data centers and water resource

A large-scale artificial intelligence data center appears to be planned for 1,041 acres at the site of the former Southerland Paper Mill in Lufkin near Paper Mill Creek. Verdant Industries, LLC, and Verdant Industries Realty, LLC, granted Amp Z Champion Data Center Holdings LLC the right to purchase the property. Amp Z in turn said it is leading the development of a gigawatt-scale data center campus built to serve hyperscale users with both immediate electrical capacity and room for future expansion. The city of Lufkin said the project could represent an estimated $1.05 billion in private capital investment and could support about 500 construction jobs over four plus years and about 30 full-time operational positions when completed. The site has an electric substation capable of delivering 55 megawatts of power with plans to scale be-yond 2.1 giga watts through a combination of utility service and onsite generation by 2029. The company also says the site has access to about 20 million gallons of water per day. According to the city, project representatives estimate the facility would use approximately 500 gallons per day, comparable to the usage of three homes. Mayor Mark Hicks said that the proposal was a once-in-a lifetime project for Angelina County with a billion-dollar investment. He said that Angelina County has access to so much water and they could make use of it. He also mentioned that the city could sell water to the company. Company material mentions the site is an unincorporated portion of the county with no building code or zoning restrictions. Amp Z says the property is eligible for opportunity zone incentives, Foreign Trade Zone designation and potential Texas data center tax abatements. The growth of Artificial Intelligence (AI) necessitates the building of large data centers with computer servers that process, store, and distribute digital information. These facilities, in turn, require large amounts of electricity and water. While there are regulations regarding developers connecting to the electrical grid, there is less over-sight for draining the aquifers. Some East Texas counties have concerns about data centers that high-volume industrial users could deplete our water resource that is more plentiful in the eastern part of our state. Rural communities are especially vulnerable to attempts to pump large quantities of water from a limited aquifer.
Last year Henderson, Anderson, and Cherokee County (Neches and Trinity Valley Groundwater Conservation District) contested permits for Kyle Bass’ 43 wells on the Carrizo-Wilcox Aquifer. Houston County also has concerns, but has no groundwater conservation district. The goal reportedly is to pump up to 15 billion gallons of water annually to export water to Dallas/Fort Worth. Mr. Bass, CEO of Conservation Equity Management, argues that the project is necessary to address state water shortages. This fall, however, a court-approved settlement paused the issuance of large-volume permits until additional aquifer studies are completed. Back in February, Van Zandt County Commissioners unanimously passed a temporary moratorium halting permitting, construction, and related activities for proposed solar, wind, and battery energy storage projects. This pause is reliant on Texas Attorney General Ken Paxton’s Investigation launched in November 2025 into risks from CCP-aligned (Communist Party of China) foreign components . CATL batteries, for instance, might threaten the grid and public safety. CATL (Contemporary Amperex Technology Co., Limited) is the world’s largest EV battery producer.
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