Amazon’s eastern Oregon expansion sends carbon emissions soaring

The electric utility serving Morrow County, Oregon once had some of the cleanest power in the state.

Relying primarily on nearby hydroelectric projects on the Columbia River, the electricity sold by the Umatilla Electric Cooperative emitted only 3% more carbon than the state average.

Then Amazon came to town.

The company has built a succession of large data centers in Morrow and Umatilla counties in Oregon, funded in part by local tax breaks, and industrial energy consumption in the region has quadrupled. Although Amazon is not solely responsible for the increase, the additional energy consumption corresponds to the annual household electricity consumption of 200,000 homes.

Even as carbon emissions have skyrocketed along with energy use, Amazon has racked up tax breaks worth more than $160 million for its data centers in eastern Oregon. This has created a disconnect between state policies designed to encourage clean energy and tax breaks that set no such requirements for large energy consumers.

“There’s really no room for a tech giant to contradict this and uphold this goal,” said Joshua Basonfin of Climate Solutions Oregon, who helped lead the campaign for landmark climate legislation that lawmakers of Oregon adopted last year.

What happened to Umatilla Electric’s carbon profile is striking.

Carbon emissions per megawatt hour have increased 543% since 2010, shortly before Amazon took over. So not only is energy consumption increasing, but each megawatt of electricity has a far greater climate impact than before Amazon arrived.

The reason the power mix is ​​so much dirtier, according to the utility, is because demand for electricity is now much higher than Umatilla Electric’s federal clean hydro allocation.

The Bonneville Power Administration allocates power generated by the Columbia River dams to utilities throughout the region based on historical demand and other factors. Umatilla Electric, a small cooperative, receives about 1.6% of this production.

Beyond that, Umatilla Electric must purchase whatever is available on the open market to meet the growing demand for electricity from data centers. This market power has a carbon profile that resembles natural gas – a major contributor to climate change.

The inherent tension between local tax breaks and broader climate goals has largely escaped notice. But environmental advocates say they could push for legislation that would force tech companies to power large server farms with clean energy.

Disagreeing policies

Oregon lawmakers set ambitious climate goals last year with landmark legislation that aimed to transition the state’s utilities to clean energy by 2040.

The legislation is among the most aggressive in the country, banning new fossil fuel power plants and requiring existing generators to start cleaning their electricity almost immediately.

However, as Oregon moves forward on climate mandates, some of the state’s biggest tax breaks are eroding its progress.

Data centers run by many of the nation’s biggest tech companies — including Amazon, Apple, Google and Facebook — are getting property tax breaks collectively worth hundreds of millions of dollars.

The incentives come from the Enterprise Zone and Strategic Investment Programs, which are two state programs that exempt them from property taxes that other businesses pay.

Local authorities, usually city and county governments, broker the deals in exchange for jobs, capital investment and compensation payments. The state sets few limits on transactions.

As a result, Oregon has long enjoyed some of the nation’s largest tax breaks for data centers. This is a big part of why many of the biggest tech companies in the world have server farms in remote corners of the state.

But the state can’t use the huge tax breaks to encourage big energy consumers to use cleaner energy because the incentive programs, which date back to the Reagan administration, set no environmental targets.

Some companies, including Apple and Facebook, have voluntarily funded solar or wind projects in Oregon to offset the energy consumed by their data centers.

Amazon’s energy consumption in eastern Oregon is a different story.

Umatilla Electric says its industrial electricity sales rose from 1.1 billion kilowatt hours in 2016 to 4.1 billion last year, a period of rapid growth in Amazon’s local footprint. Residential and agricultural electricity consumption increased little during this period among Umatilla’s customers.

Amazon has built major clean energy projects in Canada and the southeastern United States, but not in Oregon, Washington or Idaho.

The Seattle-based company declined to discuss its energy use in Oregon, but said it had set ambitious clean energy goals around the world.

“Amazon is the world’s largest purchaser of renewable energy, and we are on track to source 100% renewable energy to power our operations by 2025,” the company said in a written statement.

The company said its data centers are 88% more efficient than those these companies use to store their own data, and it recycles 96% of the water it uses to cool its data centers. Amazon, however, did not specify how it would obtain renewable energy for its eastern Oregon operations. And in 2014, as it began its rapid expansion in Morrow County, the company successfully lobbied Oregon lawmakers to relax clean air standards.

Calls for cleaner energy

Bob Jenks is executive director of the Citizens Utility Board, which oversees state energy policy on behalf of residential electricity users. He said the rise in carbon emissions at Umatilla Electric reflects the western power grid’s reliance on natural gas, a carbon-intensive form of electricity.

Given that Oregon’s tax breaks are playing a big role in luring Amazon to the region and the state is aggressively pursuing cleaner energy, Jenks said it stands to reason policymakers should push for data centers use cleaner energy.

“People should pressure Amazon,” Jenks said. “Amazon should have an interest in having these factories, these server farms powered by renewable energy.”

While Oregon’s tax breaks have attracted some big energy consumers, they’ve also helped fund big clean energy projects, including massive wind farms and solar projects in Morrow County.

It is therefore not the tax breaks themselves that generate carbon emissions. It’s the lack of guidelines to ensure incentive recipients comply with Oregon’s broader climate goals. For Basonfin, this is an obvious failure of state policy.

“If a tech company with all its resources still has very high levels of emissions, we shouldn’t reward that with tax breaks,” he said.

Given the enormous amount of energy used by data centers and the resources available to large companies like Amazon, Basonfin said Oregon should ensure that recipients of tax breaks don’t go to waste. contrary to the state’s climate objectives.

“A trillion-dollar company could afford it if they were serious about it,” he said.

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