Texas' stampede to build data centers could come with a steep price at the tap. A new University of Texas study warns that if the current buildout keeps roaring ahead, data centers and the power they rely on could be using as much as 9% of all water in the state by 2040, up from under 1% today. The warning lands as Texas endures a year-long drought, and state planners say roughly $174 billion in projects will be needed over the next 50 years to avoid a severe water crisis.
The COMPASS white paper, "Water Use Requirements for Data Centers in Texas," models several futures in which data centers account for roughly 3% to 9% of statewide water demand by 2040, depending on how fast the sector grows, which cooling technologies win out, and what the power mix looks like, according to COMPASS. The estimate factors in both the water used directly on site for cooling and the "indirect" water required to generate the huge amounts of electricity those facilities pull from the grid.
UT Austin researchers say that the wide range reflects major unknowns, from whether operators lean on reclaimed water to which cooling systems become standard. "There’s a lot of uncertainty surrounding the water use for data centers," Mariam Arzumanyan told UT Austin News. For now, data centers still make up less than 1% of statewide use, compared with roughly 7% for manufacturing.
Energy and cooling make the footprint much bigger
It is not just the server halls themselves that matter. Thermoelectric power plants that generate the electricity feeding those data centers also use significant amounts of water for cooling, which multiplies the sector's real footprint. As outlined in the COMPASS white paper, choices such as evaporative cooling towers, chiller systems, or reclaimed water loops can dramatically reshape local impacts and infrastructure demands, especially in Texas' hotter and more humid regions.
A costly backdrop: drought and a $174B gap
All of this is unfolding against a backdrop that is already tense. The state's draft water plan projects that about $174 billion in projects will be needed over the next half-century to steer Texas away from a severe water crisis, according to The Texas Tribune. At the same time, roughly 82% of the state is experiencing at least some level of drought, heightening the pressure on local utilities and planners, per the U.S. Drought Monitor.
Where the pressure lands
The COMPASS team notes that most of the new buildout is clustering around the state's big tech and energy hubs, including Dallas, Houston, Austin, and San Antonio. Industry trackers count hundreds of data center facilities either operating or on the drawing board across Texas, according to UT Austin News. That growth is already crashing into local resistance, as rural residents and some county officials push back over worries about water use and strain on the power grid, a wave of opposition captured in reporting on how farm towns revolt.
Tools and fixes that researchers offer
The white paper does not just sound the alarm; it offers a few tools. The authors urge three broad fixes: stronger communication among stakeholders, clearer mapping of where projects are likely to land, and integrated planning that treats hydrology, the electric grid, and land use as one connected problem. Those recommendations run through media summaries of the report. Researchers are also testing technical options, including geothermal power and new thermal materials that could lower cooling needs and ease water demand if they scale up, according to reporting by FOX 7 Austin and TechXplore.
That leaves local officials, utilities, and developers with a stark choice: bake water stewardship into the next wave of data centers or risk replaying the kind of last-minute scramble for supply that helped drive the state's updated $174 billion plan. The COMPASS paper does not wade into the politics, but it does hand planners a shared set of numbers and tools to start those fights, and a clear picture of what Texas stands to lose if it does not.
