Data center could be coming soon
New Era Helium Inc., an exploration and production company sourcing helium from natural gas reserves in the Permian Basin, and its joint venture partner, Sharon AI, Inc., a computing business focused on Artificial Intelligence, Cloud GPU Compute Infrastructure and Data Storage, announced in February that their joint venture, Texas Critical Data Centers, LLC, has signed a Letter of Intent to acquire 200 acres in Ector County for the development of a 250 MW net-zero energy AI/HPC (high-performance computing) data center.
The acquisition of the large-scale, 200-acre site is contingent on completion of due diligence and negotiation of definitive documents expected within the next 90 days, a Feb. 27 news release stated. This site is one of several identified by the joint venture and is located near key infrastructure, including fiber optic cable, two natural gas transmission lines, and CO₂ pipeline infrastructure. The intended utilization of CCUS and energy transition technologies makes it an attractive location for developing scalable, energy-efficient AI/HPC infrastructure.
Tom Manskey, director of economic development at the Odessa Chamber of Commerce, said the center would be in the vicinity of where Nacero, Summit and FutureGen would have been had any of those projects been completed.Texas Critical Data Centers, LLC,
Manskey said this project looks more promising. He said Nacero was certainly a promising project, but they got hit with COVID, supply chain and inflation.
"You can never be totally certain that a project this size will come to fruition, but certainly we're going to do everything we can to help them," Manskey said.
He does anticipate Texas Critical Data Centers, the joint venture, making an application to the Odessa Development Corporation, but nothing has occurred yet. They have only signed a letter of intent with the landowner, GROW Odessa. GROW Odessa is an an economic development corporation formed in 1966 to help businesses with expansion and to attract new compatible industry to Odessa.
Manskey said the joint venture reached out to the chamber early on and inquired about the property.
"They explained what they were doing with regards to how to develop a data center out here and they felt like Ector County was an ideal location. The longer we've worked with them, the more we think that, one, this development will happen, and two, it probably won't be the last one," Manskey said.
He added that technology is improving with regard to water use by data centers. The water is mainly used to keep the facilities cool because of all the servers.
"Now you're finding better technology with closed loop processes ... where you're basically having to replenish the water that's evaporated. You're not cycling through new water all the time, so as some water evaporates you're replacing that. That's really reducing their water use at least the groups that we're talking to right now with regard to data centers. Water usage has dropped significantly," Manskey said.
He added that there are lot of power generation options out here. One of the things data centers are looking for is redundancy with regard to power generation.
"They don't want to go down for obvious reasons, so if one mode of power generation goes down they want to have another one ready to click on," Manskey said.
they have not started working just doing a
Since the joint venture got interested in Ector County, Manskey said three other data centers have expressed interest in this area, especially once building starts.
"We've got a lot of wide-open spaces out here. Comparatively speaking to your urban areas, land is less expensive. It's not as cheap as it used to be, but it's still when you're looking at trying to put a center in the Austin metro, DFW or Houston (area), typically you're going to pay more," Manskey said.
He added that they are not huge employers. The companies they are talking to now average anywhere from 35 to 75 employees. The payroll average is over $100,000 a year.
"You work in a nice air-conditioned environment, as opposed to being out in the oilfield in August, so even if the pay doesn't match dollar for dollar there will be people that say hey I'd rather work in this air conditioning," Manskey said.
The companies they have been talking to have discussed partnering with Odessa College and University of Texas Permian Basin to train workers.
"What we're hearing is the skill sets match up pretty well with (the) oilfield ... the automation and things of that nature," Manskey said.
Texas Critical Data Centers LLC want to be operational, at least partially by late 2026, he said.
"I will tell you in 30 years of doing economic development, this is the busiest I've ever seen it; not even close. It's been since the beginning of the year. People are starting to move on larger scale projects. We're trying to do everything we can to land everything that we're talking to. You never really do, but you don't want to lose them all either," Manskey said.
"I'm working on the assumption that it's going to happen. We're going to do everything we can to make it happen. Once something like that happens, it's a major capital investment in the county. They're putting like a 40-year lifetime on the facility," he added.
Data centers "house servers that provide computing power and the fans and cooling units needed to keep the equipment from overheating" operate 24 hours a day, according to the Texas Tribune.
"We're careful when we talk to these companies. We're not eagerly recruiting crypto ... At least currently as we've seen them constructed, they tend to be less permanent. They can go away in the night so we're talking to what they've indicated to us is true data centers who have customers like the big oilfield companies out here or Google or Meta," he said.
Manskey said he doesn't know when the data center will be official here, but the company has agreements in principle and they've discussed customers with the economic development team.
In his opinion, based on his experience, Manskey said he believes this project will happen.
"There's three behind it. We're in the stages of trying to get them to that same level of confidence. We've got to do some things out there in west Ector County with regards to access to the sites. These things are in place already as far as work being done towards getting access," Manskey said.
According to a New Eara Helium and Sharon AI news release, GROW Odessa has a successful track record of attracting new business opportunities to Ector County and will work with Texas Critical Data Centers as a first mover to initiate a behind the meter Data Center Campus with an intended pathway to Net Zero Energy. Ector County is expected to be well suited for net zero power due to existing CO2 infrastructure and its ability to facilitate Carbon Capture Utilization Storage via enhanced oil recovery, a news release stated.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CNBC
4 hours ago
- CNBC
Japan's economy expands more than expected in second quarter despite U.S. tariff headwinds
Japan's economy expanded 0.3% in the second quarter of 2025, compared to the first three months of the year, as the country grappled with the volatile tariff policy out of the United States. This was compared to the revised 0.1% growth seen in the first quarter, and was higher than the 0.1% increase expected by economists polled by Reuters. On a year-over-year basis, Japan's GDP expanded 1.2% in the second quarter, falling short of the first quarter's 1.8% growth. The GDP reading comes as Japan struggled to cope with an uncertain trade environment in the second quarter, with the country only reaching a trade deal with the U.S. on July 23. The deal sees Japan face a 15% blanket tariff on all exports to the U.S., including automobiles. Throughout the second quarter, Japan was spared the 24% tariff that was announced on "Liberation Day," but had to face 25% duties on its key automobile sector. Auto exports to the U.S. are a cornerstone of Japan's economy, making up 28.3% of all shipments in 2024, according to customs data. Trade data from April to June revealed that exports to the U.S. had plunged year over year for all three months, with June seeing an 11.4% drop in shipments compared to the same period a year ago. Marcel Thieliant, head of Asia-Pacific at Capital Economics, noted that the 11.4% decline in exports to the U.S. was the largest since the start of the Covid-19 pandemic in 2020. After its July 31 meeting, the Bank of Japan upgraded its forecast for the country's economy to grow 0.6% in its 2025 fiscal year, running from April 2025 to March 2026. However, the central bank also cautioned that trade and other policies globally would lead to a slowdown in overseas economies, as well as a decline in domestic corporate profits.
CNBC
5 hours ago
- CNBC
Chicago Fed President Goolsbee thinks central bank should wait a few months before cutting interest rates
What does a donut tell us about the state of the economy? Chicago Federal Reserve President Austan Goolsbee thought about that Wednesday as he toured Mel-O-Cream Donuts in Springfield, Illinois. Even inside a donut shop, the effects of tariffs on the economy can be seen. "It's sort of surprising, because donuts seem like a very local product, and yet they get some ingredients like palm oil that are coming from Indonesia," Goolsbee said. The Trump administration set tariffs on Indonesia at 19%. "They have to now figure out what are the tariff rates, and the tariffs went up a significant amount. If that happens, that could have a multi-thousand-dollar impact on their operation," he continued. But, he added, "I hope it's not a sign of something more extended or broader in the way that the Covid inflation ... generated its own snowballing, in which it was supposed to go away and it didn't go away." That tariff will cost Chris Larson, a co-owner of Mel-O-Cream, "about $4,000 per shipment per week," he said. And that used to be somewhere "closer to $2,000 to $2,100 weekly. Now it's going to move up to $4,200 ... for the exact same product." Goolsbee's visit matters because he's one of just 12 people in the country who get to decide what to do with interest rates. The Fed's rate-setting committee will next decide whether to cut or hold on Sept. 17, and the perspectives of businesses like Mel-O-Cream are instrumental in helping him determine his next vote. Larson's hope? That the Fed will cut interest rates, which would help Mel-O-Cream finance new equipment to cut costs in labor and blunt the impact of tariffs. "What is the cost of money in order to expand, to upgrade, to update? What do those things look like?" Larson said. "Those things do concern us, and we would love to see, as everyone would, the interest rates would come down." Goolsbee said he wasn't yet ready to tie his hands to an interest rate cut in September. "Let's get a few months of data before we make any conclusions. The hardest thing that the Fed ever has to do is get the timing right at moments of transition," he said Wednesday on NBC News' "Here's the Scoop" podcast. "I think as we go through this fall, September, November, December, all of those are live moments that we could be cutting rates." Government data Thursday showed that wholesale prices paid by U.S. companies rose much more than expected. Another measure, the consumer price index, showed Tuesday that inflation remained stubbornly high in July. The Fed's target for inflation is 2%, lower than the most recent consumer inflation reading of 2.7% and producer inflation reading of 3.3%. Even with those numbers, the market still anticipates a cut next month. President Donald Trump's sweeping tariffs on hundreds of trading partners around the world could affect the cost of most of the imports that businesses buy from overseas. With a myriad of rates as high as 50%, businesses may be faced with a new maze of rates and tariff bills, as well as the uncertainty that comes with the on-again, off-again tariff rollout. "The Fed, by law, is supposed to maximize employment and stabilize prices. So it's inflation and employment that are really the twin towers of how we think about setting of rates," Goolsbee said, underscoring the Federal Reserve's role in the broader economy. "There are parts of the job market where there's still basically labor shortages. It's very hard for people to find workers. And that's what you kind of saw here at the donut factory," he said. Goolsbee oversees the Seventh Federal Reserve District, which includes Iowa, much of Illinois, Indiana, Michigan and Wisconsin. Some of his colleagues, including Jeffrey Schmid, of the Kansas City Fed; Alberto Musalem, of the St. Louis Fed; and Beth Hammack, of the Cleveland Fed, are sounding similarly cautious tones about the economy. All three current Federal Open Market Committee voters have said in recent days that it's either too early to decide or that keeping rates steady for now would be their preference. The futures market predicts the Fed will cut by 0.25% at its next meeting. But some, including Treasury Secretary Scott Bessent, think the Fed should make a more dramatic cut, by up to a half-point. Musalem said Wednesday on CNBC that a cut that large would be "unsupported by the current state of the economy." Amid unrelenting attacks from Trump and his administration against the FOMC and Chair Jerome Powell, Goolsbee, who was an economic adviser to President Barack Obama, said economic indicators should drive monetary policymaking, not politics. "The FOMC and my own thinking are that what should drive interest rate decisions should be the economic conditions and the economic outlook," he said. "I invite anybody to look at the minutes or read the transcripts of the FOMC — the people on that body take extremely seriously that it is the economy that should drive the decisions. And that is what drives the decisions." "This is a committee made up of people from a lot of different perspectives. And as I say, they keep track of, word for word, what everyone says at the meetings. And you can look at it yourself."
NBC News
6 hours ago
- NBC News
Chicago Fed President Goolsbee thinks central bank should wait a few months before cutting interest rates
What does a donut tell us about the state of the economy? Chicago Federal Reserve President Austan Goolsbee thought about that Wednesday as he toured Mel-O-Cream Donuts in Springfield, Illinois. Even inside a donut shop, the effects of tariffs on the economy can be seen. 'It's sort of surprising, because donuts seem like a very local product, and yet they get some ingredients like palm oil that are coming from Indonesia,' Goolsbee said. The Trump administration set tariffs on Indonesia at 19%. 'They have to now figure out what are the tariff rates, and the tariffs went up a significant amount. If that happens, that could have a multi-thousand-dollar impact on their operation,' he continued. But, he added, 'I hope it's not a sign of something more extended or broader in the way that the Covid inflation ... generated its own snowballing, in which it was supposed to go away and it didn't go away.' That tariff will cost Chris Larson, a co-owner of Mel-O-Cream, 'about $4,000 per shipment per week,' he said. And that used to be somewhere 'closer to $2,000 to $2,100 weekly. Now it's going to move up to $4,200 ... for the exact same product.' Goolsbee's visit matters because he's one of just 12 people in the country who get to decide what to do with interest rates. The Fed's rate-setting committee will next decide whether to cut or hold on Sept. 17, and the perspectives of businesses like Mel-O-Cream are instrumental in helping him determine his next vote. Larson's hope? That the Fed will cut interest rates, which would help Mel-O-Cream finance new equipment to cut costs in labor and blunt the impact of tariffs. 'What is the cost of money in order to expand, to upgrade, to update? What do those things look like?' Larson said. 'Those things do concern us, and we would love to see, as everyone would, the interest rates would come down.' Goolsbee said he wasn't yet ready to tie his hands to an interest rate cut in September. 'Let's get a few months of data before we make any conclusions. The hardest thing that the Fed ever has to do is get the timing right at moments of transition,' he said Wednesday on NBC News' 'Here's the Scoop' podcast. 'I think as we go through this fall, September, November, December, all of those are live moments that we could be cutting rates.' Government data Thursday showed that wholesale prices paid by U.S. companies rose much more than expected. Another measure, the consumer price index, showed Tuesday that inflation remained stubbornly high in July. The Fed's target for inflation is 2%, lower than the most recent consumer inflation reading of 2.7% and producer inflation reading of 3.3%. Even with those numbers, the market still anticipates a cut next month. President Donald Trump's sweeping tariffs on hundreds of trading partners around the world could affect the cost of most of the imports that businesses buy from overseas. With a myriad of rates as high as 50%, businesses may be faced with a new maze of rates and tariff bills, as well as the uncertainty that comes with the on-again, off-again tariff rollout. 'The Fed, by law, is supposed to maximize employment and stabilize prices. So it's inflation and employment that are really the twin towers of how we think about setting of rates,' Goolsbee said, underscoring the Federal Reserve's role in the broader economy. 'There are parts of the job market where there's still basically labor shortages. It's very hard for people to find workers. And that's what you kind of saw here at the donut factory,' he said. Goolsbee oversees the Seventh Federal Reserve District, which includes Iowa, much of Illinois, Indiana, Michigan and Wisconsin. Some of his colleagues, including Jeffrey Schmid, of the Kansas City Fed; Alberto Musalem, of the St. Louis Fed; and Beth Hammack, of the Cleveland Fed, are sounding similarly cautious tones about the economy. All three current Federal Open Market Committee voters have said in recent days that it's either too early to decide or that keeping rates steady for now would be their preference. The futures market predicts the Fed will cut by 0.25% at its next meeting. But some, including Treasury Secretary Scott Bessent, think the Fed should make a more dramatic cut, by up to a half-point. Musalem said Wednesday on CNBC that a cut that large would be 'unsupported by the current state of the economy.' Amid unrelenting attacks from Trump and his administration against the FOMC and Chair Jerome Powell, Goolsbee, who was an economic adviser to President Barack Obama, said economic indicators should drive monetary policymaking, not politics. 'The FOMC and my own thinking are that what should drive interest rate decisions should be the economic conditions and the economic outlook,' he said. 'I invite anybody to look at the minutes or read the transcripts of the FOMC — the people on that body take extremely seriously that it is the economy that should drive the decisions. And that is what drives the decisions.' 'This is a committee made up of people from a lot of different perspectives. And as I say, they keep track of, word for word, what everyone says at the meetings. And you can look at it yourself.'
