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SOUTHERN NEW MEXICO

AG backs Project Jupiter permit challenges

State DOJ files responses in water well, air permit cases

Aerial photos taken on June 26, 2026, show the construction site for Project Jupiter, the Oracle and OpenAI data center project planned for southern New Mexico.
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New Mexico Attorney General Raúl Torrez argued in a court filing this week that the Office of the State Engineer exceeded its authority when it granted an emergency authorization for a well supporting construction of Project Jupiter.

Torrez also says the office, headed by State Engineer Elizabeth Anderson, failed to perform its duty to assess whether the activity “will be detrimental to the public welfare or contrary to the conservation of water.”

The state Department of Justice filed responses supporting two emergency petitions with the state Supreme Court pertaining to the 1,400-acre data center construction site in Santa Teresa.

One is in response to the Center for Biological Diversity’s challenge to the OSE’s approval of a new well that produces water from an existing water right. The other is in support of a petition by New Energy Economy challenging the New Mexico Environment Department’s handling of an air quality permit application for the project.

In both, Torrez argued that the agencies were cutting corners and neglecting the public welfare in favor of moving Project Jupiter forward.

“The same rules must apply to everyone,” Torrez stated in a Thursday news release. “Whether you're a family defending a water right or a global corporation with money and political clout. Notice and a fair hearing exist to protect the public, and bending those rules for a powerful applicant undermines public trust, regardless of the outcome. My office will keep using every tool available to make sure state agencies follow the law and answer to the people they serve.”

Torrez, a Democrat, is running for a second term as attorney general in the November election.

Water right

Last October, Santa Teresa Capital applied for emergency authorization to drill a new well within its existing water right. Historically used chiefly for a customer’s irrigation, the water right is also approved for industrial use and allows diversion of 2,400 acre-feet annually.

The older well had failed and the replacement was within 100 feet of it. The application stated that without the replacement well, Santa Teresa Capital would sustain severe economic losses. Torrez said the OSE ignored precedents concerning similar emergency claims.

Torrez argued there was not a genuine emergency justifying fast-tracked approval of the new well or proceeding with an alleged change in the water use, without public notice or a hearing.

Colin Cox, a senior attorney at the Center for Biological Diversity, said Torrez’s filing “underscores how blatantly the Office of the State Engineer erred by handing our precious fresh water over to Project Jupiter. We brought this case to rein in this rogue agency and ensure our state’s robust water laws are upheld.”

In a letter to U.S. Rep. Melanie Stansbury, D-N.M., the OSE disclosed that more than 30 protests had been filed since the authorization. As nearly a year has gone by without hearings on the protests, Torrez’s office pointed to meter readings indicating over 100 million gallons of groundwater have been pumped from that well.

OSE has stated the well is within an existing water right and not a new diversion of water. In its response to the court, the office denied that selling water to Project Jupiter’s builders constituted a new use of the water right because historically Santa Teresa Capital has been permitted to sell water to commercial and industrial customers.

Santa Teresa Capital stated in its own filing that it mainly supplies water to Evergreen Turf for its sod farm, as well as to Yucca Growth Infrastructure for Project Jupiter, all approved under New Mexico’s water law and OSE oversight.

Since the new well came into operation in April, Santa Teresa Capital stated, 90% of its diverted water has been for the farm. It argued that the State Engineer had followed the law and that the Center for Biological Diversity should seek satisfaction under regular legal remedies, rather than intervention by the Supreme Court.

Air permit

Torrez also backed a court challenge to the air quality permit process for applicant Yucca Growth Infrastructure. The permit is essential for the on-site power generation facilities that would power the 2.45-gigawatt, methane-powered fuel cell system built by Bloom Energy. indicate the site would emit over 10 million tons of greenhouse gases annually.

The DOJ response backed arguments from clean energy advocate New Energy Economy, citing decisions by former hearing examiner Max Shepherd to move filing deadlines and the scheduled opening date ahead, and to deny prehearing discovery, reversing his own previous orders without explanation following a meeting between Gov. Michelle Lujan Grisham and representatives from Oracle. The governor has denied any interference in the permitting process.

Shepherd recused himself from the case last month.

New Energy Economy argued that the compressed prehearing schedule did not provide a meaningful opportunity for public review of the technical evidence or for witnesses to prepare testimony for a public hearing that had been scheduled to begin on Sept. 14.

“Due process cannot be reduced to a stopwatch,” NEE’s executive director, Mariel Nanasi, said in a written statement Thursday. Continuing, she said that under New Mexico law, “Due process is flexible because the process must fit the circumstances. An ordinary permit may require ordinary procedures. An unprecedented project with unprecedented consequences demands commensurate scrutiny.”

Torrez argued that the law allows the Environment Department to extend permitting deadlines for good cause, and that challengers’ right to a fair proceeding had been violated.

“NMED should be required to comport with constitutional due process, rather than bending to the self-imposed financial concerns of an applicant,” the DOJ filing states.

In its response, the Environment Department raised procedural and jurisdictional objections, arguing that the state’s high court should vacate its order putting the proceeding on hold and warning the justices against allowing the permit process to become “a generalized data center referendum.” It also raised a concern about the separation of powers between the judiciary and NMED as an executive agency.

“The stay has already caused lasting damage and prejudice to the State by preventing NMED from performing functions like making timely permit (decisions) assigned by the Legislature, which are embodied in federal law,” the department’s response states.

Algernon ’A is the Journal’s southern New Mexico correspondent. He can be reached at adammassa@abqjournal.com.