The Proliferation of Data Centers and Their Unquenchable Thirst

By: Isabelle Munsell

We are told the digital economy is weightless, a realm of pure information. Yet its most critical physical infrastructure—the data center—consumes water at alarming rates, governed by America’s oldest and most divergent water laws. This creates hidden sacrifice zones where technological progress is paid for with the foundational resource of communities that can least afford to lose it. With AI’s expansion, data centers can use up to five million gallons daily—equivalent to a town of 10,000 to 50,000 people—in a nation where 30 million already face water scarcity. This post explores how data centers leverage financial power and regulatory gaps within the Western prior appropriation system, exacerbating water scarcity and quality issues while systematically offloading burdens onto Disadvantaged Communities (DICs).

The prior appropriation system, dominant west of the 100th meridian, operates on “first in time, first in right.” This doctrine severs water rights from land ownership, creating a property right perfect for a market. A user secures a right through intent to divert and apply water to a “beneficial use,” historically defined as irrigation, mining, or industrial purposes. While offering predictability, this 19th-century framework is catastrophically misaligned with 21st-century challenges. It is rigid, encourages hoarding through “use it or lose it” rules, and lacks a mechanism to weigh comparative societal value. It allocates “paper water” based on historical, wetter climate flows that no longer exist as “wet water.” Crucially, it financializes water, favoring entities that can outbid others. Finally, a major regulatory gap exists: the Clean Water Act regulates pollution discharge, but prior appropriation governs allocation, leaving the massive consumptive use of water—where it is evaporated and not returned—largely unaddressed.

Data centers are water-intensive industrial facilities. Their primary demand comes from cooling the immense heat generated by servers, often through evaporative cooling towers where water is lost to evaporation—a permanent removal from the local hydrological cycle. The concentrated, chemically treated wastewater from this process must be discharged, impacting water quality. When siting these facilities, companies seek municipalities willing to sell water rights or, in prior appropriation states, directly purchase senior agricultural water rights. By injecting a massive, permanent, and senior claim into over-allocated basins, data centers directly reduce the water available for junior users. Furthermore, by consuming water, they reduce streamflow, diminishing the dilution capacity for pollutants from all other sources, effectively worsening water quality downstream.

The impact is not neutral. Data centers are systematically sited in or near DICs, defined by cumulative burdens of socioeconomic vulnerability and pre-existing environmental stress (e.g., using EPA EJSCREEN tools). Research in California shows data center clusters are in the state's top 20% most polluted areas. Nationally, communities within one mile of data centers face air pollution levels above the median, with pollution burdens falling disproportionately on communities of color. This creates a dual crisis for DICs. First, they face the loss of water security as data centers secure senior rights. Second, they endure compounded air pollution from backup diesel generators and onsite power, adding to a cumulative “pollution burden” linked to severe health outcomes like asthma. Promised benefits like job creation frequently fail to materialize or offset these harms. Outdated industrial zoning and a lack of transparency or community consent in siting decisions perpetuate this environmental injustice. The collision between 21st-century infrastructure and 19th-century water law creates a predictable inequity. Technical fixes like efficient cooling are necessary but insufficient if a “waterless” data center is built in an air-polluted DIC. Solving this requires foundational legal and policy reform.

States must modernize water law by introducing a “public welfare” test for new water rights, allowing regulators to consider community and ecological health beyond narrow “beneficial use.” Mandated transparency in water use and emissions is non-negotiable. Most critically, DICs must be granted substantive agency through legally enforceable Community Benefit Agreements and required Health Impact Assessments co-designed with residents. The sustainability of our digital future depends not on server efficiency, but on the justice of its foundations. We must reform the systems that allow technological progress for some to come at the expense of water and health for others.