Data center project landowner withdraws water right application — temporarily

One of the major private landowners involved in the development of the controversial Stratos Project data center in rural Box Elder County has withdrawn its application to reallocate a large chunk of its water rights to the proposed complex. 

Bar H Ranch Inc. had previously filed with the Utah Division of Water Rights to convert 1,900 acre-feet of water from the Salt Wells Spring Stream from agricultural use to industrial use. The water would be dedicated to “Wonder Valley Utah” and used at the electrical generating plant built to power a massive
data center.

However, on May 5, after the division received nearly 4,000 public protests, Bar H Ranch filed a notice of application withdrawal with the Office of the State Engineer. The withdrawal nullifies all the complaints filed by residents and organizations opposing the Stratos venture.

But the withdrawal does not mean developers are backing away from the project. In an email submitted with the withdrawal notice, water consultant Logan Riley, working on behalf of Bar H Ranch, said the company intends to refile the application soon.

“In light of the county’s action on Monday, we are withdrawing the current change application at this time,” Riley wrote. “Bar H Ranch intends to resubmit in a timely manner with additional supporting information and to further demonstrate the feasibility of the application.”

On May 4, Box Elder County commissioners unanimously approved a pair of resolutions giving the green light to the Stratos Project, a “hyperscale” data center project that is a joint development between Utah’s Military Installation Development Authority (MIDA) — which approved the deal with a series of resolutions in April — and developer O’Leary Digital Utah Development Co., with TV personality Kevin O’Leary of ABC-TV’s “Shark Tank” at the helm. The development would occupy approximately 40,000 acres in western Box Elder County, most of which is unzoned private property.

Each of the protests submitted to the state over the water rights change application required a $15 fee to file. The fees are nonrefundable, creating cynicism among the dissenters. When developers submit their new application, all protests will require a new fee, according to the division. Environmental groups and project opponents criticized the withdrawal, arguing that refiling the application would effectively restart the public protest process.

“The people of Utah, especially those from Box Elder County, filed protests in record numbers because of their concerns about this project,” Ben Abbott, executive director of Grow the Flow and a Brigham Young University ecologist, said in a statement. “For the developer to sidestep the public input process by withdrawing their application and resubmitting later is another breach of trust. I keep trying to give them the benefit of the doubt, but this has all the hallmarks of an out-of-state megaproject with little to no concern for the local community.”

The Utah chapter of environmental watchdog Sierra Club also weighed in on the controversy.

“Over a thousand Utahns showed up to the Box Elder County Commission meeting to voice their opposition to this energy and water-guzzling project, only to be silenced by commissioners who made their decision in another room without taking public comment,” Sierra Club organizer Maria Archibald said in a statement. “Now, after spending their hard-earned money to file thousands of online protests, Utahns are being silenced once again. Developers and elected officials are changing the rules mid-game and shutting the people out of our own democracy in the process.”

MIDA, O’Leary Digital and Box Elder County officials continue to defend the Stratos Project over water usage concerns. Proponents claim that the data center and its accompanying power generation station will not use water currently destined for culinary or agricultural use or reduce any flow to the Great Salt Lake. They say the data center power plant would use a closed-loop cooling system and use just the existing water rights attached to the property.

O’Leary, known as “Mr. Wonderful” in his television role, took to X following the water rights application news broke to address water in particular and environmental concerns in general. O’Leary noted that he graduated from the University of Waterloo with a degree in environmental studies.

“When a group comes to me and says, ‘Look, I have concerns about water, I have concerns about air, I have concerns about wildlife,’ I totally get it,”
O’Leary said.

O’Leary said the public misunderstands the impact of data centers because they were poorly represented in the past, and that the technology powering them has advanced dramatically with modern iterations. He said data centers use much less water than they once did and the Utah project will use the closed-loop system to avoid the evaporation inherent in earlier centers. They can also employ air-cooled turbines to cool banks of computers — the major components of data centers, O’Leary said.