US Data Centers Face Delays Amid Political Backlash, Kimmeridge Warns
In brief
- Nearly 50% of proposed US data centers risk delays or cancellation from political and regulatory obstacles
- Community opposition has stalled $170 billion in data center projects since early 2024
- Roughly 70% of Americans oppose new data centers locally, per Gallup
- Over 500 US jurisdictions have implemented data center development restrictions
- Data centers could add 5–10 Bcf/d to US natural gas demand
Political and Permitting Obstacles
Community opposition has contributed to at least $170 billion worth of data center projects being delayed or cancelled between January 2024 and May 2026. Roughly 70% of Americans oppose new data centers being built in their local areas, according to Gallup, making local pushback a consistent headwind for developers.
The resistance has grown so widespread that more than 500 US jurisdictions have implemented some form of restrictions or limits on data center development. States traditionally open to industrial projects are not exempt. States like Pennsylvania, Texas, and Ohio, traditionally friendly to large-scale energy and industrial projects, are seeing significant pushback against data center proposals. New York issued a statewide environmental permit freeze for data centers through executive order, signaling the urgency of the regulatory response.
Opposition to data centers has become a notable issue heading into upcoming US midterm elections, giving local and state politicians a reason to take a harder line on approvals. The permitting process alone can add 18 months or more to a project timeline in many jurisdictions.
Infrastructure and Energy Implications
Beyond politics, practical constraints are mounting. Power grid interconnection timelines, transformer shortages, and competition for construction labor and materials create infrastructure bottlenecks independent of regulatory hurdles. These supply-side constraints compound delays even for projects that clear the permitting stage.
Data centers could add 5 to 10 billion cubic feet per day to projected US natural gas demand growth, which already sits at roughly 30 Bcf/d. That represents a 17 to 33 percent increase in incremental demand—a figure that reshapes energy markets and power generation planning. Kimmeridge, which holds stakes in natural gas producers and in the Commonwealth LNG terminal in Louisiana, has direct financial interest in data center buildout. But the firm's analysis also reflects the broader economic stakes: delayed or cancelled projects mean foregone investment, delayed energy demand, and slower AI infrastructure rollout across the country.
