Data centers are a polarizing topic in much of rural America. McKenzie Boyce, an assistant professor of agricultural economics at Oklahoma State University, talked about why data centers are such a big topic of conversation.
“I think for a number of reasons, but as we see data center development, or the demand for data center development, increasing across the country, these data centers need additional places to locate, and in a lot of rural areas, there’s obviously land available, and it can often be available at relatively lower costs. So, I think that’s one of the main reasons we’re seeing more attention to data centers in rural areas.”
The centers can bring benefits and challenges to rural America.
“I think there are a lot of different potential economic benefits as well as potential limitations or pitfalls of data centers locating in rural communities or any community. Unfortunately, there’s not a clear set of benefits and limitations. I think that any of the economic considerations of data centers can be either a benefit or a limitation or drawback, depending on how it plays out in that community. But some of the main economic considerations will be revenue, employment, infrastructure, and opportunity costs. So, we can think of data centers potentially generating jobs in communities at maybe higher wages, as well as additional revenue coming through to that community through sales tax revenue, property taxes, payment in lieu of tax agreements, and we also know that these data centers are investing in a lot of infrastructure.”
Each community needs to evaluate the potential benefits and challenges.
“While evaluating data centers and deciding whether it is a benefit or drawback to the community, especially in rural areas, we can think about what other types of developments they may be foregoing in order to say yes to that data center. But whether it’s a benefit or a pitfall across all of these different economic considerations will really depend on the specifics of the project, as well as some of the negotiations that the host community can work out.”
There are things community leaders should consider when discussing the pros and cons of a data center.
“OSU Extension fortunately has a nice fact sheet out, right now, looking at a lot of the different considerations. I think about 130 different questions that might be considered or reflected upon when evaluating these proposals, ranging from water and energy considerations to some of the economic and community impact considerations. But I think there are a lot of different questions that could be considered by communities evaluating or considering data center proposals, but I think it’s important that communities consider both or ask both what is the benefit and really outline and make sure that they have a clear understanding of what the potential benefit is in terms of what is the community getting out of this project, as well as asking what is the community maybe losing out on as a result of this project, and really make sure that they have a firm grasp on both the potential benefits as well as the potential limitations. It really needs to be a balanced discussion and making sure that communities are really aware of how the project could impact them on both sides.”