[00:00:00] Welcome to the Powering America Podcast. I'm Brian Hyde. I'm happy to welcome Ross Marchand, who is the executive Director of the Taxpayers Protection Alliance. Um, to, to the program. Ross, it's, it's great to have you on, uh, for those meeting you for the first time. Give us a little bit of your background. Tell us a little bit about what you do. Sure. So I'm the executive director of the Taxpayers Protection Alliance and what TPA does, first and foremost, they hold government accountable. We keep bureaucrats honest, and that's especially important when you have energy and electricity prices that are surging in large part due to fail. Not only federal, but state and local policies. And today we have you here to talk about something that I'm encountering a lot in, in casual conversation as well as I see this, uh, becoming kind of a, a heated issue in, in many, uh, local and state, uh, political races. And that is, uh, data centers and, and there's, there's a lot of concern. There's, uh, a lot of, uh, fear out there about data centers. Hopefully we can set some of those things straight and maybe bust a few [00:01:00] myths in the process. Sounds good. So first of all, let's, let's just kinda set the, the groundwork here. When we talk about a data center, what exactly does that encompass? You know, so much of this conversation is talking about data centers in the context of ai, but I mean, more broadly speaking, data centers are responsible for facilitating the whole digital ecosystem. And you know, as long as there are things like internet, right? And you don't, you could use AI all the time. You could never use ai, but no matter what, right? You're using the internet, you're a part of the modern economy, you're a part of the modern digital domain. Data centers are essential for powering that. Yeah, I, you know, it's, I, I think back to, I remember when the, when the internet, you know, really kind of came into its own and suddenly, you know, everybody was using dial up to access the internet, but we still didn't really have a clue of how much it was going to change our lives. And, you know, flash forward 30 years and it's like. How could we do anything without, you know, connectivity, you know, right there in the [00:02:00] palm of our hands with our phones, let alone, you know, what we use at home or, uh, in business. Um, talk to me a little bit about, uh, how data, how data centers have, have played into, you know, the, the growing technological advancements, and then let's talk a little bit about the backlash against that and, and, and where that's coming from. Yeah, sure. So, I mean, over the past 20 or 30 years, the internet has just become so indispensable to anything, right? You name any activity, right. The internet is right there. We're relying on it. I mean, I know me for my job, and you, I'm sure for your job, we rely on the internet for basically everything. And of course ai, is that on you? Hyper speed, right? Turbocharge. Um, but again, whether you're using AI all the time or never at all, you know, you're using internet, you need some sort of infrastructure to support that internet, right? And that's where things like data centers come in. But the problem is, um, state and local policy especially, but also federal policy have just not kept pace with these technological [00:03:00] advancements. And when you have these policymakers that are. Um, you know, risk averse is the understatement of this entry. And they're just hostile, they're downright hostile to these data center operations and, and building out these data centers, um, and deploying ai. There's so many myths and misunderstandings out there, and it's holding back data center operations, data center deployment, and internet and ai. And we're losing ground to China and we're not living up to our full potential. I mean, AI will transform our lives for the better. I sincerely believe that, but only if we have the infrastructure to support it. No, that that makes sense. And you know, I, I want to. I, I guess I, I'm gonna oversimplify this, but that's because I'm not as steeped in this as, as you are. But if people want to continue to enjoy the, the conveniences and advantages of having access to, uh, to data. You know, in whatever form, you know, right there at their fingertips, we've gotta learn how to, to, uh, accomp accommodate that to that [00:04:00] infrastructure. But there's concern about the, the way that it uses resources. And now I'm gonna hit you with a couple of the, the main ones I hear. Number one, data centers will consume way more electricity and they'll take it away from the people who need it or, um, the right on its heels, it'll consume water that is desperately needed for the population. Um, you've probably heard those objections before. Yeah. How do you answer those concerns? So it's all about context, right? So what opponents of ai, opponents of data centers, what they'll say, what they'll lead with is they'll start with really scary sounding numbers and they'll say how many gallons of water data centers are using? And they'll talk about all the kilowatts of electricity that are being used for data center and AI operations. But the key is. You know, you have, you know, especially think about water for example. You have things like hotels, you have things like golf courses, and they're using more water on average than data center operations. And somehow that's never brought up in the conversation. I mean, national electricity use, we're talking less than [00:05:00] 5% for data center operations, and that's so out of lockstep with what you hear in the conversation. Not only that, but you have. Um, well regarded, you know, national studies analyses by reputable institutions like Berkeley Laboratory, and they're all saying the same thing, which is there's no reason to assume that these data center operations are driving higher electricity prices. It could actually work. In the opposite direction. And then you see states like North Dakota, they're being very aggressive with rolling out data centers. And guess what? Their electricity price increases are muted compared to the rest of the country. And all this somehow gets lost in the conversation. Talk to me about some of the extraordinary measures that, uh, various either cities or states have taken to discourage data centers from, from going into those areas. Yes, on the extreme you have states like Maine that are just finalizing bans on building new data centers. Um, and for every Maine you have a bunch of [00:06:00] states that are going to heavily restrict, so, for example, require water offsets because, and that again, that's feeding into the myth that, um, water uses out of whack with data center operations, um, and all sorts of auditing standards. And again, it's. Singling out a technology that people are afraid of. Policymakers sometimes very oftentimes don't understand. And again, the question becomes, so are you voicing all these requirements onto hotels, onto golf courses? And the answer is no, because data centers, um, are the big scary thing that everyone is talking about. But unfortunately, policymakers just don't understand. Interesting. Now, uh, you had mentioned in, in electrical capacity, like for instance in North Dakota, it's, it's. It's not taking away or, or drastically raising the cost. Talk to me about, um, self-powered centers. I, I've, I've heard of it, but I don't know. The first thing about it are there are, is there the possibility of data centers that could be self powering? Yeah, it's a really interesting question. And you have states [00:07:00] like West Virginia that are saying, look, um, you, uh, data center operations will traditionally rely on grids. And if people are concerned about that, then so be it that you can have the option to go and make your own grid, create your own electrical infrastructure. Um, and that way you are taking out of the equation all these arguments about electricity, right? So even assuming that, you know, data centers are overwhelming the grid, which. For the record, I absolutely do not believe is the case. Then you can take it and you can build your own power generation infrastructure. So you have states like West Virginia that are leading the way to do just that. And when, when it comes to creating their own grids. I'm just curious, what are some of the methods by which they, they would power them? I mean, are, are they using, you know, geothermal energy? Are they, they tapping into hydro energy? Are there anybody, is there anybody looking at, you know, small modular nuclear. Yeah. And really the answer is all the above in terms of what these operations are looking into. And it's really [00:08:00] important that federal, state, and local policy that they all allow that to happen. Because you can easily have a situation where state government says, you know what? Well, we're gonna allow this, but only for a particular source of power. Um, and then it just turns out to be completely inadequate. And then the whole thing blows up in their faces. So it's really important, something that TPA has emphasized from day one in this conversation. You really need to have an all the above approach and not single out or favor or put any power generation source on a pedestal. And it seems like one of the concerns that I've heard too comes down to accountability in terms of, uh, whoever owns or, or wants to construct the data centers. Um, the, the concerns I hear sometimes from people as well, you know, is it some big shadowy corporation? I mean, you start thinking of James Bond villains and whatnot. Who wants to put this, uh, data center in, you know, in our, in our beautiful locale? And, and who's gonna benefit from it? Um, generally speaking. Is there a particular type of of [00:09:00] company or does this actually go across a broad spectrum of manufacturing, et cetera? I mean, it really cuts across a very sort of wide array of the US economy and the people who will benefit, you know, vastly outnumber some of the incumbent interests that won't benefit. So customers are gonna benefit from greater internet connectivity. They're gonna benefit from better and faster AI use, but it's not just about, you know, doing a query in Claude or Chat EBT. It's also, for example, about finding, uh, lifesaving medication. So researchers have made tremendous progress over the past couple of years using applied AI applications to find and bring new drug compounds and therapies to market. So I mean, that just that one application among many, I mean, that shows the significant benefit data centers and AI can bring to really all American. I don't wanna sound all starry-eyed, but the way you describe it to me, uh, makes me feel [00:10:00] like we're on the cusp of, of something that we haven't even begun to imagine just how far the, this may carry us and it feels like this is a, there's a great advancement that's taking place here, but, but we only begun to hint at the possibilities of what it could bring. Yeah, that's right. And look, there are, and have been so many technological advancements and thresholds where it's really hard to see the other side. So, you know, back hundreds of years ago, on the eve of the industrial Revolution, we knew that there was some promise to applied industrial technological capabilities, but we could not have predicted that, for example, we're talking now on a Zoom call. Um, the possibilities are truly endless and we have barely scratched the surface. So, where can people get good information? And I, I know when there's a polarizing issue, you know, um, there are self-serving, you know, sources that will step forward. 'cause it's all about the clicks or monetizing, you know, their message. But if people wanna become really better informed about data [00:11:00] centers, what they are, what they can do, um, the good and the bad, what, what's a good resource that they could turn to to, to get that understanding. Well, one great place to start is our website, protecting taxpayers.org, and we've been trying to cover, you know, all aspects to this issue. So, um, I, I'm curious, the political environment is always a little bit volatile, but, um, what do we see? Generally speaking from either state level or federal level politics, um, you know, politicians, uh, tend to be a little opportunistic. Do they see potential with this? Do they, do they wanna fight back against it in terms of, you know, just going for control? I, I'm curious how, uh, how is it being received by the political class? Look, there are a bunch of political trends that are happening and converging and diverging all at once. So unfortunately, and I don't wanna be too doom and gloom, right, but just to put things in context, especially the state and local level, you have a lot of efforts to [00:12:00] thwart data centers and to thwart AI and to put all these new rules and regulations to harm that development. And by the federal level, uh, to President Trump's credit, you know, the Trump administration has really been on the forefront of saying. You know, we can't have 50 different rules or for that matter, 10,000 different rules governing ai and therefore, uh, we should have a clean federal framework in place, right? National standards, just wipe the slate clean of all this state and local regulatory gunk, right? And start from scratch and have a light touch common sense regulatory approach. Now, Congress needs to do that, but the Trump administration has been pushing hard for that, and that is most certainly a welcome to develop. Uh, and I think you, you alluded to this earlier, um, there, there is a, a concern and, and I think rightly so, that uh, if, if we're dragging our feet on this, there are other nations, for instance, and I, I'm, I'm just going to label them, competitor nations rather than, you know, adversarial nations, but, uh, China, among others, uh, that [00:13:00] they're, they're moving full steam ahead. What, what do they know or what do they understand that we apparently don't yet understand? Well look, you know, it's a complicated question that deserves a complicated answer, but to start from scratch, you know, we're talking about AI and data centers and, and things towards the end uses of those services and operations and products. But even just going back from the start, a lot of our, you know, as you put a competitor countries, what they realize is that the easier you make things like power generation, energy generation, the better, faster, cheaper, more accessible. AI services are going to be, and the problem in the US what you see is that, you know, in certain states, especially in the Mid-Atlantic, uh, what's called the PJM region, you have these really strict state level rules holding back. The ability of utilities, for example, to own power plants and generate their own power. And there's a good amount of research showing that that increases, um, the [00:14:00] price of electricity especially. So, you know, you hear all the time that electrical price increases that has been concentrated, the states with the toughest rules restricting who could generate power. So I think other countries understand intuitively, hey, uh, we need to make power as. You know, cheap and abundant as possible. So I think that America could take a page from their approaches and, you know, liberalize who can generate power. And also, you know, America is a very litigious society. So, um, you know. Taking a critical look at the ability of, um, of people to bring claims in state courts about, um, you know, about climate change, which, you know, these lawsuits, I mean, they're all encompassing. It's basically just backdoor of regulation and it harms consumers and it puts us at a competitive disadvantage. It sounds like a, a basic lesson in economics might come in handy here in the sense that, um, this, like so many issues. It's hard to define in, [00:15:00] in terms of just look, there's a winner and there's a loser here. What there are, are trade-offs and, and so could we take a moment here, just kind of examine what are some of the trade offs, um, that, that come along with, with accommodating data centers, you know, um, what, what kind of trade-offs do we need to be looking at? And, and finding that middle ground where you know, it, the benefit isn't outweighed by the cost. Well, you know, a big cost that gets overlooked. So, you know, people talk about the environment. We cover the water and electrical use of data centers. So that's all been talked about to death. But I think what people aren't talking about, taking a step back, the public concern now. Public concern that's unaddressed. I mean, that is undoubtedly a major cost. So unless we address the public's concerns, right? And we, and we do basically what we're doing now and we're myth busting, we're putting the public at ease. And we're saying, you know, here are the facts about data centers in the environment, for example. Um, then that's a big way that we address those costs and we keep those costs at a minimum. 'cause as far as I'm concerned, that's the, the largest major [00:16:00] cost, you know, unresolved public concerns. We need to get in front of that and make sure that people have the answers and the information they need. Love it. Again, we are talking with Ross Marchin. He is the, uh, executive director of the Taxpayers Protection Alliance. And, uh, Ross, what was the website once again for, for people who wanna check this out for themselves, protecting taxpayers.org. Very good. Thank you so much for joining us today on the Powering America podcast. Thanks. Great to be on your show.