Exposing Alberta’s Wilful Blindness to AI Centre Harms

Two years ago, Premier Danielle Smith declared that her government wanted to woo $100 billion worth of data centre investment to the province by 2030 with a bold new strategy.

Smith explained that artificial intelligence was making our lives “better, simpler and safer.” But to succeed, the innovation needed more energy and space. Alberta was open for business because a data centre boom would “foster innovation, create jobs and promote economic diversification.”

AI investor and pro-Trumper Kevin O’Leary immediately championed the policy: “Danielle Smith has the water, she has the fiber, she has the people, she has the policies, she's got the permits that can be gained there, and that's what we're working on.”

Smith’s government waived an environmental review for O’Leary’s $70-billion behemoth, claiming that data centres are not “a mandatory activity for the purposes of environmental assessment.”

The province also axed its water advisory council this year — a move that guarantees no embarrassing reports on the extreme water demands of data centres might question the province’s claim about benefits.

At the same time, the province created a concierge service for AI investors to achieve smooth sailing with regulators and “speed to market.”

Even though North American citizens have increasingly rejected or imposed moratoriums on data centres in their communities for many reasons, the Smith government hasn’t said a word about the liabilities, including noise pollution, heat islands, water consumption, smog and higher energy bills.

Enter Brad Stelfox, the province’s most prominent land use ecologist. He has spent his career studying and modelling cumulative effects of land use over time. The Indus and Area Residents Group, representing members of a small community six kilometres outside Calgary, recently sought his analysis of the Beacon AI Centers Indus Project slated for their locale. The group wanted to know if the province had adequately reviewed the project’s potential effects, as well as wider impacts of the AI boom on Albertans.

Guess what Stelfox found?

The Smith government has not conducted a proper cumulative impact assessment for the Indus area or the province as a whole, concludes Stelfox in a report submitted to the Alberta Utilities Commission. “As such Albertans remain uninformed of the full extent of the environmental and social consequences associated” with AI data centres.

A case study in AI centre impacts

While Smith and industry talk about jobs, tax revenue and economic growth, “there is a striking absence of information in Alberta about the adverse consequences (environmental, social and health) caused by individual or multiple AI/DCs.”

The proposed Beacon data factory is a case in point. The project would occupy 900 acres and require 1.5 megawatts of energy around the clock. That power would come from 100 natural gas reciprocating engine generators organized into modules, exhaust treatment systems and air-cooled radiators. Every year, Stelfox notes, the project would consume half a million cubic metres of water (about 200 Olympic-sized swimming pools) and release 4.78 million tonnes of carbon dioxide into the air (roughly what one million passenger vehicles produce).

Beacon was founded by Nadia Partners in 2023. This U.S. specialist investor in AI doesn’t work like a normal company with public or institutional ownership. Instead, the New York firm, founded by Aidan Kehoe, creates companies solely to build AI centres. These companies are then managed by recruited CEOs.

Beacon has so far proposed to build six data centres in Alberta, including three in the Calgary area, at a cost of $4 billion. (Smith’s government even passed orders-in-council in 2025 so the U.S.-owned Beacon Data Centers could legally buy up to 43 square kilometres of land in 2025.)

Collectively Beacon’s operations will draw 4.5 gigawatts of power from their own natural gas generators. Their electrical consumption alone will represent more than one-third of the entire electrical load in the province.

While Alberta’s government conducted no independent cumulative effects review of the Indus project, Beacon provided its own. So did the federal Impact Assessment Agency of Canada. Both concluded there was nothing for citizens to worry about. As the IAAC put it, “the potential adverse effects within federal jurisdiction, or direct or incidental adverse effects, from the project would be limited or addressed through existing federal and provincial legislative and regulatory frameworks.”

That’s not what Stelfox found. He reviewed the literature and concluded that data centres will present any nearby community with a variety of adverse effects. They include:

• increased water demand leading to increased water scarcity within natural watersheds;
• constant noise pollution, including background hum, leading to hearing loss, insomnia, anxiety and cognitive impairment;
• light pollution leading to loss of dark skies;
• air pollution leading to elevated greenhouse gas emissions and health complications including respiratory and cardiovascular disease; and
• depressed real estate values, leading to losses in home equity.

Stelfox portrays an Alberta government wilfully asleep at the wheel: “The projected frequency and magnitude of the nascent AI data centre sector in Alberta is immense and as such warrants a thorough strategic-level cumulative effects assessment of this transformational and disruptive land use sector.”

The province, he notes, “has not completed such an assessment at either regional or provincial scale.”

In Stelfox’s view, projects such as Beacon’s Indus should be viewed “as analogous to Alberta’s legendary Leduc #1 oil well, which heralded the arrival of a nascent hydrocarbon sector that fundamentally transformed the province’s socio/economic/environmental landscape in the 1940s.”

It took the province decades to admit that the oil and gas sector had liabilities, let alone cumulative effects, writes Stelfox. “To many Albertans, a balanced discussion about this sector has still not yet occurred.”

Sweeping changes for Albertans

Given that more than 40 different proposed facilities are on the books, Stelfox argues that AI data centres are “highly likely to dominate the province’s socio-economic, industrial and natural capital landscape for the next century.”

He adds that data centres for AI “are among the most intensive and resource dense industrial features on Earth — their local density of concrete, metal, heat, electricity, water, sound, cooling, and embedded investment capital ($/m2) is almost unparalleled.”

But Stelfox argues that Alberta has long gamed the process of environmental assessments so that they minimize the liabilities and exaggerate the benefits by examining only one project at a time.

He cites as just one example “the deficient” environmental effects review for the Indus project. It was a cursory review instead of a comprehensive assessment, which doesn’t include or consider, for example, other nearby AI projects proposed for the region that will compound the effects of noise, light, air pollution, property values and urban heat islands.

The review also fails to meaningfully recognize that the proposed Indus site sits next door to Calgary, the largest of Alberta’s cities, and will likely be within the city borders in a couple of years.

As a result, no answers are provided to urgent questions from community groups, such as “How does a rapidly expanding network of AI/DC affect water availability for scenarios that incorporate climate change predictions?” Stelfox includes some “staggering” projections for such impacts if the AI centre sector grows by 15 per cent per year (see sidebar).

To Stelfox it’s no secret why government and industry have resisted adopting proper cumulative effects assessments on data centres. They “fear that its methodological outcome would reveal the magnitude of environmental liabilities, and that this knowledge might interfere with capital investment or economic growth.”

Stelfox isn’t the only expert ringing alarm bells about the failure of governments to do proper cumulative assessments on the AI industry.

This month the City of Hamilton unanimously voted for a moratorium on data centre development so that it can study the adequacy of existing regulations to deal with public concerns about water, energy costs, noise and air pollution. The city called for creating something the Smith government has avoided, “a co-ordinated regulatory framework including municipalities to establish environmental, human and community health safeguards and public disclosure requirements as it relates to AI industry growth and development.”

U.S energy journalist Robert Bryce has catalogued similar resistance movements south of the border. He has created a “Data Center Rejection Database” that shows 89 data centres have been rejected or restricted in the United States this year alone — nearly twice the number rural Americans rejected last year and 10 times the number rejected in 2024. These grassroots protests are spurred by well-documented concerns about water, noise, size and air pollution, according to Bryce.

Bryce has documented, as well, rural opposition to industrial-scale wind and solar projects, a focus that prompts some climate activists to brand him “right wing.” But in a recent Substack column, he notes: “The hostility to data centers and Big Tech is a cultural phenomenon, and it’s unlike anything I’ve seen during my four decades of covering energy, politics, and land-use fights.”

Bryce thinks that because people know they can’t fight Big Tech online very effectively, “they are fighting it at the zoning board.”

Kevin O’Leary, who is said to be worth over $400 million and is pushing huge AI centres also in the United States, has accused grassroots opponents there of being backed by the Communist Party of China, only to later admit he has no evidence, causing Fox News to apologize for sharing his claims.

As Bryce writes, citizens’ motivations for saying no are far simpler: “What I’ve seen over and over again is that people will band together when they perceive a threat to their way of life, their neighborhoods, their property values, and their viewsheds. They will put aside political differences and class differences to fight what they see as a common threat. In that regard, the opposition that I’ve seen to Big Wind and Big Solar is exactly like the surging opposition to Big Tech and data centers.”