As AI data centers eye Lufkin, officials and residents debate water use and oversight

Lufkin, Texas, is grappling with public and official debate over two proposed artificial intelligence (AI) data center projects: the Amp Z campus at a former paper mill site outside city limits, and Nevada-based 1606 Corp's acquisition of the former Aspen Power plant within Lufkin. These projects have ignited controversy, primarily over their projected water and electricity demands, mirroring a larger statewide data center boom that the Houston Advanced Research Center (HARC) forecasts will significantly increase Texas's energy and water consumption by 2030. Local leaders, including Lufkin Mayor Mark Hicks, County Judge Keith Wright, and State Senator Robert Nichols, champion the projects as a unique opportunity to expand the tax base, revitalize industrial properties, and position Angelina County as a technology hub. They argue that Lufkin's existing water rights, secured after the paper mill's closure, are ample for such industries. City Manager Kevin Gee pushed back on high water usage claims for Amp Z, stating the city's understanding of operational needs is much lower than publicly circulated figures. However, a strong opposition movement, spearheaded by groups like "Stop AI Data Centers — East Texas" and residents like Kate Armstrong, voices deep skepticism. An informal Lufkin Daily News poll revealed 85% opposition among respondents, driven by fears of water scarcity impacting daily life, agriculture, and the regional economy. Critics, including Conner Posey, also question the low number of permanent jobs cited for the projects relative to their resource demands, suggesting benefits may not outweigh the costs for ordinary residents. They also highlight the limited municipal oversight over the Amp Z project due to its location outside city limits. The statewide context is also a factor, with ERCOT restructuring to handle unprecedented demand growth from large-load customers like data centers, and the Texas Legislature expected to examine groundwater policy, including the “rule of capture.” Other East Texas counties, such as Polk County, are already developing impact permit frameworks for high-load facilities, and the Pineywoods Groundwater Conservation District has revised its rules to better manage large-scale groundwater pumping projects.