Sanford, NC- Clean Water for North Carolina is releasing a new report ahead of a key presentation in Lee County, where a developer wants to open a commercial gas well to power an AI data center. Build Before the Bubble Bursts: Understanding the Business Model Behind the Data Center Boom in North Carolina explores the economic conditions that brought about this proposal and the potential impact on North Carolina and Lee County.
This report comes a few days before the Lee County Board of Commissioners’ March 16 meeting, where they will hear a presentation on the county’s options for regulating data centers and crypto-mining. The presentation comes after months of local residents raising their voices in opposition to a controversial proposal from Deep River Data. Deep River Data wants to power an artificial intelligence (AI) data center with gas from Butler Well #3 in Lee County.
The proposal has drawn criticism from local residents, business owners, and clean water advocates. Community members will hold a press conference at 5:00pm to share their concerns before the county commissioners meeting at 6pm on Monday.
Butler Well #3 is located near the Lee-Chatham county line, south of U.S. Highway 421, close to Cumnock & Sanford, NC. It is unlikely this well will produce any usable amount of gas without hydraulic fracturing (“fracking”). Fracking has never been used in North Carolina.
Sheila Sherrick, a Lee County resident whose home and goat farm rely on her private well, said, “I can’t afford to have a poisoned well. I need clean water for me, my family, and my animals.”
“Drinking water for municipalities from Sanford to Wilmington comes from the Deep and Cape Fear Rivers. This means that thousands of families, businesses, schools, institutions, Ft. Bragg; all, have the potential of contaminated water from fracking and data center development on the Deep River which flows into the Cape Fear. A moratorium is needed for time for more research and development of safer and cleaner solutions for the management of these two dirty industries.” said Donna Strickland, a Lee County resident.
Hope Taylor, executive director of Clean Water for North Carolina, said, “Residents are right to be concerned about the potential impact of a proposed data center, given the large volume of water that would be required for cooling. That section of the Deep River sits over the Triassic Basin, and according to the US Geological Survey, These formations have poor drainage and low permeability, which significantly limits the ability of the ground to store and release water to the river during dry periods.”
In addition to water issues, local businesses, clergy members, and newer residents expressed concerns about the economic impacts of this proposal.
Steph Gans, assistant director of Clean Water for North Carolina, described the risks, “Most people who hear that a company wants to open a commercial gas well, purely to power an AI data center, are shocked. This idea is only possible in our current economic environment, where investors are willing to risk it all on AI, with no clear path to turning a profit on AI services. Our new report describes these and other issues with Deep River Data’s proposal. Eventually, the bubble will burst, leaving AI data centers that rely on inefficient chips and expensive fuels as stranded assets. A moratorium gives the county time to assess what regulations would protect the community.”
Deep River Data initially expressed interest in applying to drill last year, but did not file an application. Then, in the beginning of February, 2026, Deep River Data emailed the NC Oil and Gas Commission. They asked questions to help them complete their application, and wrote, “We’re excited to be moving full steam ahead.”
Therese Vick, sustainable development coordinator at Blue Ridge Environmental Defense League, shared this in response, “Lee County is being forced into a high-stakes experiment where the community bears all the risk, and the industry takes all the profit. To combine the massive power demands of an AI data center with the known dangers of fracking is to design a failure that Lee County will be paying for long after the data centers go dark.”
Stephanie Stephens, the Deep River Riverkeeper, said, ““The Deep River is a direct drinking water source for 345,000 people and the source of Sanford’s drinking water. Approving a data center, powered by natural gas drilled from the Cumnock Shale basin underneath the Deep River threatens safe drinking water. We ask that the Commissioners pass a moratorium on Data Centers and Crypto-mining for Lee County so that permanent decisions made can be made with great consideration as to the best use of land space and for the well being of the community already living in the region.”
Emily Sutton, Haw Riverkeeper and executive director at Haw River Assembly added, “North Carolina does not have permitting provisions and environmental regulations to ensure that data centers do not harm our communities or the air, water, and forests we depend on. We are asking counties to put moratoriums in place until our policy makers can adopt protective guardrails to regulate this industry.”
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About Blue Ridge Environmental Defense League (BREDL)
BREDL advocates grassroots involvement to empower whole communities in environmental issues. BREDL functions as a “watchdog” of the environment, monitoring issues and holding government officials accountable for their actions. BREDL networks with citizen groups and agencies, collecting and disseminating accurate & timely information. BREDL sets standards for environmental quality & awards individuals & agencies who uphold these standards in practice. bredl.org
About Clean Water for North Carolina
Clean Water for North Carolina is a non-profit promoting clean, safe water and environments and empowered, just communities for all North Carolinians through outreach, advocacy, education, and technical assistance. cwfnc.org
About Deep River Riverkeeper
Deep River Riverkeeper’s mission is To protect the Deep River and it’s neighbors through science, education and stewardship. We do this through projects and programs that include public participation. We advocate for and work to ensure the Deep River’s well-being as a vital, healthy, life sustaining source for all. deepriverkeepersnc.org
About Haw River Assembly
Haw River Assembly is a 501(c)(3) non-profit citizens’ group founded in 1982 to restore and protect the Haw River and Jordan Lake, and to build a watershed community that shares this vision. Our goals are to promote environmental education, conservation and pollution prevention; to speak as a voice for the river in the public arena; and to put into peoples’ hands the tools and the knowledge they need to be effective guardians of the river. hawriver.org
