Alberta’s government has exempted Kevin O’Leary’s Wonder Valley data centre near Grand Prairie from a provincial environmental impact assessment, a decision that clears a major regulatory hurdle for the project billed as the world’s largest AI data centre industrial park. The exemption, outlined in a letter from the province’s environment ministry dated this week, raises questions about oversight for a facility poised to consume 7.5 gigawatts of power and 24 million cubic meters of water annually.
The letter, addressed to Paul Palandjian, CEO of O’Leary Ventures, confirmed that the project is not classified as a mandatory activity requiring environmental review. Karen Tomashavsky, acting manager of the approvals program, noted the decision could be revisited if new information emerges, but for now, no screening or assessment report will be prepared.
This green light comes despite the project’s staggering resource demands—its power needs are roughly seven times the output of British Columbia’s Site C dam.
Environmental concerns are mounting over Wonder Valley’s reliance on natural gas for power generation. Initial plans touted geothermal energy as a component, but internal communications from the Municipal District of Greenview, where the project is located, reveal those plans were abandoned in favor of gas exclusivity. Will Noel, a senior analyst at the Pembina Institute, warned that if emissions from this setup go uncaptured, the project could erase two decades of Canada’s carbon reduction gains, equivalent to reversing the phase-out of coal.
Water usage adds another layer of contention. The estimated annual draw of 24 million cubic meters—comparable to the lifetime consumption of 460,000 people—clashes with regional constraints. The nearby Little Smoky River, already Alberta’s most overdrawn watershed in 2016, has faced withdrawal bans, while the Smoky River, second-most overdrawn, is limited to supplying six million cubic meters yearly to the Greenview Industrial Gateway, the industrial park hosting Wonder Valley. Last summer, Greenview declared an agricultural disaster due to drought, amplifying fears that data centres could outcompete farmers and ranchers for scarce resources.
Alberta’s broader push for a data centre boom, backed by a November 2025 memorandum of understanding with the federal government, aims to attract $100 billion in investments over five years. The agreement promises thousands of megawatts of AI computing power and includes exemptions from federal Clean Electricity Rules for gas-powered facilities not tied to the provincial grid, like Wonder Valley. However, three-quarters of proposed data centre projects in Alberta sit in high or extreme water stress zones, heightening risks of resource conflicts.
Federal oversight remains a wildcard. While Alberta has waived its assessment, Tomashavsky advised O’Leary’s team to consult the Impact Assessment Agency of Canada for a potential federal review.
No decision on that front has been confirmed as of now.
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