State clearing way for energy park

Craig Harrison’s Niobrara Energy Park has cleared some major hurdles in the past year, with state government agencies approving his requests for a natural-gas distribution system and usage of 135 million gallons of water annually.

“Now the project is not only totally energy secure, it can be totally water secure,´ said Harrison, president of Harrison Resource Corp.

Harrison has worked for nearly three years to launch his energy park, where he aims to integrate natural gas and renewable-energy generation facilities with a cloud-computing data center. Harrison, a developer in Loveland, has collaborated with IDC Architects, an affiliate of CH2M Hill, on the project.

The Niobrara Energy Park, located near Carr in Weld County, would join a handful of data centers in the region, including a $112 million facility being built by Microsoft Corp. (Nasdaq: MSFT) and another operated by the National Center for Atmospheric Research, both in Cheyenne, Wyo.

Harrison believes his data center will generate “hundreds of millions” of dollars in economic impact in its first 10 years, based on a study he commissioned a consulting firm to complete. Harrison declined to give details of the economic-impact study.

He hopes to find a buyer within a year; construction would take a decade. Meanwhile, he is lobbying the state Legislature to grant economic incentives for data centers in Colorado.

Any buyer of Harrison’s one-square-mile energy park will have to have a large appetite for investment: Harrison estimates it will cost $4.3 billion to construct. Building the computer servers will cost $2.5 billion and the data centers will cost $1.1 billion. About $700 million is the cost for the energy components, including a natural-gas power plant and solar farm.

Harrison declined to reveal how much he has invested in the project, although “it’s an awful lot for one guy.” He acknowledges the expense, but notes that it has progressed in the past year.

“The project so far has been a series of ingredients that have been stacking up on the countertop,” he said. “But the cake was never baked. Therefore, when some of these Fortune 50s look at it, it’s kind of like, ‘It’s an interesting concept, but it’s not a project yet.’ ”

Harrison explained that the project has not sold yet because only a few dozen companies worldwide would have the capital to complete it. It also only recently has cleared certain major regulatory hurdles, including approvals from the state Public Utilities Commission and Division of Water Resources.

Harrison closed on a deal in May to expand the park to include territory containing three natural-gas lines with daily capacity of 1.5 billion cubic feet of gas. His goal is to pave the way for the data center enterprise to build a natural gas plant to generate electricity to power the energy park’s data center, which he estimates could consume 200 megawatts of electricity annually. The park’s three gas pipelines, along with Harrison’s plan to add a fourth pipeline, will ensure that the data centers will not lose power, he said.

“You need the redundancy,” he said. “That’s what makes this cyber-secure.”

In August, Harrison’s energy park was granted authority to build a line to connect with an interstate gas pipeline system and to operate a natural-gas distribution system within the park, said Ron Davis, chief adviser of the Colorado Public Utilities Commission, in an email.

A natural-gas distribution system consists of underground pipes that transport gas from an interstate or intrastate pipeline, at an interconnection called a “city gate,” through service lines that connect with individual homes and businesses, he said.

“For Niobrara (Energy Park), distribution service will be exclusively to commercial accounts and not residential accounts,” he said.

Harrison said the natural-gas component of the project guarantees that companies can buy gas to power activities within the one-square-mile energy park.

“It will be the owner of the data centers building the power plant and generating their own energy,” he said.

The state also has granted Harrison approval to allow 412.8 acre feet of water, or 134.5 million gallons, to be pumped from wells annually at the energy park.

In December, the Division of Water Resources determined that water in the Upper Laramie aquifer beneath the energy park’s property was nontributary, meaning it was not significantly connected to tributary water that feeds surface water systems. The nontributary designation allows Harrison to pump groundwater from the aquifer such that it will maintain a minimum lifespan of 100 years, said Matthew Sares, hydrogeological services manager for the state agency, in an email.

“It should be noted that this quantification is dependent on site-specific data from wells when they are drilled on the property,” Sares said. “Therefore, the water volume allowed to be pumped annually may change based on those data.”

Harrison said he plans to use the water for power generation, fuel cells and data centers.

“You couldn’t build this without the water,” he said.

He has one major approval left: an air permit from the state Air Pollution Control Division after the natural-gas power plant is designed.

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