Tag: OLeary

A C$70 billion AI data centre project, pitched as a transformative boost for Alberta’s economy, is also poised to drive a significant expansion in oil and gas production if it ever gets built.

At a news conference last month, officials said data centres would play a “significant role” in Premier Danielle Smith’s plan to double oil and gas production by increasing domestic demand for gas. The province plans to to see $100 billion worth of data-centre infrastructure built in the province in the next five years, reports CBC News.

“This is good news for Alberta because it’s going to create significantly increased drilling, exploration, and production activity in rural Alberta, it’s going to allow for increased distribution investment to get the gas to the different markets that need it, and it’s going to generate significant incremental natural gas royalty revenues for the benefit of all Albertans,” said Nate Glubish, the provincial minister of technology and innovation.

Just days later, celebrity investor Kevin O’Leary declared his intention to invest in Alberta’s ambitious plans with a data centre hub dubbed “Wonder Valley”—a project advertised with its own dreamy AI generated video—slated to be built in the Municipal District of Greenview, near Grand Prairie. The project is expected to cost $70 billion over its lifetime, and will include buildings that store and process digital information.

The full buildout of the Greenview area would require the equivalent of about 10% of all the gas supply in Alberta, said Kyle Reiling, executive director of the Greenview Industrial Gateway (GIG) that will host Wonder Valley.

Greenview, which spans around 33,000 square kilometres, sits on the massive Montney Formation, one of North America’s largest gas reservoirs. “That is what it comes down to, it’s about having the feedstock,” Reiling said.

Using this gas, the new, fast-tracked data centres would not be expected to take any power from the electricity grid. In the next phase of the government’s strategy, set to be announced in early 2025, Alberta will partner to connect the data centres to its grid. “When we put this strategy forward, we’re asking these data centres to be looking at bringing more power to the market,” Smith said.

Other possible locations include central Alberta, and in Smith’s constituency around Medicine Hat.

Glubish said there are parts of the province where power demand is low and electricity is being generated without being used. The cost of that “waste” is borne by consumers.

“We believe there are pockets in the province where there’s some great opportunities to introduce data centres that are fit for purpose and will use up that congested supply,” Glubish said.

“The good news for Albertans is that if we get that right, their power bill is going to come down.”

Greenview started planning for this moment 12 years ago, Reeve Tyler Olsen told CBC Radio’s Edmonton AM. The municipal district modelled itself after Alberta’s Industrial Heartland Association, a group of municipalities outside Edmonton working together to encourage industrial investment.

Initially, Greenview had plans for petrochemicals, but eventually made data centres the focus, Olsen said. “Because there’s so much natural gas in the area and the cool temperatures, it just happens to be a great area for [data centres].”

Data centres generate massive amounts of heat and need constant cooling with either water or glycol, which increases the amount of power required to run them. That is, unless they’re located in colder areas like northern Alberta.

Returning to Coal-Era Emissions

As for the impact the power-hungry centres would have on Alberta’s plan to reach net-zero by 2050, Glubish said while operators do have environmental strategies, “what is most important to them right now is speed to market.”

“They need to get this infrastructure built and they need to electrify it and turn it on, and we can help them with that,” he added, suggesting carbon capture and gas would be Alberta’s “most cost-effective net-zero option.”

Wonder Valley’s proponents say it will be powered by both gas and geothermal. But Jason Wang, a senior electricity analyst at the Pembina Institute, told CBC News that geothermal is still a developing technology, while reliance on gas is a “questionable choice for powering data centres.”

“The emissions from these gas plants are also going to be an important factor to think about, because Canada has a goal to decarbonize our electricity grid,” Wang said.

Alberta is going after 6,500 megawatts of gas-powered capacity, which could double electricity emissions “to about the same level as when the province was powered by coal,” warned Blake Shaffer, a University of Calgary economist specializing in electricity markets. Despite those concerns, project supporters remain optimistic. Olsen said the next steps involve securing investment from O’Leary Ventures and purchasing land. O’Leary has been promoting the project, recently telling Fox Business that Alberta’s energy costs are among the lowest in North America. Global data shows countries like Russia, Iraq, and Qatar have much lower energy costs