McKenzie County has long been a hub for energy, oil, and agricultural production. Today, natural gas is also becoming a bigger part of the conversation. As more gas is produced alongside oil, the region needs ways to put it to use, or risk it becoming a constraint on future oil production. Data centers are one potential use, offering a way to convert excess natural gas into long-term economic value.
A data center is a secure facility designed to store and process digital information, serving as the backbone for critical services such as banking, healthcare, streaming, cloud computing, and artificial intelligence. These centers enable the seamless operation of technologies relied upon in daily life.
Early data centers in North Dakota typically operated as single-use facilities running at a constant high power load. Their designs often did not take local community expectations into account and lacked flexibility.
In contrast, modern data centers have evolved to:
Modern facilities integrate community-focused features, including:
These advancements make data centers more compatible with local communities, balancing technological needs with ecological and social considerations.
In oil-producing regions like the Bakken, natural gas is a valuable byproduct of oil production. Today, western North Dakota is producing more natural gas than we can use locally, forcing much of that excess to be burned or flared away at well sites, which can limit future oil production. Data centers are one opportunity to help create a steady local demand for natural gas by using it for both base load and behind-the-grid power generation. Extensive studies are performed to ensure any facility connecting to the electric grid does not jeopardize the reliability of other users and that these large load users cover their costs for energy needs.
Increasing natural gas use benefits the region by:
Data centers demand significant electrical power, which has raised concerns about potential impacts on local electricity rates. To address this, Basin Electric Power Cooperative, the power supplier of McKenzie Electric Cooperative, has implemented the Large Load Commercial Program.
Basin Electric and its member cooperatives are committed to providing reliable, affordable power. Today, the cooperative is entering a new era of growth. Requests for electricity are arriving faster and at a much larger scale than ever before, with some single projects seeking 50, 100, or even hundreds of megawatts. For perspective, that’s more than the total usage of many cities in Basin Electric’s service area.
To meet these increasing demands, Basin Electric is taking steps to protect its members from the rising costs associated with potential large loads. The Large Load Commercial Program, adopted by Basin Electric’s board in June 2025, is the first step towards safeguarding its members.
Data centers are frequently perceived as heavy water consumers. However, their actual water use greatly depends on the type of cooling system implemented. Modern designs, especially air-cooled and closed-loop cooling systems, can reduce water usage by over 70% compared to traditional methods.
Cheyenne, Wyoming, a notable hub for data centers, shows that combined water consumption from these facilities represents only 1.2% of the total city water use. This figure challenges the common assumption that data centers are major water consumers in local communities, indicating a relatively minor footprint when efficient cooling technologies are utilized.
A comparison for data center water usage can be drawn with North Dakota’s fracking operations, where 700-1,000 wells are drilled per year in the Bakken with 8.5 – 10.5 million gallons of water being used in a single frac. In contrast, an entire dry-cooled data center uses roughly 1.6 million gallons per year, substantially less than the water requirements of a single fracking well.
In places like Cheyenne, Wyoming, data centers have operated for over a decade with minimal disruption to surrounding communities. With thoughtful planning, such as placing facilities in existing industrial zones, impacts can be managed while still delivering local investment and enhanced tax revenue to the region.
Data centers produce a steady, low-level sound primarily from cooling systems. However, noise levels are predictable and can be reduced through intentional site design, screening, and other methods.
During normal operations, data centers do not produce ongoing process emissions. There is no flaring, continuous combustion, or heavy truck traffic, and there is minimal on-site activity compared to other industrial facilities.
Where a data center is built matters just as much as the project itself. Current setback requirements in McKenzie County can push development into undeveloped agricultural areas, spreading industrial uses across the landscape. A more modern approach would be to guide data centers toward existing industrial and energy corridors and near infrastructure like power plants, pipelines, and utilities that are already in place.
Clear policies help direct development to the right locations, reducing land disturbance and impact on residents, while helping protect farmland and respecting landowner rights.
McKenzie County’s economy has long been driven by oil and gas. Data centers provide an opportunity to build on this strong foundation and create a new, complementary industry with long-term infrastructure investments. Construction brings hundreds of jobs during build-out, and these facilities often maintain dozens to a few hundred stable, long-term positions during regular operations.
These jobs support the local workforce and provide high-paying, stable job opportunities for future generations. Data center projects can also generate ongoing tax revenue that supports schools, roads, and local services, providing long-term investment and economic impact. The result is a more diversified economy built on what the region already does well.
What does artificial intelligence mean for businesses in our region? Whether it’s agriculture, construction, trucking, or retail, AI can help with everyday tasks like planning, organizing paperwork, communicating with customers, and research. It’s not about replacing skilled workers, it’s about helping them work more efficiently. So where do data centers come in? Data centers are what power these AI tools.
Just like pipelines move energy and fiber moves information, data centers provide the computing power behind AI. As more businesses begin using AI tools, data centers become a more important part of the infrastructure that supports them.
What’s the deal with data centers?
A data center is a secure facility that houses computer servers and technology used to store and process digital information. While the term has become more common recently, data centers themselves are not new. Banks, hospitals, and large businesses have relied on them for decades to support their day-to-day operations.
Across the country, data centers have become a growing topic as demand for cloud computing, artificial intelligence (AI), healthcare systems, and financial networks continue to expand. These facilities are now considered essential infrastructure, similar to other large-scale industrial or energy uses.
Why are we talking about data centers in McKenzie County?
Several companies are looking for locations that can support development and growth of data centers. Places with available energy resources, reliable infrastructure, and a workforce with technical and mechanical skillsets are in high demand. North Dakota, and McKenzie County specifically, checks many of those boxes.
Why would we even consider data centers here?
Data centers can bring long-term investment, tax revenue that supports local services, and a mix of construction and permanent jobs that align well with the skills in the region. McKenzie County also offers a unique proposition for data centers – abundant natural gas.
As oil production continues, more natural gas is being produced alongside it. Without additional ways to use that gas, it can become a constraint on future oil production and tax revenues.
Data centers could help address that challenge by creating steady, local demand for natural gas power generation.
Are all data centers the same?
No, not all data centers are the same. In North Dakota, some early data centers were used for a single purpose, ran at a constant high rate of power, and didn’t always align well with local expectations.
Many of the data centers being proposed today are for essential services like cloud computing and AI. They serve a wide range of industries; operate under long-term contracts; and are designed to be more stable, efficient, and closely integrated with local communities and infrastructure.
Will data centers increase my electricity rates?
In McKenzie County, large energy users are required to pay for their own infrastructure, including power generation and grid upgrades if needed. Programs such as Basin Electric’s Large Load Program are designed to prevent costs from being passed on to existing customers.
Many newer projects also incorporate “behind-the-grid” power generation as part of their facilities. In McKenzie County – our excess natural gas from oil production provides an opportunity for both baseload and behind-the-grid power generation. Extensive studies are performed to ensure any connecting facility does not jeopardize the reliability of others on the power grid, and that these entities cover their costs for energy needs.
Don’t data centers use a lot of water?
A common concern is that data centers use large amounts of water. In reality, water use depends on the cooling system in place, not the size of the facility.
Air-cooled systems use little to no water; closed-loop systems recycle water and reduce use significantly – with some advanced systems designed for near-zero water consumption.
In Cheyenne, Wyoming where data centers are prevalent, these facilities account for only 1.2% of the municipality’s annual water consumption. For additional context, fracking oil wells will use approximately 8.5 million gallons of water per well, while a dry-cooled data center will use 1.6 million gallons annually.
Are data centers loud?
Data centers do produce a steady, low-level sound, primarily from their cooling systems. This sound is similar to what might be heard from other, existing industrial infrastructure like power lines or gas plants. Noise levels are predictable and can be reduced through design, screening, and siting. In places like Cheyenne, Wyoming, data centers have operated for over a decade with minimal disruption to surrounding communities.
Do data centers create pollution?
During normal operations, data centers do not produce continuous process emissions – with limited emissions from use of backup generators only. Compared to other industrial facilities, they typically have a lower on-site environmental impact and little traffic once construction is complete.
How do data centers impact the local economy?
Data centers have an opportunity to be a long-term infrastructure investment that can generate tax revenue for schools, roads, and services; support continued oil production by using natural gas locally; and contribute to economic diversification in the region.
Data centers also create both temporary (construction) and permanent jobs. Temporary construction jobs can be in the several hundreds, with permanent jobs typically ranging from 50 – 200 depending on the size and design of the data center
Where would data centers be located?
Location is determined through local planning and zoning policies. Current setback requirements in McKenzie County could push development into undeveloped agricultural areas. A more modern approach through a zoning ordinance update would help co-locate data centers near existing industrial sites, use existing infrastructure (roads, pipelines, utilities), and minimize the impact on agricultural land and residential areas.
Why does siting and land use matter?
Thoughtful siting through clear and well-thought-out polices allow growth to be planned proactively rather than reactively. Good siting and land use policy will protect farmland and landowner interests, reduce the need for new infrastructure, and keep development concentrated in appropriate areas.
What does this all mean for McKenzie County?
McKenzie County has a unique opportunity to build on its existing strengths – abundant natural resources, established energy infrastructure, and a skilled workforce.
Data centers are not a replacement for oil and gas, they are a complementary use that can help make better use of natural gas already being produced, and support long-term economic diversity and stability.
