OPINION:
As the Department of Government Efficiency (DOGE) barnstorms Washington to probe and illuminate federal agency spending, 50 lower-profile fiefdoms are crafting policy proposals and budgets this spring without the fanfare and white-hot light of a national media apparatus.
These budget behemoths, with exotic names such as Wisconsin, Massachusetts and Idaho, collectively appropriated almost $4 trillion in 2024, according to the National Association of State Budget Officers.
In 2025 and 2026, they will likely break the $4 trillion mark.
Frameworks and spending priorities will be tucked into those spending measures. Soon, states will address perhaps the most important issue they have faced in decades: energy generation related to the technology sector.
That issue, perhaps more than any other, will determine each state’s economic growth. The Dallas Federal Reserve said load growth, or demand, for energy, had not exceeded 5% per decade since the 1970s. However, it is now sounding the alarm that energy demand is spiking, driven mainly by data centers’ insatiable need for electricity.
Of course, data centers give states tremendous opportunities for economic growth. Several states, including Ohio and Louisiana, have initiated investment deals with tech firms such as Amazon Web Services and Meta (Facebook’s parent company). Those data centers will create jobs, lure new residents and fill state coffers, all music to state politicians’ ears.
The billions of dollars that tech firms such as Meta, Amazon and Microsoft are raining down in the states are up for grabs. Each state has a chance to suck up that investment as long as it can provide the energy infrastructure needed to fuel the data centers.
Meta CEO Mark Zuckerberg said in a Facebook post last month that his firm intends to spend $65 billion on data center investment and infrastructure.
For states to attract that type of investment, they must guarantee affordable, reliable energy, or they have no chance at a piece of the AI action. Louisiana and Ohio are the front-runners not just because of their existing infrastructure and business-friendly environments but also because of abundant hydrocarbons — natural gas, oil, coal — in the ground.
The allure of “green” energy is passing. It is expensive, inefficient and incapable of powering the growth of the states’ economies. Every state that zealously safeguards its unique capacity to fuel growth will win the AI race.
In his 2024 letter to CEOs, Larry Fink, chairman and CEO of BlackRock, noted that “sometimes the wind doesn’t blow in Berlin, and the sun doesn’t shine in Munich. And during those windless, sunless periods, the country still needs to rely on natural gas for ‘dispatchable power.’ … Without an additional 10 gigawatts of dispatchable power, which might need to come partially from natural gas, [Texas] could continue to suffer devastating brownouts.”
The reality is that “green energy” is incapable of meeting the demands of the tech-fueled economy and is not nearly the panacea of embellished environmental challenges. It is energy built on the backs of Congolese children, Uyghur slaves and the U.S. taxpayer.
As encouraging as Washington’s tone and tenor on energy may be, states can and should secure their destinies by leveraging the natural resources immediately available. By affirming their commitments to their citizens and securing the economic opportunity for Mountaineers, Pelican Staters, Volunteers or Sooners by working with the technology sector, states’ futures will be reliably and affordably bright.
While energy demand remained flat, the grid was a policy afterthought, and its shortcomings were out of sight and out of mind. States now face the reality that energy infrastructure can no longer be set to autopilot or left to environmental activists. They must capture their regulatory framework, just as DOGE does in Washington.
Energy policy must now be a top priority for governors and lawmakers. In 2025, dispatchability and affordability must be the pillars of their policies. States clinging to the old paradigm of faux environmental protection haven’t even laced up their shoes, while states that are drawing investment with their natural resources are racing through the tape.
• Cameron Sholty is director of government relations with The Heartland Institute. He can be reached at csholty@heartland.org.
Please read our comment policy before commenting.