Data-Center-West-Texas- The Texas State Capitol dome with a waving Texas flag and a blue sky highlights Chemstar Water, underscoring its vital role in supporting West Texas data center water solutions. The Chemstar Water logo is superimposed in the center of the image.

The Game-Changing Resource Powering Hyperscale Growth


Data Center : West Texas

By Cem “Gem” Candir, CEO, Chemstar WATER

Drive across the Permian Basin today and two things stand out: natural gas flares lighting the horizon, and ponds brimming with produced water—

—a byproduct of oil extraction. According to the Texas Railroad Commission, nearly 33 million barrels of this highly saline water are generated daily. Traditionally, this water has been injected back underground, but increasing concerns about induced seismicity have led to tighter restrictions on disposal wells.

But what if this “problem” water could become a valuable asset?

Pair stranded gas, abundant brackish water, and flat land as far as the eye can see, and West Texas begins to look like the ideal site for the next data center boom. This blog explores why West Texas is uniquely positioned to power hyperscale data centers, how produced water treatment fits into the equation, and what this means for data center operators, oil & gas producers, and local communities.

Table of Contents

    • A Perfect Storm for Off-Grid Data Centers

    • Why This Matters for Operators, Oil & Gas, and Communities

    • Produced Water Treatment for Industrial Cooling

    • The Strategic Case for West Texas Hyperscale

    • Conclusion: West Texas Data Center Water Is an Opportunity

A Perfect Storm for Off-Grid Data Centers

Reason to Build in the Permian Basin

West Texas offers a rare convergence of resources and conditions that make it an ideal location for hyperscale data centers looking to operate off-grid or with minimal reliance on municipal infrastructure.

Reason Why It Matters
Fuel at the fence line Associated natural gas is cheap and abundant. Combined-cycle power plants can convert this gas into reliable 24/7 electricity without the long wait times for grid interconnect approvals.
Cooling water no one else can use Produced water, once treated to industrial specifications, can be used in hybrid or evaporative cooling systems, eliminating the need for municipal water and avoiding injection well restrictions.
Latency matters less than throughput AI and machine learning workloads prioritize massive compute density and throughput over ultra-low latency. This means proximity to metro fiber isn’t as critical as reliable power and water.
Regulatory tailwinds Diverting produced water from disposal wells reduces seismic risks and improves ESG profiles for oil producers, creating incentives for collaboration.

The vision isn’t theoretical. Kevin O’Leary’s 7.5 GW “Wonder Valley” campus in Alberta has already proven that off-grid, water-secure data centers can scale. West Texas offers the same ingredients—minus the Canadian winter.

Why This Matters for Operators, Oil & Gas, and Communities

Data Center Operators

Secure, affordable power and cooling are the lifeblood of data centers. West Texas offers a unique opportunity to combine these critical resources on-site, avoiding costly and time-consuming grid interconnect queues and water rights disputes common in urban markets.

Oil & Gas Producers

Produced water has long been a liability—expensive to treat and dispose of, with environmental risks. By partnering with data centers, oil producers can monetize this byproduct, transforming it into a valuable industrial water supply and reducing environmental impact.

Local Communities

Data centers bring high-tech investment, jobs, and economic diversification to West Texas. At the same time, reducing natural gas flaring and limiting produced water injection lowers emissions and seismic risks, benefiting public health and safety.

Produced Water Treatment for Industrial Cooling

Produced water typically contains TDS concentrations of 30,000 to 300,000 mg/L, making it unfit for direct use. However, emerging treatment technologies—including ceramic membrane filtration, electrocoagulation, and ion exchange—can bring this water to spec for industrial cooling applications.

For hybrid or evaporative cooling systems common in hyperscale facilities, polished produced water is a viable, sustainable solution. With proper treatment and monitoring, this approach aligns with water-energy nexus priorities and ESG goals.

Importantly, this strategy reduces demand on potable or agricultural water supplies, aligning with community and regulatory expectations. Vertical integration in treatment solutions ensures better quality control, faster deployment, and cost savings.

Emerging Treatment Technologies Include:

  • Ceramic Membrane Filtration: Durable membranes that remove suspended solids and reduce scaling potential.

  • Electrocoagulation: An electrochemical process that destabilizes contaminants and aids in their removal.

  • Ion Exchange: Removes dissolved salts and hardness ions to prevent corrosion and scaling.

Benefits of Using Treated Produced Water:

  • Zero municipal water draw: Conserves precious freshwater resources.

  • Zero injection risk: Avoids regulatory and seismic risks associated with disposal wells.

  • Cost savings: Reduces water procurement and disposal costs.

  • Sustainability: Supports circular water use and reduces the carbon footprint of data center operations.

Vertical integration of treatment solutions—from produced water sourcing to polishing and delivery—ensures better quality control, faster deployment, and lower overall costs.

The Strategic Case for West Texas Hyperscale

West Texas offers a rare combination of advantages that make it a compelling choice for hyperscale data center development:

  • Stranded Energy: Abundant natural gas that is often flared or underutilized can be converted into reliable onsite power.

  • Non-Potable Water: Produced water, once treated, provides a sustainable cooling resource without competing with local communities for freshwater.

  • Low Land Costs: Vast, flat, and affordable land parcels allow for horizontal expansion and future growth.

  • Reduced Permitting Friction: Compared to congested urban areas, West Texas offers faster permitting and fewer regulatory hurdles.

  • Rapid Deployment: AI training demands are growing exponentially. West Texas sites can move from concept to commissioning much faster than urban locations constrained by infrastructure and regulatory bottlenecks.

Together, these factors create a strategic advantage for companies seeking to build next-generation hyperscale campuses optimized for AI and high-performance computing workloads.

And most importantly, it’s ready now. AI training demands are growing exponentially, and speed to deployment is critical. Unlike congested urban markets, West Texas sites can go from concept to commissioning in a fraction of the time.

Conclusion: West Texas Data Center Water Is an Opportunity

The takeaway is simple: when AI training throughput outranks low-latency metro access, the winning sites are those sitting on both fuel and “free” cooling water. West Texas checks every box.

With the right water treatment partner, this region isn’t just viable—it’s optimal for next-generation hyperscale campuses. If you’re planning a new build—or looking to monetize idle produced water—it’s time to talk.

If you’re planning your next hyperscale build—or wondering what to do with idle produced‑water volumes—let’s talk.

About the Author

Cem “Gem” Candir is the CEO of Chemstar WATER, a leader in industrial water treatment solutions. With deep expertise in water management for data centers and energy sectors, Cem drives innovation at the intersection of sustainability and technology.