One Half of Oregon Is Crawling With Data Centers

A new study by Portland consultancy ECOnorthwest and the University of Virginia reveals Oregon has two distinct data center profiles based on geography.

“We don’t just have one Oregon data center story; we have two Oregon data center stories,” says Terry Wirkkala, project director at ECOnorthwest, which on Thursday released a 135-page study intended to provide Oregonians and policymakers with reliable information on an exceedingly controversial subject. “The data center debate can quickly get reduced to a single number, whether it’s tax incentives, land use, jobs, or electricity use, but none of those measures tells the whole story.”

East of the Cascade Mountains, Oregon has a mature data center market dominated by massive hyperscale facilities. Of the 2,630 people employed in Oregon’s data center industry, 2,205 live on the east side of the mountains; 67 of 70 data centers in Eastern Oregon are considered huge “hyperscale” facilities. And based on analysis by S&P, the state is projected to see a 12% increase in square footage by 2030 and nine more facilities.

But west of the Cascades, Oregon has a less-developed data center market consisting mainly of retail and telecommunications-type facilities. It employs 425 direct staff but expects an 80% increase in square footage by 2030 with 23 new facilities in the development pipeline.

Data center development has expanded rapidly in Oregon to where there are now 111 operational data centers across 22.1 million square feet in Oregon and 32 proposed facilities at some stage of development. But they’re also now subject to major public backlash in Oregon and beyond, with opponents on either side of the political divide.

One common argument against data centers is that aside from initial construction and despite their massive cost, they employ relatively few people. Data centers account for 0.2% of statewide employment and 0.5% of statewide wages. By comparison, the semiconductor industry accounts for 2.2% of statewide employment and 5.4% of statewide wages.

The study, which was funded by the Lemelson Foundation, determined the data center industry’s true fiscal impact is elusive due to fragmented evidence and inconsistent terminology.

“While tax abatements are common, it’s unclear if these incentives are the primary driver for site selection over other factors like climate or power access,” Wirkkala says.

Beyond the information presented, the study identifies key gaps in information available to policymakers, noting a significant lack of precise data regarding water use and electricity consumption. Other gray areas include the full fiscal relationship between data centers and host communities, and payments and investments made by data centers.

A day earlier, on Wednesday, the Portland City Council approved a resolution that urges the city administrator not to enter into nondisclosure agreements with data center developers. An amendment to the resolution states the council intends to pursue “moratorium or zoning restriction on all hyperscale data centers at the earliest time and to consider additional approaches for large-load data centers.”