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Meta and OpenAI agree to follow Texas’ new standards for data centers

data demands

Meta's El Paso data center. Image via atmeta.com

Meta Platforms, the parent company of Facebook and Instagram; OpenAI, the owner of ChatGPT; and other tech companies have agreed to follow Texas’ new standards for the development of data centers.

As Texas politicians respond to communities’ increased pushback against power- and water-dependent data centers, Gov. Greg Abbott recently established guidelines for data center projects. President Trump and Gina Jinojosa, a Democrat who will oppose Abbott in the November election, have leveled criticism about the new rules.

Abbott recently directed the Public Utility Commission of Texas and Electric Reliability Council of Texas (ERCOT) to ensure data centers:

  • Pay for their electrical infrastructure instead of shifting costs to families and small businesses
  • Reuse their own water
  • Reduce the cost of electricity for Texans
  • Prevent disruption to residential neighborhoods
  • Eliminate reliance on taxpayer-funded financial incentives

Abbott and Trump differ over data center ‘guardrails’

After releasing the guidelines, Abbott put a moratorium on new data centers in the state.

Abbott directed the Public Utility Commission and ERCOT to audit all data center projects going through ERCOT’s approval process for connecting to the state’s power grid. The two agencies must complete their review before a data center project can join the grid. Any project that fails to comply with the agencies’ requirements won’t be permitted access to the grid.

“I established clear guardrails to ensure data centers protect our electric grid, conserve our water, respect our neighborhoods, and pay their own way,” Abbott, who’s running for a fourth consecutive term as governor, said in a news release. “They must not pass costs on to Texas families or interfere with their quality of life.”

Abbott has hailed Texas as “the epicenter of AI development.”

In a recent interview with Punchbowl News, President Trump questioned the data center rules imposed by Abbott, a fellow Republican.

“I saw Texas the other day sort of is against data centers,” Trump said. “I think it’s a mistake. And I’m not taking positions, I just think it’s a mistake, because there are other communities that want it. When a community wants it, it means a lot of money is going to come into that community.”

In a statement, Gina Hinojosa, the Democratic nominee for Texas governor, stresses that the governor’s data center standards don’t wield the same power that laws would.

“We need a moratorium on data centers until the legislature can meet to put in place real protections so Texans can have a seat at the table to decide if and how data centers come into their communities,” Hinojosa said. “When the companies being regulated are cheering for the rules, you know the rules were written for them, not for Texans.”

The Texas Tribune has identified at least 248 planned data centers in the state, with perhaps hundreds more that aren’t as far along in the development process. At least 355 data centers already operate in Texas. The majority of the new data centers will help power AI software and services.

Meta promises it will be ‘paying our own way‘

In a blog post, Meta commends Abbott’s data center initiative. Meta and investment manager BlackRock are investing more than $10 billion to build a data center campus in El Paso. The 12-building campus, expected to go online in 2028, will be capable of delivering 1 gigawatt of computing power to support Meta’s AI technology.

BlackRock will own 80 percent of the project, and Meta will own the remaining 20 percent.

Meta’s two other Texas data centers are in Fort Worth and Temple.

“Whether it’s creating jobs, growing opportunities for local businesses, or improving energy and water infrastructure, we’re committed to strengthening communities and paying our own way,” Meta says of Abbott’s directive.

OpenAI commits to helping Texas maintain AI leadership

In an Aug. 7 letter to Abbott, OpenAI says it, too, will follow Texas’ data center standards. In fact, the company says the standards reflect practices it already applies to data center projects.

“Texas has built a strong environment for innovation, energy, and economic growth,” the company says. “OpenAI wants to help Texas remain a national leader in AI while demonstrating that this growth can be responsible, reliable, and beneficial to Texans.”

OpenAI is building a $470 million data center in Milam County, and last year it launched operations at a data center campus in Abilene as part of its $500 billion Stargate initiative with Oracle and SoftBank.

Abbott’s office also announced Aug. 11 that EdgeConneX and Stream Data Centers have also pledged to comply with the regulations. Read more here.

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Texas is poised to become the world’s largest data center market. Photo courtesy Google

Texas Gov. Abbott seeks data center crackdown as state grapples with growing power demand

growing pains

Just seven months ago, Gov. Greg Abbott trumpeted Google’s $40 billion plan to add three data center campuses in Texas. Now, amid growing public outcry over such projects, Abbott is pushing for a regulatory crackdown on data centers in the Lone Star State.

Abbott recently sent a letter to leaders of the Public Utility Commission of Texas (PUC) and the Electric Reliability Council of Texas (ERCOT) proposing stricter oversight of the state’s data centers. Texas is home to more than 400 data centers, with many more on the way, and is poised to become the world’s largest data center market.

Among other things, Abbott wants to:

  • Ensure residential electric bills go down — not up — as data centers connect to ERCOT’s grid, which supplies power for about 90 percent of Texans.
  • Require data centers to cover the costs of upgrades to deliver electricity to the power-hungry facilities.
  • Repeal sales tax exemptions and other “outdated or unnecessary” financial incentives for data centers.
  • Institute “best practices,” such as property setbacks and noise-reduction technology, to ease the impact of data centers on nearby residents.
  • Demand that all new data centers, which use a tremendous amount of water, be built with water-efficient technology.
  • Require large data centers to generate annual reports on their use of electricity and water.

Abbott has set a July 17 deadline for the PUC and ERCOT to address his recommendations.

“As Texas continues to welcome innovation and investment, we must ensure that growth strengthens our people and their quality of life without placing undue burdens on Texans and local communities,” Abbott wrote.

Abbott’s call for tighter control of data centers has elicited both praise and skepticism.

In a social media post on X, Texas House Speaker Dustin Burrows, a Lubbock Republican, thanked Abbott for seeking “accountability and reform” in the state’s data center industry. Burrows has made data centers one of his priority issues for the 2027 state legislative session.

State oil and gas regulator Wayne Christian, a member of the Texas Railroad Commission, weighed in with similarly positive comments about Abbott’s directive. He says an outright ban on data centers isn’t the answer to residents’ complaints about new facilities.

“The Texas way is not to answer innovation with government overreach or fear-driven bans,” Christian, whose agency wasn’t cited in Abbott’s letter, said in a statement posted on X. “Our job is to protect prosperity, safeguard taxpayers and ensure the infrastructure that powers our economy remains strong and reliable.”

Gina Hinojosa, an Austin Democrat who’s challenging Abbott in this November’s gubernatorial race, took issue with the governor’s edict on data centers.

“Greg Abbott is changing his tune on data centers because he knows his policies are unpopular,” Hinojosa, a state representative, wrote on X. “Nobody believes the arsonist is gonna be the one to put out the fire.”

Abbott’s call for stepped-up regulation of data centers echoes many of the concerns expressed by the state chapter of the Sierra Club, an environmental nonprofit.

“The growth of data centers reflects a broader transformation taking place across Texas,” the Sierra Club says on its website. “The state is becoming a hub for the technologies that will shape the future economy, from artificial intelligence to advanced computing and cloud services. At the same time, Texans deserve transparency about how these projects affect the communities where they are built.”

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ExxonMobil expands Gulf Coast CCS business with Louisiana deal

carbon contract

Spring-based energy powerhouse ExxonMobil has picked up another project in the carbon capture and storage (CCS) market.

Natural gas pipeline operator Williams Cos. has tapped ExxonMobil to transport and store up to one metric ton per year of CO2 from Williams’ natural gas collection and processing plant in southwest Louisiana’s Haynesville Shale.

Williams will transport natural gas via its Louisiana Energy Gateway pipeline, then process the natural gas and deliver it to the Gulf Coast for export as liquefied natural gas (LNG). The LNG will be used in power generation, residential and commercial heating, and industrial processes.

Williams recently agreed to acquire Momentum Midstream for up to $5.5 billion to expand Williams’ LNG presence in the Haynesville Shale. Haynesville is the country’s third-largest producer of natural gas.

Once the deal closes, Williams will own a $1.5 billion project in southwest Louisiana that will expand capacity of the Transco natural gas distribution system. The system serves power and LNG-export customers. Williams will also gain over 4,000 miles of pipeline and more than one million acres.

While Williams is based in Tulsa, Oklahoma, it has a significant presence in Houston. Last month, Green Street’s Real Estate Alert reported Williams bought the 64-story, 1.4 million-square-foot Williams Tower south of The Galleria from Invesco Real Estate for more than $300 million. The company will occupy about 360,000 square feet in the skyscraper for its Houston hub.

Williams employs about 800 people in Bayou City, including roughly 700 who work at Williams Tower, and plans to hire another 100 by the end of this year.

The Williams deal is ExxonMobil’s seventh CCS contract. ExxonMobil’s CCS portfolio supports LNG, lower-carbon-intensity steel, ammonia, natural gas processing, industrial gases and methanol.

ExxonMobil has established a “carbon superhighway” along the Gulf Coast to fuel its CCS business. The company owns and operates a more than 1,300-mile CO2 pipeline system, the largest in the U.S.

“Carbon capture is becoming an increasingly important part of industrial operations, but capture alone doesn’t solve the problem of high emissions,” says ExxonMobil. “What matters next is how CO2 is transported, used, and stored.”

ExxonMobil’s CCS initiatives are aimed at capturing a chunk of the rapidly growing CCS market in the U.S. Straits Research forecasts the market will grow from $5.66 billion this year to $13.56 billion by 2034.

“It’s not every day you get to witness the birth of a new American industry, but that’s exactly what’s happening right now at the U.S. Gulf Coast,” Dominic Genetti, senior vice president of CCS at ExxonMobil, wrote in an article published last year on the company’s website.

Fervo Energy, Mercury Fund leaders named first experts in residence for TEX-E

energy mentors

Two leading companies in Houston's clean energy scene have been named the Texas Exchange for Energy & Climate Entrepreneurship's first experts in residence.

TEX-E announced this month that Houston-based geothermal unicorn Fervo Energy and venture capital firm Mercury Fund have joined the nonprofit's new Expert-in-Residence partnership. The program aims to connect TEX-E Fellows with "the people and organizations shaping the future of energy and entrepreneurship."

The 2026 TEX-E Fellows were named in June and include 67 students from six Texas universities and the Massachusetts Institute of Technology. Nineteen are from Houston universities. See the full list here.

Through the Expert-in-Residence program, fellows will be able to network and work with:

"More than anything, students need the determination and creativity to step outside of their comfort zones and tackle problems that lack clear answers. At Fervo, we've consistently bet on young people who lack traditional 'hard skills' but are willing to embrace uncertainty and learn on the job. That open-mindedness will take students far," Jewett said in a prepared statement. Fervo named Jewett as COO in June.

TEX-E was founded in 2022 through partnerships with MIT Martin Trust Center for Entrepreneurship and Greentown Labs. It works with university students from six schools: Rice University, University of Houston, Prairie View A&M University, The University of Texas at Austin, Texas A&M University and MIT.

The organization named Houston venture capital and innovation leader Sandy Guitar as its new executive director last year. Guitar previously served as general partner and managing director at Houston-based VC firm HX Venture Fund and is co-founder of Weathergage Capital.

TEX-E is known for its student track within the Energy Venture Day and Pitch Competition at CERAWeek. It awarded $50,000 to student teams from the University of Texas and Rice University. Read more here.

BP to sell Houston’s Archaea Energy after $4.1 billion bet on biogas

RNG exit

Oil and gas conglomerate BP is unloading its Houston-based U.S. renewable natural gas business just four years after buying it.

The British company announced the planned sale of Archaea during its most recent earnings call but offered few details.

On the call, BP’s new CEO, Meg O’Neill, said her company had put Archaea on the market and already had attracted interest from potential buyers. BP acquired Houston-based Archaea Energy, the country’s largest producer of renewable natural gas (RNG), in 2022 for about $4.1 billion.

BP, whose North American headquarters is in Houston, is streamlining its portfolio. As such, O’Neill said Archaea represents a “capital intense” approach to biogas instead of the “capital light” approach BP now favors.

“If there’s somebody who sees an opportunity to create additional value, who will invest in that business, who will build on the foundation, because our team has made really good progress in improving the profitability of that business, then that will be a good outcome,” O’Neill told Wall Street analysts.

The proposed sale of Archaea is part of BP’s effort to sell about $20 billion in assets by the end of next year.

Archaea captures biogas, a natural byproduct of waste decomposition at landfills and dairy farms, and converts it into electricity or RNG. This process leads to cleaner air, less odor, and more sustainable energy than traditional fossil fuels.

Archaea was slated to be a cornerstone of BP’s plan to boost its biogas supply by roughly 600 percent to the equivalent of about 70,000 barrels of oil per day.

Bioenergy had been identified as one of bp’s five pillars of its multibillion-dollar energy transition initiative.

Another pillar: EV charging. Last month, BP agreed to sell its EV charging business in Austria to Switzerland’s Volenergy, along with 250 BP-branded stores and a fleet of business vehicles.

“By concentrating our capital on the assets and markets where BP can be most competitive and best serve customers, we are strengthening our balance sheet and creating a stronger downstream portfolio,” Richard Harding, interim executive vice president of downstream at BP, said of the Volenergy deal.

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