Alaska Approves 50-Year Land Lease for 715-Acre Natural Gas-Powered Data Center on North Slope

The Alaska Department of Natural Resources on Tuesday approved a 50-year land lease for a proposed large-scale computing data center on the North Slope, marking a significant step toward what would become the state's first large-scale commercial computing facility. The site sits near the Dalton Highway, the trans-Alaska oil pipeline and the proposed trans-Alaska natural gas pipeline, placing the project at the intersection of Alaska's energy and industrial infrastructure.

In its final approval, the department determined that the lease serves the best interests of the state, though additional permits — including a federal wetlands permit and a state air quality permit for the power plant — will be required before construction can begin. The proposed "STAK Energy Campus" is estimated to require approximately $500 million in initial site development costs, with buildings and supporting infrastructure that include a multi-gigawatt natural gas power plant fired by gas produced locally on the North Slope. The complex is expected to cover about 715 acres and would be air-cooled rather than liquid-cooled, raised above a gravel pad to allow Arctic air to circulate above and below an array of modular computer buildings.

The department acknowledged the unusual nature of the proposal, writing in response to public comments that "this proposed development presents circumstances that are, in important respects, without direct precedent in the State's historical management of its lands and resources." To date, Alaska has no large-scale commercial computing data centers. The facility would not be tied into the electrical grid covering Alaska's Railbelt, though operators could sell power to customers in and around Prudhoe Bay.

According to the department, construction is expected to require a peak workforce of up to 1,500 workers, while ongoing operations are anticipated to employ between 50 and 150 permanent personnel on rotating shifts. The state intends to charge the data center's owners a fee based on the amount of electricity produced and consumed by the facility, as well as rent on the land, with amounts to be determined after market appraisal. Construction on the privately financed project is expected to take six years, according to information shared with department officials.

The approval followed an extended public comment period earlier this year that drew more than 1,200 responses, most in opposition to the proposal. Many commenters raised environmental concerns, which the department addressed in a 30-page response filed alongside Tuesday's approval. On water consumption, the department noted that STAK's Cumulative Impact Analysis estimates the air-cooling approach will reduce direct operational water consumption by 90 percent or more compared to evaporative cooling at lower-latitude data centers. Regarding noise, the department wrote that the facility "will be visible from the Dalton Highway at roughly one mile and will operate a 1-3 gigawatt generation system, producing continuous turbine, cooling, and equipment noise that could carry across several miles of flat Arctic terrain," but said any noise must be weighed against the data center's location within the busy industrial corridor connecting the Prudhoe Bay oil fields to the rest of the state. The site is 60 miles from the nearest inhabited town, and its buildings and a supporting gas pipeline are designed to avoid impacts on nearby caribou.

On concerns about STAK's financial capacity to complete the project, the department said such matters fall outside its purview, writing that the division is "not obligated to conduct a general corporate or financial investigation beyond what bears on the decision of whether the proposed disposal is in the best interest of the state." As for the 50-year term, the department explained that the length reflects the capital intensity of the development — a project requiring approximately $500 million in initial capital expenditures, a multi-year construction buildout and an operational life extending well beyond that buildout — necessitating a lease term long enough for STAK to recover its investment and operate the facility over its designed useful life. On greenhouse gas emissions from the natural gas power plant, the division stated it is not the agency responsible for establishing or enforcing emission standards or making technical determinations regarding climate change.

Tuesday's decision is subject to a 20-day reconsideration period and could be challenged in court. If no challenge is filed, the project may advance to the next phase of permitting. For Alaska, the approval signals a potential new chapter in the state's long history of energy development, pairing North Slope natural gas with compute infrastructure in a region that has historically lacked commercial data center capacity.