COMMENTARY: Banning data centers won’t solve water problems in the West

Oshkosh, Wisconsin officials are evaluating a one‑year moratorium on new data‑center construction citing concerns over groundwater depletion and on‑site water use. The move reflects a broader trend as communities across the arid West grapple with the rising water demands of the data‑center boom. Proponents of restrictions argue that large facilities consume millions of gallons daily for cooling, exacerbating chronic shortages in states already under stress. In Phoenix, water use for data‑center cooling is projected to increase by 870 percent. Utah Clean Energy estimates that the planned Stratos hyperscale project could raise annual water demand by 16.6 billion gallons. Yet examples exist of facilities that minimize water consumption. A hyperscale installation in Phoenix is projected to conserve 138 billion gallons each year by employing an advanced thermal‑cooling system. Such technologies illustrate that water scarcity need not halt development. Policy responses are already emerging. The Tucson City Council denied annexation and municipal water access for Project Blue, although Pima County later approved the broader proposal. In Utah, Bar H. Ranch withdrew its water‑rights application for Stratos after receiving thousands of protest letters, highlighting how water concerns are shaping siting decisions. Data centers remain vital to the modern economy. The surge in generative‑AI workloads has accelerated demand for digital infrastructure. The sector supports millions of construction jobs, hundreds of thousands of permanent positions and generates billions in tax revenue; it contributed $727 billion to national GDP. Rather than imposing bans, lawmakers should encourage water‑wise practices. Several states have adopted permitting requirements, mandatory water‑use reporting and tax incentives to promote efficient cooling. Offsetting the costs of low‑water technologies makes developers more likely to invest in systems such as closed‑loop or net‑zero cooling. As these solutions become more widely available, targeted incentives can accelerate their adoption. Water‑conscious policies can protect scarce resources while sustaining the digital infrastructure that fuels economic growth. The challenge is not whether data centers should exist, but how to manage their water footprint through innovation rather than prohibition. Peter Clark resides in Arizona.