XGS Energy official says New Mexico’s geothermal potential could spur job creation, tax revenue in rural communities

XGS Energy’s planned geothermal plant in northwestern New Mexico is “only a fraction of the broader opportunity” for the state, a company official said Monday, as it and others race to tap new energy sources to meet the surging power demands of artificial intelligence and the data centers behind it.

Logan Stephens, XGS Energy’s vice president and head of development, made the comment during a presentation to members of the Economic and Rural Development and Policy Committee at a meeting in Los Lunas. He was joined by a group of geothermal stakeholders — including members from New Mexico Tech and Project InnerSpace — presenting the state’s geothermal potential to legislators.

Of note were Stephens’ remarks surrounding the market opportunity for XGS Energy over the next five years to produce “several thousands of megawatts” in New Mexico across private, state, federal and tribal lands.

“The projects we develop are intended primarily to serve utilities and large-load customers, be that data centers, manufacturers, desalination plants, greenhouse facilities, you name it,” Stephens said.

Stephens’ comments, while brief, are one of the first from the company to local officials following the June announcement that it plans to build a geothermal plant in northwestern New Mexico capable of supporting 150 megawatts of geothermal energy, drawn from heat produced in the Earth’s interior. The project would be constructed in partnership with Meta Platforms Inc., the tech company competing in the race to build powerful AI tools.

The company did not say Monday where the site would be located, but Stephens said the opportunity presented by the development of geothermal energy could spur job creation and tax revenues in “largely rural communities in the state.”

That could be the case. A 238-page report from Project InnerSpace released in June — the same time as XGS Energy’s announcement — ranks New Mexico No. 6 among U.S. states for geothermal potential. That report, also mentioned during Monday’s meeting, explains how a combination of subsurface heat abundance, oil and gas expertise and political support positions the state to rapidly expand geothermal development.

“So far, we’ve published three of these: One for Texas, Pennsylvania and, proudly and most recently, for the state of New Mexico,” said Jackson Grimes, Project InnerSpace director of global engagement. “Between working on all three of those projects, I really do believe that New Mexico is above and beyond the place where the future of geothermal is going to take place.”

If XGS Energy completes its geothermal power plant — which is estimated to cost $1.2 billion in two phases — and has it operational by 2030, it would be the second such site in New Mexico, joining the Lightning Dock in Hidalgo County.

Stephens reiterated to the committee that XGS Energy’s plant, once operational, would require no water use as a result of the technology it uses — allowing the company to build such sites in other water-strained areas of the state.

The northwestern plant, in particular, would help power Meta’s data center in Los Lunas. The California-based technology company is involved in an AI race that will increase the demand for such data centers, though it is unclear if Meta plans to build more of those facilities in New Mexico. Recently, Bloomberg News reported that Meta finalized a $14.3 billion investment in Scale AI.

New Mexico’s 163 gigawatts of geothermal potential could be the perfect fit to power the data centers Meta — and others — will need. Research from Goldman Sachs earlier this year projected there would be a 165% demand growth for data center power by 2030.