System dynamics modeling reveals data center expansion shifts water stress to agricultural regions, indicating that volume limits fail without coordinated siting and allocation governance.
Data centers are Texas's fastest-growing electricity and water claimants, with interconnection requests exceeding 400 GW against an 86 GW peak. We develop a four-region system dynamics model that endogenizes compute demand, siting, and cooling choice around a within-region allocation cascade with irrigated agriculture as residual claimant. The model is anchored to Texas Water Development Board and ERCOT data and reproducing four independent observations without fitting. Results showed that local siting restraint never relieves nexus pressure. It displaces the buildout into water-scarce agricultural regions in a closed state, or exports the industry once demand turns footloose. Under a drought of record, irrigation absorbs nearly all shortage, accumulating 6.3 million acre-feet of foregone Panhandle supplies, while an 80% irrigation-protection reservation changes nothing. A dry-cooling mandate cuts direct water 78% at a 1.6% indirect penalty, and chip efficiency moves 2050 outcomes more than any policy lever. Governance must target allocation and siting jointly, not volumes alone.
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Rashed Albatayneh (2026) studied this question.
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