Alberta Municipality Declares Farm Disaster Due to Drought, Approves Water-Guzzling Data Centre Plan

An Alberta municipality that declared an agricultural disaster earlier this month due to drought is moving forward with plans to host the “largest AI computer data centre on Earth,” which could drain millions of litres of water every day from the watershed.

The watershed is located in Treaty 8 territory and across the Métis Nation of Alberta Regions 4, 5, and 6. Almost 175,000 people live along the 1,900 kilometers of rivers that flow north into the Northwest Territories. The nearest First Nation to the project, Sturgeon Lake Cree Nation, wrote an open “cease and desist” letter to Alberta’s premier saying it learned of the project through the media.

In response to emailed questions from The Energy Mix, the Municipal District of Greenview said its approach on the $70-billion Wonder Valley data centre project proposed by celebrity investor Kevin O’Leary had not changed despite the unfolding disaster devastating livestock producers in the region.

“Every project in the Greenview Industrial Gateway, including Wonder Valley, must go through rigorous environmental and regulatory reviews, including water use approvals managed by the province,” according to an email statement from the municipality. “Council continues to monitor drought impacts, and any decisions on industrial water use will balance environmental responsibility with economic opportunity.”

Greenview declared the agricultural disaster due to the ongoing drought, aggravated by a grasshopper invasion. “We urge all levels of government and the public to understand the gravity of the situation and to support the agricultural community through this difficult time,” , the community said in a media release. “Our producers are the backbone of not only our local economy, but also Alberta’s and Canada’s, and they need our full support now more than ever.”

In a July 8 letter to Agriculture and Irrigation Minister R.J. Sigurdson, Greenview Reeve Tyler Olsen asked for help from the province, writing that “the ongoing lack of precipitation over the past year, compounded by minimal spring runoff, has left pastures and hay lands severely depleted.”

“Council is increasingly concerned about the mental health impacts on producers as they navigate difficult decisions regarding their operations,” he added, strongly urging the ministry to ensure the municipality receives the necessary support. Olsen also asked Sigurdson to advocate for the region’s eligibility for the federal Livestock Tax Deferral program.

He warned that although the declaration was specific to the livestock sector, the sustained drought was also expected to affect grain yield and quality. Olsen pointed to a July 4 Provincial Crop Report showing 79.1% of hay and pasture land in the Peace Region was rated as “poor” to “fair”—a 39% increase over the five-year average.

When contacted by The Mix, the municipality had not yet received a direct response from either the provincial or the federal governments but said in the email statement that it would continue to advocate for relief for livestock producers. Greenview’s statement added that it is supporting producers with “timely updates, local pest monitoring, and exploring additional program options.”

And yet, at the same July 8 meeting where it declared the agricultural disaster, Greenview council also amended the purchase and sale agreement with O’Leary Ventures to include a 1,926-acre parcel of land currently owned by the municipal district.

The Mix requested an interview with the Greenview reeve last week but is still waiting for a reply.

According to the Wonder Valley website, the site will be the “world’s most sustainable data center campus,” using onsite gas turbines to generate 7.4 gigawatts of power. Promotional materials promise “full carbon capture,” though O’Leary Ventures CEO Paul Palantir told the Globe and Mail in April that “carbon capture is not really ready for prime time,” saying it reduces efficiency, making the project cost-prohibitive.

According to the trade publication Data Center Knowledge, the water required to cool artificial intelligence data centres is becoming a “significant financial, operational, and reputational risk.”

Data centres “increasingly compete with local communities and agriculture in water-stressed regions,” said Ram Sri, vice president of sustainable finance at Moody’s Ratings.

Some companies, including Google, Microsoft, AWS, and Meta have committed to becoming “water positive” by 2030, replenishing more water than they use. Operators are also turning to green bonds and sustainable financing to fund water-related upgrades.

Although northern Alberta is rich in fresh water, a report on the Peace and Slave River watershed prepared by Pattison Resource Consulting Ltd. in June 2024 concluded that human activity is increasing and impacting all aspects of the watershed. Yet, a review of the municipal development plans in the watershed found that few mention water.

“There are mentions of the municipality’s current infrastructure and its ability to support population growth up to a specific point, but no mention is made of plans should water supplies or availability in the region decrease,” the report stated.

The report also warned there was a potential for the economies of the watershed to be affected by climate change, leading to “drought and severe weather, stripping topsoil layers, leaving agricultural fields unable to produce crops.”

The Peace River Watershed contains approximately 11.2% of Alberta’s farms and generated $1.3 billion in farm operating revenues in 2021. Although the Peace and Slave River mainstems have a lot of water, the report cautioned that most people and communities rely on water from smaller tributaries, which are more prone to water shortages.

The Pattison report was written prior to the announcement of the Wonder Valley project in late 2024 and did not consider the possibility of a large AI data centre. It did include an analysis of the impacts on the watershed from the Site C dam, which brought the fifth of six generating units online on July 16. Since the report’s release, there are also plans for a nuclear power project north of the Town of Peace River.

To ensure sufficient water and balance demand from communities and industry, the Greenview email statement said the municipality was “actively involved in regional water planning alongside provincial regulators and local partners.”

CBC News reported recently the Alberta government was considering changes to the withdrawal rules for two major northern water basins, including the Peace River basin. Amendments to the Water Act would open the door to inter-basin transfers, a move that is supported by the Canadian Association of Petroleum Producers.

Keepers of the Water, an Indigenous-led organization, is opposed to the proposed changes. “The government’s attempt to downplay the risks by calling inter-basin transfers ‘low risk’ ignores scientific evidence and lived knowledge,” it warned in a news release.

“Planning for economic development, including population and industrial growth, must begin with the question of water. Yet again, water is being treated as an afterthought. We ask: who is going to pay the price when industry is given priority access to Alberta’s largest river basins?”

Cover photo:  Mark Seery/Augtera