Why It Matters

Data centers in the U.S. consumed about 17 billion gallons of water in 2023, tripling the 5.6 billion gallons used in 2014, according to a 2024 report from the Lawrence Berkeley National Laboratory. The expanding use of artificial intelligence and other trends in computing have contributed to increased development of data centers. The federal government has not conducted a systematic assessment of data center water use, and there is no comprehensive federal data collection on data center water use.

A new Congressional Research Service (CRS) report, published Friday, July 31, lays bare the policy vacuum. The report finds that data centers now account for approximately 2 percent of total U.S. water consumption; while this figure may sound modest, a single 100-megawatt facility may directly consume the equivalent water of 2,600 households per day. An estimated 97 percent of U.S. data center water needs are supplied by municipal water systems.

The Big Picture

The CRS report examines the growing tension between rapid data center expansion, driven by artificial intelligence, cryptocurrency, and cloud computing, and its strain on local and national water resources. Executive Order 14318 directed a review of Nationwide Permits (NWP) and consider whether a specific NWP was needed to facilitate efficient permitting for data center projects.

The regulatory landscape remains fragmented with data centers use either air cooling or liquid cooling systems. Evaporative water-cooled systems are more energy-efficient but consume substantially more water than air-cooled systems, which use no water but require significantly more electricity.

When data centers discharge water, they release cooling system blowdown, domestic wastewater, stormwater runoff, and construction-phase discharges, according to the report. Pollutants can include total dissolved solids, chlorine, metals like copper and nickel, biocides, corrosion inhibitors, and pH-altering chemicals.

The Bureau of Reclamation and the Army Corps of Engineers own major water infrastructure, but generally, do not directly contract with data centers for water supply.

Political Stakes

For Congress

Multiple bills in the 119th Congress aim to fill the gap in data center water data collection, but only one relevant provision was enacted through the National Defense Authorization Act. The FY2026 Defense Authorization Act expanded the Department of Defense's High Performance Computing Roadmap to include estimates of electricity and water usage from data centers on military installations.

Other pieces of legislation have been referred to committee, including H.R. 5227, the Unleashing Low-Cost Rural AI Act; H.R. 5332, the Liquid Cooling for AI Act of 2025; and H.R. 6900, the American Affordability Act of 2025.

For the Public

Major infrastructure decisions affecting water supplies are being made without adequate federal visibility or coordination. Congress has historically ceded water management to the states, but data centers operate nationally and globally. A company building a facility in Arizona or Louisiana makes decisions based on land costs, electricity prices, and tax incentives—not federal water policy, because there effectively is none. Meanwhile, local water systems scramble to accommodate demand they often didn't anticipate.

The Bottom Line

The report reveals that data center water policy exists in a governance void. The federal government cannot answer basic questions about how much water these facilities consume, where the water comes from, or whether current discharge practices threaten water quality. Until Congress acts, the nation's fastest-growing computing infrastructure will continue drawing from municipal water systems, in a sector the federal government does not systematically monitor.

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