

Close-up view of a data center server rack with blinking lights

Data centers require constant power and cooling to operate efficiently.

Examples of Products and Services Related to Data Center Energy and Water Use

To understand the scale and solutions around data center resource use, here are some relevant products and services:

• Water-Efficient Cooling Systems

Advanced cooling technologies reduce water consumption by using air or recycled water. These systems help lower environmental impact but are not yet widespread.

• Renewable Energy Procurement Services

Some companies offer services to help data centers buy and verify renewable energy, improving transparency and reducing carbon footprints.

• Energy Monitoring and Management Software

These tools track electricity use in real time, helping data centers optimize power consumption and reduce waste.

Using these products can help data centers become more sustainable, but adoption is uneven.

Final Thoughts

Data centers are essential for our digital lives, but their real water and electricity use is often hidden behind misleading claims. The PILOT program lets them pay less in taxes, hurting communities that bear the environmental costs. Big investors like BlackRock and Blackstone push these projects forward, often ignoring local opposition.

Understanding the true impact of data centers helps us ask better questions about technology’s future. We need more transparency, fair taxation, and real sustainability in this industry. Only then can we balance digital growth with protecting our communities and resources.

If you want to explore these issues further, consider reading Data and the Beast, which dives deep into the intersection of AI, data centers, and biblical prophecy.

This post is for informational purposes only and does not constitute legal or financial advice.