The surge in US data center development has boomeranged on the industry in the form of a consumer backlash, driven by concerns over land use and higher utility bills. The revolt is causing project cancellations and putting at risk potential growth in natural gas demand.
In the Data Center Demand Monitor, East Daley Analytics is tracking more than 500 announced data center projects nationwide, representing over 200 GW of potential electric load (see map). Of these, nearly 400 projects are under construction or still planned. The boom is emerging as a structural driver of gas demand, reshaping regional load profiles and reinforcing the need for new generation capacity. If developers built all ~400 pending data center projects, EDA estimates they would require over 15 Bcf/d of natural gas (see adjusted demand figure below from the Data Center Demand Monitor).
But even as announcements surge, cancellations and delays are piling up. The gap is widening between headline projects and what industry will actually build. We estimate opposition has put more than 7 GW of proposed capacity at risk in the last several months from projects paused, denied permits or tied up in legal disputes.
The backlash stems from three main forces: community and political pushback, slower corporate spending amid oversupply, and infrastructure constraints that limit new gas plants and pipelines.
Local resistance is the most visible challenge. Residents cite concerns over land use, environmental impacts, quality of life, and higher electric and water bills. Communities worry about noise from cooling equipment, constant lighting, heavy water use and the industrialization of farmland and rural areas.
Multiple projects have hit roadblocks. In Wake County, NC, residents mobilized against the 250 MW New Hill Digital Campus, arguing it would double the regional power load and drive up electricity costs. In Monroe County, GA, commissioners rejected the 1.2 GW Bolingbroke campus after weeks of public protests, calling it the “will of the people.” And in Fauquier County, VA, local regulators recommended denial of the proposed 800 MW Gigaland project over water quality and rural character concerns.
Some setbacks are self-imposed. Hyperscale operators are strategically aligning their expansion with market demand to prevent excess capacity development. Microsoft (MSFT) paused its $1B Central Ohio campus, part of a broader decision to defer as much as 2 GW globally. The company already added record capacity in 2024 and is balancing expansion against near-term AI and cloud forecasts.
Data centers ultimately run on the power grid, and in most regions gas-fired power plants support the new load. But that dependency on gas exposes projects to infrastructure and resource risks. New gas plants for large campuses often face years of delay due to permitting and approvals. Those plants in turn rely on interstate pipelines to move supply from producing basins to demand hubs.
Meeting the massive load from data centers will require new infrastructure and pipeline capacity, as many existing systems are already stretched. Nowhere is this more visible than in Northern Virginia’s “Data Center Alley.” Growth there has collided with hard limits: Developers have canceled at least six projects, and PJM, the regional transmission operator, has warned that future developments may need onsite generation because the grid cannot deliver additional gas-fired power. Williams (WMB) has proposed the Power Express expansion on the Transcontinental pipeline to handle the new load.
The retrenchment comes as no surprise to East Daley. We have consistently limited our demand estimate from the emerging data center sector given constraints on pipeline capacity and long queues for turbines and transmission tie-ins. In the Macro Supply & Demand Forecast, we currently estimate 4.8 Bcf/d of new demand by 2030, far short of the 15 Bcf/d potential.
The US data center boom is real, but so is the backlash. Communities argue they bear the costs while gaining limited long-term benefits, and even hyperscale operators are pacing growth selectively. On top of that, new gas plants and pipeline capacity will be essential to support massive loads, yet many systems already face constraints. The upside case of 15 Bcf/d remains possible, but growth will be lumpy, contested and regionally uneven. – Kritika Gaikwad Tickers: MSFT, WMB.
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