Core Scientific Faces State Penalties for Data Center Emissions in Denton

Core Scientific received a notice of enforcement from the Texas Commission on Environmental Quality on July 24. The state agency alleges the company violated air quality rules at its Denton AI data center by running backup generators for excessive periods and emitting pollutants above certified limits. City staff reported these pending violations to the Denton City Council on Friday.

The enforcement action stems from the company operating eight emergency generators between April and June. Core Scientific used these units to manage a manufacturing defect in 93 transformers at the site. The TCEQ found that the generators produced 384.13 tons of nitrogen oxides, 50.10 tons of carbon monoxide, and 2.51 tons of particulate matter during that timeframe. These figures far exceed the annual certified limits for the site, which are 24.9 tons for nitrogen oxides, 8.17 tons for carbon monoxide, and 0.85 tons for particulate matter.

The TCEQ also determined that the company exceeded the allowed 100 hours of non-emergency generator use per year. At one building on the property, four generators ran between 1,352 and 1,371 hours. At the second building, four generators operated between 527 and 1,024 hours. The agency noted that Core Scientific failed to provide calculations for volatile organic compounds emissions from diesel fuel storage and handling during this period.

Matthew Klentzman, a senior construction project manager for Core Scientific, told the TCEQ in late April that the company identified a systemic defect affecting the 93 transformers. Luke Jones, an environmental investigator for the TCEQ, wrote in a July 22 report that the defect posed a risk of further failures and potential loss of data center operations. Jones requested records via email in April and followed up in May. The company finally provided the records on May 26, though the TCEQ stated that not all requested information was included.

Mayor Pro Tem Nick Stevens brought the TCEQ notice to public attention in a social media post on Friday. He stated that Core Scientific allegedly exceeded maximum emission rates and failed to obtain a required federal permit for major pollution sources. Stevens had previously asked city staff to investigate the violations during a public hearing last week. That hearing concerned a proposed 90-day moratorium on new data center development in Denton.

Stevens told the Denton Record-Chronicle on Monday that the emissions data suggests a substantial environmental hazard. He expressed concern that residents had reported environmental issues for years without receiving confirmation from officials. He said the findings should clarify the situation for the public. The city currently has two approved data centers. Core Scientific is nearing full buildout with a contract for up to 394 megawatts of power. A second center, operated by Qumulus, has contracted for up to 20 megawatts but has not yet broken ground.

The TCEQ can enforce compliance through administrative orders or by referring the case to the Texas Attorney General’s Office for civil penalties. Core Scientific did not respond to a request for comment by Monday evening. Denton County is part of the Dallas-Fort Worth ozone non-attainment area, which is classified as severe for ozone levels. The city relies on the TCEQ’s Region 4 office in Fort Worth for air quality matters as it does not have local air quality ordinances.

Stevens said the council has learned that a third data center wants to build in Denton. He noted that Core Scientific also plans to expand its current facility. He said the council needs to step back and review the new information before deciding on the moratorium.