The recent explosion in data center development is raising similar issues to those faced by oil and gas companies during the shale revolution of the last twenty years.  As with oil and gas development, data centers require large tracts of land, energy, and water to operate.  And as with shale development in less rural parts of Texas, the interests of data center developers can collide with other public interests.  All things old become new again. Based on these similarities, data centers are likely to face similar issues, such as nuisance claims, disputes over road use and surface access, challenges connecting data centers to power grids, and the like.  

A recent nuisance complaint filed by residents of a Mississippi suburb against a data center typifies the wave of claims data centers will likely face in the near future.  The complaint alleges that a massive AI data center generates a “persistent and intrusive noise” around the clock, in violation of local noise ordinances.  Nuisance claims such as this were common in the oil patch and will likely be common with the rapid expansion and development of data centers.  

Looking to the recent past and the issues faced by oil and gas developers can help data center developers mitigate these risks.  One commenter has noted that, again taking a page from the shale development playbook, a coordinated effort with local regions and communities surrounding projects is the key to minimizing litigation and dispute risk associated with these projects.

Reed Smith has deep experience representing data center developers and is uniquely positioned to assist with risk mitigation by bringing its experience and knowledge learned from helping oil and gas companies through similar claims. 

For questions, please contact the listed author or the Reed Smith lawyer with whom you regularly work.