New Mexico Rejected the Pipeline for Oracle's AI Data Center Twice. Oracle's Answer Was a Force Majeure Notice, Not a Backup Plan.

Project Jupiter, the Oracle-anchored data center campus going up on roughly 1,400 acres outside Santa Teresa, New Mexico, was supposed to be the clean answer to the problem every other large-load developer is stuck with this year: don't wait years in a utility's interconnection queue, generate the power on site instead. The campus is one of the flagship builds in OpenAI's Stargate program, with Oracle signed on for an 18-year anchor lease and a first-phase price tag north of $50 billion. Its power plan is on-site Bloom Energy fuel cells running on natural gas, up to 2.45 gigawatts of them, with no utility interconnection study standing between the project and its first megawatt. That plan still needs gas to arrive somehow, and the 17-mile pipeline meant to deliver it has now been refused state right-of-way twice. On September 24th, instead of announcing a new route or a new power source, Oracle sent its developer a force majeure notice.

Skipping the queue doesn't mean skipping the permits

The logic behind going behind-the-meter is sound and increasingly common — ERCOT's interconnection queue in Texas has swollen past 470 gigawatts, more than 90 percent of it data centers, and PJM's own queue waits now run close to seven years, numbers we've written about before in the context of Texas's new large-load deposit rule. Generating power on site with fuel cells instead of pulling it from the grid sidesteps that queue entirely. What it doesn't sidestep is everything else a 2.45-gigawatt combustion source requires: an air quality permit for the emissions, water for construction and cooling, and in this case, a gas pipeline big enough to feed it — the Green Chile Lateral, a 17-mile, 24-inch line Energy Transfer is building at a cost of roughly $60 million to carry gas from the El Paso area to the Project Jupiter site. The pipeline's entire route isn't in dispute. A single 0.6-mile segment crossing New Mexico State Trust Land is, and that segment is the one piece of infrastructure Oracle's power plan cannot route around.

The same rejection, twice

New Mexico's State Land Office, run by elected Commissioner of Public Lands Stephanie Garcia Richard, denied Energy Transfer's applications for the two rights-of-way and a business lease covering that 0.6-mile stretch back in March. Energy Transfer asked her to reconsider. On July 14th, she said no again, in writing, and didn't soften the reasoning the second time: "Building pipelines and other gas infrastructure intended to serve Project Jupiter is a poor use of New Mexico state trust lands and staff resources," she wrote, adding that "the burden that the project will impose on New Mexico's water and other natural resources, and on the surrounding community, is extreme," and that "at a time when New Mexico needs to stop the out-of-control acceleration of climate change, literally doubling down on dangerous emissions is irresponsible and incompatible with NMSLO's mission." Her letter gave Energy Transfer 30 days to appeal. By late August, trade coverage of the project was already describing the $60 million pipeline as delayed into 2027 — not dead, but stuck on the one segment that was never going to be the hard part of a 17-mile build.

A parallel fight over the air and the water

The pipeline isn't Project Jupiter's only open permit fight, and it may not even be the messiest one. The air quality permit covering the Bloom fuel cells — and a separate emergency authorization to pump groundwater for construction — have been tied up at the New Mexico Environment Department and, above it, the state Supreme Court. The hearing officer assigned to the air permit case, Max Shepherd, recused himself on August 24th after the New Mexico Environmental Law Center and the Center for Biological Diversity accused him of favoring the developer, pointing to a sequence in which he first said he'd deny the developer's request to push the hearing to October, then days later issued a scheduling order moving it up to September instead. New Mexico's Supreme Court had paused both the air permit hearing and the water-pumping authorization while it weighed the environmental groups' broader challenge, and the state's own attorney general filed briefs on September 3rd supporting that challenge. On September 18th, the court ruled unanimously against the groups and lifted the stays, letting state proceedings resume — a real procedural win for the project. It's a narrower one than the headlines suggested, though: the Environment Department still hadn't named a replacement hearing officer or scheduled a new date as of that ruling, so lifting the pause didn't actually restart a clock that has nowhere to run yet. Residents have separately turned out to protest the air permit outside NMED's offices, pointing to estimates that the fuel-cell system's annual emissions would rival several of New Mexico's largest cities combined.

What a force majeure notice actually says

Against that backdrop, Oracle sent a force majeure notice on September 24th to Blue Owl Capital's STACK Infrastructure, the private-credit-backed developer behind the campus. The notice reserves Oracle's right to delay payments owed under its lease if the facility isn't energized by the contract's 2028 target — a real legal hedge, not a formality. Oracle's own spokesperson described it in terms built to minimize that: "Force-majeure notices are commonplace in developments of this scale and are often used to preserve contractual rights among project partners. They do not, by themselves, establish a project delay or change delivery expectations." The company said the project "remains on our planned schedule" and that Oracle is "fully committed to New Mexico and confident in our path forward." Reporting on the notice ties it to three overlapping pressures: the permit litigation above, what's been described as a redesigned power plan, and financing strain. Oracle's stock dropped on the news. Both things can be true at once — the notice doesn't prove the 2028 date is already blown, and it's also not the move a company makes when every input to that date is still on track.

The diligence angle

We've made this point from two different directions already this year. Helix Digital Infrastructure's "preferred power provider" relationship with Vistra was a real corporate-level arrangement that told you nothing about any specific site because no site existed yet to test it against. Imperial Valley Computer Manufacturing's recycled-water pledge was a real public commitment that evaporated the moment the agencies that would have had to honor it said no. Project Jupiter is a third variant of the same gap, and arguably a cleaner one: a company's own description of a legal filing, stated publicly, in a case where the filing and the description are pulling in different directions. A force majeure notice is not a developer's unverified claim — it's a document with real contractual weight, and Oracle's quote about it is the unverified part, the PR gloss layered on top of an instrument whose entire purpose is to protect Oracle if the 2028 date slips.

GridPermit works Colorado, not southern New Mexico, and nothing in Xcel Energy's territory looks like a Bloom Energy fuel-cell campus chasing its own gas pipeline instead of an interconnection agreement. But the shape of the problem travels. Going behind the meter is a real way to avoid a multi-year utility queue, and more developers are going to make that same trade as ERCOT and PJM both strain under the load they're already carrying. What Project Jupiter shows is that the trade doesn't remove the permitting risk — it relocates it, from a utility's interconnection study to a state land office's right-of-way desk, an environment department's contested-case calendar, and a court docket. In a Kill Test, those are still line items on the same evidence ladder, not an exit from it, and a site that's cleared its utility conversation by avoiding the utility entirely still has to clear every one of them on its own.