The Data Center Next Door
What AI’s Appetite for Water and Power Actually Means for Agriculture
Too long, didn’t read:
A large data center uses up to 5 million gallons of water per day, and Texas data centers could consume up to 161 billion gallons annually by 2030.
Water is where the rubber meets the road — data centers cool their servers by evaporating it, and in a state already drawing down the Ogallala Aquifer, a new industrial neighbor with a 5-million-gallon-a-day habit is not an abstraction.
The electricity concerns may be overstated, but the water concerns aren’t — closed-loop cooling technology exists that could dramatically reduce consumption, which means how hard farmers and ranchers push on permitting policy will directly shape how much water these facilities actually use.
Everyone is talking about it, but almost no one understands it
No one can ignore the latest industry coming to a field near you. Data centers are popping up everywhere to support the rapid growth in the use of artificial intelligence (AI), and, generally, people aren’t happy about it. Even with promises of jobs and tax revenue, it’s easy to see why people are scared of these centers and why some are even calling for moratoria. What will they draw from water and energy sources that are already stretched thin? Are the numbers being thrown around on the internet true? What does this mean for both municipalities and agriculture? Do we really need to worry, or is this all just being blown out of proportion?
At the end of the day, more data centers equals more draw on our natural resources. How much that will impact each of our daily lives and our businesses (and how much impact is too much relative to the benefits to our increasingly AI-driven economy) remains to be seen. But we aren’t without some answers that will give us a clue about what we’re in for.
What is a data center?
Data centers are the physical infrastructure behind the internet itself. They are the server farms that store your photos, run your bank’s website, process credit card transactions, and power AI tools. AI in particular has turbocharged demand. Training a single large AI model requires enormous sustained computing power, and those computers run hot around the clock.
Texas is a hot spot for this expansion, coming in second for the number of data centers within a state. Texas offers cheap energy, vast open land, a business-friendly regulatory environment, and its own independent power grid. There are already 458 data centers in operation or development in the state. Google announced plans for three additional Texas facilities in late 2025, costing $40 billion. OpenAI and Oracle’s Stargate campus in Abilene, with a projected capacity of 1.2 gigawatts, is already partly online.
Data centers are popping up all over the country with no signs of slowing down. While in some places people are fighting to keep them away, it seems they’ll eventually find their way into our communities. And that isn’t all bad. No one can deny the positive impact of AI on our lives and businesses. Is it all positive? Absolutely not, but these tools do represent transformational opportunity if used responsibly.
Data centers’ electricity usage is no joke
As reported by the International Energy Agency, an AI-focused data center uses as much as 100,00 households. However, the Abilene OpenAI Stargate data center is a 1.2 gigawatt (GW) facility, an amount of energy that could power 900,000 to 1 million homes. And that number is set to grow, with plans to expand the facility to 5 GW. Granted, this is probably the largest that a data center would get (at least for our current AI computing needs).
The scale of that growth becomes clearer when you look at ERCOT’s own long-term load forecast. In 2025, data centers registered essentially no load on the Texas grid’s official projections. By 2031, ERCOT projects they will account for 24,195 MW. That’s more than crypto mining (8,466 MW), industrial users (7,548 MW), hydrogen production (9,010 MW), and oil and gas (3,131 MW) combined. Total grid demand is projected to grow from 87 GW today to 145 GW by 2031, and data centers are the largest driver of that growth.
Electricity prices are a concern, but may not be as bad as you think
This is where the picture becomes less alarming, but not entirely reassuring. Data from the Energy Information Administration shows that electricity usage and prices have historically had a weaker correlation than most people assume. When demand rises, generation capacity tends to expand to meet it, which keeps prices in check.
Researchers at Carnegie Mellon University estimate that AI-driven data center growth could push electricity bills up by roughly 8% nationally, though some regional markets could see increases as high as 25%. Scientists at Lawrence Berkeley National Laboratory add that sustained demand growth can actually reduce costs over time through scale and efficiency gains as long as new generation capacity comes online fast enough.
The key caveat is Texas specifically. ERCOT projects a potential supply shortfall as early as 2027. When we model Texas electricity prices using natural gas prices as a proxy (a reasonable approach given the state’s generation mix), we estimate prices could increase by approximately 25% by 2035 under a high-demand scenario.
That said, this scenario assumes new generation capacity fails to keep pace with demand, which is not guaranteed. Projects are ramping up to add new capacity to ERCOT, and solar and wind interconnection requests in the state are running five-to-one over natural gas requests. The picture is volatile, but not predetermined.
Will we have enough water to drink?
The electricity numbers are concerning, but the water numbers deserve serious attention. Data centers use water primarily for cooling by running it over hot server equipment, then evaporating it to release heat. The scale varies widely depending on cooling technology. An average data center uses about 300,000 gallons per day. A larger hyperscale facility can consume up to 5 million gallons per day, which is equivalent to a town of up to 50,000 people. According to research by the Houston Advanced Research Center (HARC) and the University of Houston, data centers in Texas used an estimated 49 billion gallons of water in 2025. Projections suggest that the number could reach 399 billion gallons by 2030, nearly an eightfold increase in five years.
It would be incomplete not to compare data center water use to agriculture’s own footprint, and frankly, it’s information you need to have before someone else uses it against you. The High Plains Water District’s 2021 Irrigation Assessment Program found an average of 15.3 acre-inches of water applied per acre of irrigated corn. At 27,154 gallons per acre-inch, that’s approximately 415,000 gallons per acre. Multiply that by the 920,272 irrigated corn acres in Texas in 2025, and you get roughly 3.82 trillion gallons of water applied to corn alone every year in the state.
To match that level of consumption, you’d need approximately 209 hyperscale data centers operating at full capacity simultaneously, and we’re nowhere near that yet. Even under HARC’s higher projections, data center water use in Texas won’t approach agricultural scale within the next five years.
If you’re going to make the case that data centers are straining local water supplies, and that case is absolutely worth making, you’ll want to be ready for the moment an AI executive points to agriculture’s water footprint and tries to turn your argument around. The response is simple: agricultural water use feeds people, supports rural economies, and has been part of these communities for generations. Data center water use cools servers. Those are not equivalent uses, and we should say so plainly. But walking into that fight without knowing your own numbers is how you lose it.
Furthermore, there is a silver lining in the data center cooling technology itself. Closed-loop cooling systems that recirculate rather than evaporate water can reduce consumption dramatically. Some newer facilities report daily consumption comparable to a handful of households rather than a small city. The gap between the worst and best performers in the industry is enormous, which means policy has leverage here. To learn more about data center cooling, take a look at this infographic from Microsoft.
How farmers can get involved
Texas agriculture was already under pressure before the data center boom arrived, losing nearly 18,000 farms between 2017 and 2022 due to drought, rising input costs, and consolidation, according to the USDA 2022 Census of Agriculture. Data centers are now competing for the same land, water, and electricity that remain. Whether that competition accelerates farmland loss is still an open question, but it is one that farmers and ranchers have every reason to be watching closely. Here’s where your attention is best spent.
1. Get Involved in Water Policy Before the Permits Are Filed
Groundwater conservation districts and river authorities make the decisions that determine whether a data center can drill a new well or tap a local aquifer. These are locally elected or appointed bodies, and they respond to organized constituent pressure. The Texas Farm Bureau is already engaging the legislature on interim charges related to data center oversight. This is exactly the moment to show up to your local groundwater conservation district board meetings, submit public comments, and make sure agricultural water rights are represented in any new permitting frameworks.
Several states are now considering requiring data centers to disclose water use, meet efficiency benchmarks before permits are issued, or demonstrate they won’t deplete local supplies. Texas SB 6 (2025) began addressing grid strain from large loads, and water-side regulation is the next frontier. Advocate for it.
2. Understand Your Electricity Rights and Costs
ERCOT’s deregulated market means that large industrial customers can negotiate different rate structures than small agricultural users. If you’re irrigating on ERCOT, now is the time to review your electricity contracts, understand your exposure to wholesale price spikes, and explore whether time-of-use pricing or demand response programs could reduce your risk, if they are available.
Cooperatives and agricultural associations may also have leverage to negotiate group rates or demand that public utility commissions require large loads like data centers to contribute more to grid infrastructure costs, rather than having those costs spread to all ratepayers.
3. Consider Whether There’s a Deal to Be Made
This is the hardest one to say in a sustainable ag newsletter, but it’s worth saying: some farmers are finding exits, and some of those exits are data centers. If you’re in a county where the aquifer is declining, your input costs are rising, and you’re looking at whether the next generation wants the operation, a land sale at data center prices may be a better outcome than being stuck with land that isn’t used.
That kind of decision should be made with full information and genuine choice, not under financial duress or because water policy failures made farming unviable. The goal of engagement is to make sure agriculture isn’t squeezed out by a policy vacuum.
The Bottom Line
Data centers aren’t going away, and I don’t believe we want them to. However, the electricity and water demands of AI infrastructure are growing faster than most projections anticipated even two years ago, and in water-stressed rural regions, concentrated local impacts can be severe even when national-scale comparisons look manageable.
The picture isn’t one of inevitable catastrophe, either. New generation capacity is coming online, and cooling technology is improving. Plus, we have the power to help shape the policy around this, both locally and nationally.
Agriculture has navigated the arrival of pipelines, wind turbines, and mineral extraction on its land before. Each of those came with tradeoffs and cautionary tales from those who engaged too late. The data center boom is no different. The people who will fare best are those who show up informed, organized, and ready to negotiate, not those who simply hope the next campus gets built somewhere else.
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