Texas explores using treated oilfield water for data centers to conserve freshwater
Texas lawmakers and industry leaders are exploring the use of treated produced water from oil and gas operations as an alternative source for data centers and other industrial needs. This approach aims to conserve freshwater supplies for communities. The Permian Basin alone generates a significant volume of this highly saline water, presenting a potential new resource for the state.
Following a recent Texas House Natural Resources Committee hearing on data center water consumption, discussions have focused on protecting Texas's freshwater supplies while supporting economic growth. Scott Mitchell, CEO of Deep Blue, advocates for using produced water—highly saline water extracted alongside oil and gas—as a viable alternative to freshwater for industrial purposes, including data centers.
Produced water, which does not deplete aquifers, rivers, or lakes, represents a significant untapped resource. The Permian Basin alone generates between 840 million and 1 billion gallons of produced water daily. The Greater Edwards Aquifer Alliance's April 2026 report, "Data Centers in Texas: A Review and Call for Innovation and Regulation," recommends exploring partnerships between data centers and the oil and gas industry for treating and reusing produced water, as well as imposing higher water rates for data centers to incentivize alternative water sources.
While treating produced water is expensive, the increasing demand from AI, data centers, and associated power generation is changing the economic viability. Sharing the cost of treatment across a broad user base would provide data centers and power plants with a secure, dedicated water supply, reducing reliance on municipal freshwater and relieving pressure on community resources. Technologies for treating and recycling this water already exist, making it a significant opportunity for Texas.