This story is part of our ongoing investigative series, Hidden Wonder Valley.

Celebrity investor Kevin O’Leary’s proposed $70-billion data centre, designed to run on 7.5 gigawatts of gas-fired power, could raise Alberta’s greenhouse gas emissions to levels not seen since the coal era, according to estimates obtained by The Energy Mix.

Planned in an area battling drought, the project’s water needs would also be vast, rivalling the annual use of hundreds of thousands of Alberta households.

Wonder Valley is still nowhere near getting off the ground. But if it ever gets built as planned, it could pump out 25.7 to 30.5 megatonnes of emissions a year, depending on what turbines and gas are used, and whether or not it includes carbon capture, found [pdf] Pembina Institute Senior Analyst Jason Wang, who crunched the numbers for The Mix.

“It would be the equivalent of a return to the era of mostly coal-fired electricity,” said Wang.

The reversal would set the province and Canada back about 20 years, matching the 27 megatonnes of coal emissions Alberta phased out between 2005 and 2023.

The data centre complex, which O’Leary claims will be the “largest on Earth,” would require the equivalent of about 10% of all gas supply in Alberta once fully operational.

It’s still just a concept, but in the Municipal District of Greenview where it’s planned, local officials are confident it will be built.

“We’re about to pull off the largest project in Canadian history in this sector and I think Greenview should be really proud of that,” Chief Administrative Officer Stacey Wabick told council members at a budget review meeting in November.

Wonder Valley was announced with great fanfare last December, a few days after the Alberta government unveiled a new data centre strategy designed to attract $100 billion in investments.

At the time, Innovation and Technology Minister Nate Glubish said data centres would play a “significant role” in Premier Danielle Smith’s plan to double oil and gas production by increasing domestic demand for gas.

The land designated for Wonder Valley is south of Grande Prairie, about 460 kilometres northwest of Edmonton. It’s located on the massive Montney Formation, one of North America’s, and perhaps one of the world’s, largest gas reservoirs.

Wang said the first phase of the project, requiring 1,400 megawatts (MW) of power, would generate about 4.7 megatonnes of carbon dioxide per year using shale gas to run a combined-cycle gas turbine, the most efficient type of gas power. That would make it one of the largest industrial facilities in the province, he said.

Carbon capture and storage has been promised for Wonder Valley, but not necessarily at startup. Wang said a carbon pipeline would need to be built between the facility and an injection site.

“With carbon capture efficacy at about 80%, it would still mean the first phase of Wonder Valley would be 1.3 Mt/year of greenhouse gas emissions,” Wang said.

Huge Water Demand, No Consultation

Another requirement for data centres is the large amount of water they use for cooling. But water is also needed to run gas power plants. Even though the Grande Prairie area is known for longer, colder winters, Wang estimated the water needed for the fully completed data centre, including both cooling and for the power plant, would be between 112 and 195 billion litres per year. That is roughly one-third to two-thirds of the total annual water consumption of all the households in Alberta.

Multiple communities in the region are struggling with drought and water supply issues. Greenview itself declared an agricultural disaster due to drought this past summer, and that same day, its council approved adding more land to the purchase agreement being negotiated with O’Leary.

The nearby Sturgeon Lake Cree Nation (SLCN) received public assurances from the province that it would be consulted before water permits were issued. But records show that Greenview was granted Water Act licences for withdrawals from two locations on the Smoky River at the proposed Wonder Valley site before the First Nation’s input was sought.

“To this day, we have heard nothing from O’Leary other than generic statements, and Greenview has not said a word to us since the spring of 2024,” SLCN Chief Sheldon Sunshine told The Mix in a Dec. 1 email, adding that there has been “no meaningful consultation.”

“In fact, they claim there is no project, so we are completely in the dark.”

Jonathan Gauthier, press secretary to Glubish’s ministry, told The Mix in January that Environment and Protected Areas (EPA) had issued Greenview a “preliminary certificate which will allow a Water Act licence to be issued in future, provided various mandatory conditions are met,” emphasizing that the conditions included “appropriate consultation with First Nations.”

According to court-filed documents [pdf] provided to The Mix, SLCN requested a copy of the preliminary certificate, but never received it. When they met with then-Indigenous relations minister Rick Wilson, Glubish, and officials from the province’s Aboriginal Consultation Office (ACO) in April, they say they discovered that on top of the preliminary certificate, a full water permit had been granted without their knowledge. The full permit was dated one day before the meeting.

SLCN filed an appeal of the water licence to the environmental appeal board, which according to documents viewed by The Mix, Greenview has applied to strike, saying the board cannot consider Treaty and Aboriginal rights. Alberta has supported Greenview’s position.

In the public filing, SLCN said ACO officials told them they did an assessment and decided there was no duty to consult because “the issuance of the licence would have no impacts on SLCN’s Treaty and Aboriginal rights.” The Nation is asserting the land is part of their traditional territory, that members have registered traplines throughout the area, and that they should have been consulted.

“We knew AI data centres were water guzzlers. We didn’t know it was that bad,” Sunshine wrote to The Mix. “We also know that taking this much fresh water and then releasing it causes increased toxins, which is detrimental for us as well as those that farm, but where is the opposition?”

Putting Gas First

Many data centre developers around the world are looking to clean, cost-effective renewable energy to power their projects because “it’s cheaper to get electricity from wind and solar than it is from gas,” Pembina’s Wang said. Clean technology industrial areas are springing up in the United States, where renewable energy and data centres are located together, using “green” steel and cement.

“Renewable energy can be built faster right now than gas turbines can be procured and installed,” he added. And there could be an opportunity for wind and solar if Alberta loosened up some of its renewables restrictions, noting that the government had promised to open up an engagement process on the possibility of solar and wind development on Crown land.

Greenview has seen past plans fall through for the site they’ve dubbed the “Greenview Industrial Gateway.” In 2021, then-premier Jason Kenney said a planned $2.5-billion petrochemical plant to produce ammonia and methanol from gas was a “sign of hope in the province’s recovery.”

Northern Petrochemical Corporation’s website is still under construction four years later. CEO Geoff Bury did not respond to The Mix’s request for an update. In 2023, The Progress Report wrote that Bury expected to reach a final investment decision in 2024.

A combined geothermal and carbon sequestration project was also announced for the site by Alberta No. 1 Geothermal Energy, but the company’s website hasn’t been updated with any progress since July 2023.

“There definitely are opportunities for exploring other types of energy in my view,” Wang said, adding that Alberta is upgrading [pdf] the electricity line to Grande Prairie and most data centre projects see more benefits from being grid-connected due to the very high standard for power availability.

“And that might not mean the specific area where Wonder Valley is proposed, but maybe just a few kilometres away there’s really good potential that could be tapped into.”

Alberta’s “gas-centric” data centre strategy has also raised questions from energy experts who say the province may be sabotaging its own aspirations by discouraging wind and solar power.

But a new 2% levy on data centres requiring grid connection favours projects that “bring their own power.” That makes the province’s ubiquitous gas more of an option as long as renewables are bogged down by Alberta’s strict regulations.

The Globe and Mail reports that around 29 data centre projects have requested connection to the grid for access to 16,000 MW, but the provincial grid operator has put a cap on the amount of electricity available to data centres.