By Prathyaj Mantha
Gov. Josh Shapiro’s new executive order restricting data center development in Pennsylvania is ceding a trillion-dollar industry to other states to solve a nonexistent crisis.
While there are pockets of the Lehigh Valley facing drought, Pennsylvania does not have a water shortage, nor an energy shortage. What it has is a governor bowing to vocal opposition while ignoring economic reality and the management capacity Pennsylvania possesses.
The concern about local water stress is legitimate. Lehigh and Northampton counties were under genuine drought conditions three months ago, but most of Lehigh recently moved to abnormally dry status while Northampton County now has almost no drought conditions.
Those droughts were real, but that regional challenge should not drive statewide policy that cedes economic opportunity to other states. Instead, it should prompt a smarter approach where data center development is paired with regional water management infrastructure.
Claiming Pennsylvania faces water constraints is factually false. Pennsylvania is officially designated as water-rich by state agencies. The state receives 34 trillion gallons of precipitation annually. It possesses 47 trillion gallons of groundwater. Per-capita water availability in Pennsylvania is 150 times higher than in water-stressed states like Texas and Arizona.
Pennsylvania’s 56,000 miles of surface streams and complex groundwater aquifers are abundant resources if infrastructure planning is sound. The state’s water-rich status means regional droughts can be buffered through inter-regional transfer systems, something not possible in Texas and Arizona. Pennsylvania should leverage this advantage, not surrender it.
Similarly, Pennsylvania is energy-rich. The state is the second-largest energy producer in the nation. It generates more electricity than it consumes and exports the surplus to neighboring states. It possesses the second-largest nuclear capacity in the country and sits atop the Marcellus Shale formation, one of the world’s largest natural gas reserves. Pennsylvania has below-average electricity costs for businesses, a blessing Pennsylvania needs to leverage if it wants a stake in the artificial intelligence race.
Shapiro’s executive order misses this distinction and imposes strict water conservation standards, requires developers to supply their own electricity, and demands local approval for state permits — guardrails designed for water-scarce Texas and Arizona.
Amazon committed $20 billion to build data centers in Bucks and Luzerne counties. That means high-wage jobs, property tax revenue and economic development in rural regions that desperately need it. Luzerne County, one of Pennsylvania’s poorest, stood to gain thousands of jobs and hundreds of millions in investment. Now, that investment is in limbo and developers will go elsewhere — likely to Texas, a state with much higher water pressure that is actively seeking to attract the AI infrastructure industry.
A few vocal communities opposed the development of data centers and the opposition from activist groups should be addressed. However, ceding all economic opportunity due to the vocal opposition will cost Pennsylvania dearly.
Data center developers now face uncertainty, higher approval costs and municipal veto power over state decisions. That tells companies that Pennsylvania is hostile to large-scale infrastructure investment.
Pennsylvania will lose to more aggressive competitors nationwide, like North Dakota, which recently approved a $3 billion data center buildout. Northern Virginia, which is the epicenter of the world’s biggest cluster of data centers, leveraged that buildout to become home to the richest county in the United States. Texas, despite facing water stress in some regions, continues attracting data center operators with its fast permitting policies, exactly what Shapiro’s order eliminates. Ohio and North Carolina are also competing aggressively for this sector.
Shapiro is handing a strategic industry advantage to competitors instead of supporting responsible development. What Pennsylvania should pursue is rational economic and environmental policy: data center development paired with infrastructure investment, transparent standards and genuine community engagement.
If it doesn’t, the result will be predictable. Data centers will be built elsewhere. Tax revenue will be lost. Pennsylvania’s electricity exports, a source of economic value, will decline as other states capture the industry.
The state has the resources, the grid capacity, and the geography to compete. Instead, the governor chose political expediency over economic strategy.
Data center development should be transparent, environmentally responsible and locally informed. Pennsylvania can impose those standards without banning the industry. But Shapiro’s blanket restrictions go far beyond reasonable guardrails.
The governor should reverse course. The state should compete aggressively for this industry as it did historically when Gov. Shapiro welcomed data centers with his fast track permitting system.
This is a contributed opinion column. Prathyaj Mantha is a graduate student at the University of Virginia’s Darden School of Business with a background in environmental engineering and experience working on sustainability, water infrastructure and data-center issues. He is a Nomad Futurist Fellow and who research was recognized with the 2026 Excellence in Sustainable Development Award of the Institute of Industrial and Systems Engineers’ Excellence in UN sustainable development goals award 2026. The views expressed in this piece are those of its individual author(s), and should not be interpreted as reflecting the views of this publication. For more details on commentaries, read our guide to guest opinions at themorningcall.com/opinions.