Wyoming's 'Project Jade' Data Center Expands to 2.7 Gigawatts, Raising Grid and Water Questions
January 9, 2026
A massive data center project in Cheyenne, Wyoming, has significantly expanded its planned power capacity, now aiming for 2.7 gigawatts—nearly triple the entire state's current electricity consumption. The development, named "Project Jade," is a joint venture between infrastructure operator Tallgrass Energy and Texas-based data center firm Crusoe Energy Systems. Its scale underscores the intense energy demands of modern computing, particularly for artificial intelligence, and places Wyoming at the center of national debates over energy infrastructure, resource use, and economic development.
Originally announced in August 2025 as a 1.8-gigawatt facility, the project received unanimous approval from the Laramie County Commission this week for building permits. During the meeting, company representatives revealed the expanded scope. Raymon Williams, Project Director for Tallgrass, outlined plans to build a series of natural gas-fired turbines and fuel cells on-site to generate the up to 2.7 gigawatts of power for Crusoe's data center. The total investment from Tallgrass is estimated at $7 billion, while Crusoe's potential investment could exceed $50 billion. The facility, located south of Cheyenne, could eventually scale to a staggering 10 gigawatts.
Company executives emphasized a "Bring Your Own Power" (BYOP) model, asserting the project would not draw power from the local public grid, thereby protecting utility rates for Wyoming residents. Matt Field, Crusoe's Chief Real Estate Officer, stated, "We're bringing our own power. We're not trying to get the physical infrastructure that's here to bring us power." Regarding water use—a critical concern in the arid region—Field explained a closed-loop cooling system would be used across five buildings totaling up to 800,000 square feet. The initial water fill would equal that used by 20 households, with annual ongoing use equivalent to less than three households, sourced from deep groundwater wells not connected to local aquifers.
However, the project's promises face scrutiny. State Senator Cale Case (R-Lander) questioned the long-term viability of the off-grid model, noting the "million-dollar question" is whether the facility will eventually need to connect to the existing grid. "If they do connect to the grid, then the question becomes what happens if their own power generation comes up short," Case said, warning that utility customers could face higher costs if the grid must scramble to supply the data center. Drew Perkins, Chief of Staff for Governor Mark Gordon, indicated state officials are aware a future grid connection is likely and are working on tariff structures to ensure associated costs are borne by the developers.
The project is also framed within a national security context. Perkins told commissioners that Wyoming was part of recent federal meetings discussing the U.S.-China artificial intelligence race, described by officials as "the arms race of our generation." He noted that such data centers are seen as crucial infrastructure for maintaining U.S. competitiveness.
Economically, the project promises significant investment and tax revenue but may coincide with a shift in state tax policy. Senator Case revealed the legislature is considering replacing local sales taxes on electricity with a state-level gross receipts tax. This change, aimed at ensuring equity between fossil fuel and renewable energy contributors, could reduce direct fiscal benefits for host cities like Cheyenne.
With its unprecedented scale, Project Jade highlights the complex trade-offs between technological ambition, local resource management, and economic policy as data center growth accelerates in energy-rich states.
Source: cowboystatedaily
