A startup with Alaska roots wants to build a massive data center on the North Slope, closer to natural gas supplies it would use to generate the enormous amount of electricity the center needs.
Stak Energy's proposed $500 million data center -- with a footprint of more than a square mile -- would support artificial intelligence and cloud computing, according to recent reporting by the Northern Journal.
So far, the idea exists only on paper, but the company has secured the state's preliminary approval to lease land off the Dalton Highway.
According to Northern Journal reporter Nat Herz, Stak Energy has suggested it would be able to avoid some issues that data centers in the Lower 48 have faced.
This interview has been lightly edited for length and clarity.
Nat Herz: There's a pretty significant backlash against AI, and specifically the data center construction and the environmental impacts and resource use, right? (The) significant demand on on water, on power, especially. I think there's a big problem in the Lower 48, where basically the demand for electricity is spiking because of the build-out of these facilities, in a way that's raising electricity prices for people across the country.
On the North Slope, there is a huge supply of natural gas right now that's not being used. This facility would not be connected to the rest of Alaska's grid. They would basically be self-generating power off of this abundant resource on the North Slope, presumably at a fairly competitive price, because right now there's no additional demand for this natural gas that they'd be competing with.
And then, again, there's abundant land, and another one of the arguments that they're — the state and the company — are making is that a lot of the energy and resource demand for these facilities in the Lower 48 are from cooling, and on the North Slope, you have a below-freezing average temperature over the course of the year, I believe. And so they're saying that's a major comparative advantage, where they'd be using what they expect to be 90% less water than a facility in the Lower 48.
Casey Grove: A lot of the hurdles, I would imagine, have to do with this plan being on the North Slope and kind of far away from the other centers of industry in the state.
NH: Yeah, I mean, I think there are a number of big question marks, and one is that this has never been done in Alaska on this scale, and certainly not on the North Slope. And so I think you can bring in engineers and people doing kind of pencil pushing and calculations and planning, and say, "We have this concept, it's compelling in all these ways," and then I think you bring it to investors and or the AI companies and say, "OK, you know, time to invest," and they're like, "There's no basis that this works and hasn't been done before, so we might not trust it."
I think that's a big overarching question here: Is there trust that this would work, and is there real interest in doing it? And I think we don't know, that the company sponsoring this project has not really been forthcoming about whether they have customers or investors lined up for this product.
I think there are also some questions about, does the bandwidth and the connectivity from the North Slope, are there issues with what they call latency and sort of the lag time? And then there's some other questions around the turbines that are used to generate power from natural gas. There's a big backlog for those turbines right now, just because there's a major increase in natural gas power generation and demand, and so in some cases they're saying as much as seven years. So can this company get those natural gas turbines? Those are some obvious questions as well.
CG: Let's talk about the company. It's Stak Energy. Who is Stak Energy?
NH: I don't think a lot is known about the ownership, necessarily, but the woman in charge, Sparrow Mahoney, she grew up in Alaska and has had, I think, some involvement in sort of startup-type businesses, and in cryptocurrency specifically. She was involved in the Iditarod's push into cryptocurrency a few years ago.
And then, more interestingly, in the past year or so, they brought on some people who were veterans of Alaska's energy and business world, so you've got a former state natural resources commissioner, John Boyle, who's working for the company, and Jim Shine, who is an attorney who used to be a special assistant at the Department of Natural Resources. And these are presumably folks that are familiar with the needs of navigating the land use and permitting process that this company has to go through.
So you've seen them staff up with some people who have some significant experience, which is I think at least one indication that they're a serious, credible company. But then I think on the flip side of that, again, it's one thing to be paying a handful of people even competitive six-figure salaries, and it's another thing to raise the hundreds of millions of dollars that you need to actually build a project like this.
