Oracle’s planned 2.5GW data center in Doña Ana County, New Mexico, has hit a roadblock in its development over permits.

According to recent reports, the firm’s Jupiter data center campus is facing its second major regulatory rejection, after the New Mexico state land office rejected Energy Transfer's application to build a new natural gas pipeline to feed the site.

The 17-mile pipeline extension, dubbed the Green Chile Project, was expected to deliver up to 400 million cubic feet of natural gas per day to power 2.5GW of Bloom fuel cells deployed on site.

State officials posited large-scale water use, increased CO2 emissions, and a lack of state revenue generation as major factors in their decision. Despite the setback, Oracle claims that the project still remains on schedule. The company had requested federal regulators to fast-track the review to allow the pipeline to enter service by August 15, warning that missing the window would lead to much higher costs being incurred. An initial application had been denied in March.

If the company fails to gain approval, it may have to redirect the pipeline through state land. This, however, would require new agreements with private landowners, potentially delaying the project even further.

Oracle was announced as the tenant of Project Jupiter in January. The 1,400-acre campus is expected to span four data center buildings and is being built by Stack and BorderPlex Digital Assets, with the companies previously announcing plans to invest up to $165 billion in the project.

Oracle will occupy the campus once construction is complete and will use it to host AI infrastructure for OpenAI.

Oracle signed a deal with solid oxide fuel cell (SOFC) developer Bloom last year for 1.8GW of power, expanding it to 2.8GW of capacity in April. Also in April, it was revealed that Bloom would deploy the cells at the Project Jupiter site to replace gas turbine units and diesel generators previously planned for the site.

However, while SOFCs do not produce combustion emissions, they are still fueled by natural gas, resulting in significant emissions compared to renewable sources.

This is the second rejection Bloom has faced in recent years due to its reliance on natural gas to power its fuel cells. In June 2024, Amazon canceled plans to deploy Bloom’s SOFC’s at three data centers in Morrow County, Oregon, as it would lead to more emissions than relying on the grid, which is powered predominantly by hydropower systems.