Appeals board lets BLM reconsider its approval of a Boulder City data center on federal land, ruling against the city

What happened

The Interior Board of Land Appeals is letting the Bureau of Land Management take another look at a proposed data center on federal land in Boulder City, the Las Vegas Review-Journal reported. The decision came weeks after the board determined that the agency's original approval likely violated federal law.

The BLM asked the board earlier this month to set aside its previous approval of the project, known as Townsite Solar 2. Administrative Judges David Gunter and Clifford Stevens signed the order granting that request on Thursday, according to the Review-Journal.

Why the approval was challenged

A transferred environmental review

In approving the data center, the BLM used what the Review-Journal described as a first-of-its-kind maneuver. It shifted a federally mandated environmental review done for a solar project over to the data center. Conservationists across the West protested the approach.

The new order reaffirms the judges' view that the two projects were not "substantially the same," as BLM officials had concluded. The judges also repeated that they were likely to find the transfer violated the National Environmental Policy Act. Gunter relied on that reasoning in September when he granted a request from the city and environmental groups to halt construction.

Boulder City lost this round

The order is a ruling against Boulder City. The city attorney had argued that granting the BLM's motion would not necessarily guarantee a proper environmental assessment. The judges responded that the city could seek review "if and when BLM approves that application." They added that the board did not need to supervise an ongoing proceeding in which the bureau has not yet made a decision.

What the parties are saying

Developer and agencies

Representatives for Townsite Solar 2 said in a Monday statement that the developer welcomes additional review to resolve concerns raised during the appeal. The project is associated with Houston-based Skylar Capital Management. The BLM declined to comment, citing its policy on pending litigation, and a Boulder City spokeswoman did not provide a statement before publication, the Review-Journal reported.

Conservation groups

Patrick Donnelly, Great Basin director at the nonprofit Center for Biological Diversity, said his organization celebrates the ruling. Unlike Boulder City, the Center and the Sierra Club did not protest the BLM's request to set aside the approval. "There should be no data centers on public lands anywhere, and the fight will continue in Boulder City," Donnelly said in a statement reported by the Review-Journal.

Water, power and public opinion

To comply with the Southern Nevada Water Authority's ban on evaporative cooling, Townsite Solar 2 planned to use either air cooling or a closed-loop system that only needs to be filled once, according to the Review-Journal. Developers have said they did not plan to draw power from Boulder City's municipally owned utility.

The Review-Journal reported that the dispute reflects increasingly hostile voter sentiment toward data centers this election cycle. A recent poll found more than half of Nevada voters across party lines oppose large, hyperscale data center development in the state. Voters have raised questions about water supply and power sources. Other concerns include siting, noise, and air pollution from backup generators.

The same parent company had proposed a hyperscale data center and natural gas plant near a master-planned community in Henderson. It told the Review-Journal late last month that it was no longer pursuing that project. The Boulder City case also prompted Rep. Dina Titus, D-Nev., to introduce a bill requiring full environmental reviews before a data center can be sited on public land.

What to watch next

• The BLM's further review of Townsite's application. The judges' order says the bureau has not yet made a decision.
• Whether Boulder City seeks review if the BLM approves the application again, an option the judges said would be available.
• Rep. Dina Titus' bill requiring full environmental reviews before data centers can be sited on public land.
• Continued opposition from the Center for Biological Diversity, whose Great Basin director said the fight in Boulder City will continue.