A loophole leaves Oklahoma data center water consumption largely untracked

On the western edge of Oklahoma City, just south of Route 66 and the city limits of Yukon, Pencia Truhan built the retirement she had always dreamed of. Her five-acre property is home to rescue horses, chickens and, most recently, a pig, surrounded by a spring-fed pond, scattered homes and open farmland.

But part of that rural landscape may soon give way to a $15 billion data center campus by Beltline Energy, less than half a mile away from her property — a project she believes will upend her life.

Truhan’s concerns are shared by many other rural Oklahomans facing similar proposals, ranging from noise and declining property values to rising electricity bills and the loss of farmland. But their biggest frustration is the frequent lack of transparency by developers and local government officials, particularly regarding water use.

“They don’t have to tell us what they’re going to do about water, how much they’ll use,” Truhan said. “I’ve talked to the guys from Beltline a few times at these meetings, and I’ve gotten different answers. They don’t even know what they’re doing or what their plan is.”

Pencia Truhan pictured with her rescue horses, Sooner and Calvin, at her property near the Oklahoma City–Yukon city limits on June 27, 2026. The proposed Beltline Energy data center would be built about a half-mile from her home, behind the trees in the background. photo by Juan Vassallo, Investigate Midwest

A bill signed by Gov. Kevin Stitt in May was meant to address some of those concerns.

Data centers, which store and process the digital information needed for everyday online activities, often consume large amounts of water to keep servers cool — especially the new hyperscale facilities typically built for artificial intelligence. Senate Bill 259, authored by Rep. Carl Newton and Sen. Brent Howard, both Republicans, allows groundwater permits only for data centers that use cooling systems designed to conserve and recycle water.

But in practice, data centers in Oklahoma do not need groundwater or surface water permits to operate. While there is no official count of how many data centers are currently operating in the state, Baxtel, a data center development advisory firm, lists 55 facilities in Oklahoma. None of those facilities have applied for a water permit. Instead, they purchase water from municipal utilities, creating a gap in state oversight that leaves their water use largely untracked.

“If a data center wants to purchase water, they can do that, and they do not get a permit,” said Julie Cunningham, director of the Oklahoma Water Resources Board. “If there’s a water supplier, if there’s a community or rural water district that has water rights for industrial use, then they buy water as a customer of that system. So far, we have not had any permits issued specifically to data centers.”

Water, or the lack of it, has been at the center of many of the issues affecting rural Oklahoma in recent years.

Drought has strained two of the state’s most important agricultural commodities: cattle and wheat. Years of dry conditions have forced many ranchers to reduce their herds, while wildfires fueled by drought have destroyed ranches in western Oklahoma. Wheat farmers are facing the worst harvest season in decades.

Longhorn cattle pictured on June 27, 2026, at Grande Horn Ranch near Interstate 40. The tree line in the background marks the site of the proposed Beltline Energy data center photo by Juan Vassallo, Investigate Midwest

The Ogallala Aquifer, one of the country’s most important groundwater sources, continues to decline as irrigation demands increase in the Panhandle. And in southeastern Oklahoma, residents have raised concerns about the impact of the growing number of industrial poultry farms on the local aquifer.

Now, data centers are adding a new source of competition for water, and many rural communities are turning water into a local political issue.

As companies look for sites for AI infrastructure, residents are learning about aquifers, groundwater permits and zoning laws. Many are questioning whether projects that promise technological progress — but create few permanent jobs and often receive generous tax incentives — are worth the strain on local resources.

The proposed data center campus would straddle the border between Oklahoma City and Yukon, with parcels in both municipalities along historic Route 66. With a planned capacity of 1,000 megawatts, the project could create an enormous new demand for electricity.

It would more than double the power demand of Google’s Pryor data center, one of the company’s largest facilities and the biggest in Oklahoma. At full capacity, the data center would require roughly the same amount of electricity as Oklahoma City’s average power use.

Two economic impact studies — one prepared for the city of Yukon and another for Oklahoma City — obtained by Investigate Midwest and commissioned by Beltline Energy estimate that the combined project would represent a $15 billion investment, with 15 buildings across 480 acres. The studies project the development would create 450 permanent jobs and generate $543.12 million in tax revenue over 25 years, although potential tax abatements would significantly reduce those projected benefits.

The Yukon portion remains pending because an agreement with the city has not been finalized, while the Oklahoma City portion awaits rezoning approval. It is unclear whether either part of the project would move forward separately.

Beltline Energy started as a renewable energy developer, securing land and developing solar projects before selling them to investors. The company is now using a similar model for data centers. While it has developed more than a dozen solar farms, it does not list any completed data center projects on its website.

In Oklahoma, the Atlanta-based company has at least two other proposed data centers: a 321-acre project in Piedmont and another 320-acre project in Luther. But Beltline has shared few details about its plans, which some see as a pattern of secrecy that has come to define much of the AI industry’s approach to new developments.

In April, when the company held a community meeting in Yukon to answer questions about the project, Beltline barred the media from attending and cut the meeting short.

The company also asked government officials of Yukon and Luther to sign non-disclosure agreements, sparking intense backlash in both towns. In Yukon, it led to the vice-mayor’s resignation and a petition calling for the mayor to step down. In Luther, the town board did not approve a non-disclosure agreement signed by the mayor, so it was never enforced, and the town later adopted a moratorium on data centers through year’s end.

People gather outside Luther Town Hall on June 9, 2026, for a public meeting on Beltline Energy’s proposed data center. With the crowd too large to fit inside, the mayor postponed the meeting. The Luther, Oklahoma town board later voted to impose a moratorium on new data center projects in Luther through the end of the year. photo by Juan Vassallo, Investigate Midwest

Investigate Midwest contacted Beltline Energy multiple times for comment. Ryan Sanders, the company’s founder, initially said he would send a “media package,” but never provided it and later stopped responding to requests for information.

What exactly do we know about water use and pollution at Oklahoma data centers?

Google’s data center in Pryor, Oklahoma, the largest in the state, uses an evaporative cooling system. The industry is trying to move away from that technology because much of the water evaporates into the atmosphere rather than returning to rivers or other water sources.

According to an investigation by The Frontier, Google purchases water from the state-owned MidAmerica Industrial Park, where the data center is located. The industrial park sources and treats its water from the Neosho River in eastern Oklahoma, about an hour from Tulsa.

A report by Google says the Pryor data center consumes 1.1 billion gallons of water per year, an amount equal to 8.3 billion water bottles or the annual water use of 10,000 average American households. Of the 1.1 billion gallons of drinking water the facility uses each year, about 275 million gallons are discharged back into the Neosho River. The rest evaporates.

The report does not say whether the wastewater from the Pyror data center has an environmental impact on the Neosho River. But a research paper published in June in the UC Law Environmental Journal concludes that cooling-water discharges from data centers “may have the potential to contaminate water resources and harm aquatic ecosystems.” The report also noted that “the lack of publicly available information makes it nearly impossible to definitively determine what these impacts may be.”

Beltline has requested extensions to submit the water agreement needed to finalize its purchase agreement with the city of Yukon, so it remains unclear whether the company plans to use an open-loop, closed-loop or air-cooled cooling system. (Open-loop systems, like Google’s Pryor data center, lose water through evaporation; closed-loop systems recycle water in a continuous loop, and air-cooled systems require little water but significantly more electricity.)

According to a planning memo, the city is considering selling Beltline up to 2.5 million gallons of wastewater per day — more water than what Google’s Pryor data center uses — and city officials have promised the project will not rely on drinking water because water supply is already a concern.

Yukon gets its water from 15 leased wells in the Garber-Wellington Aquifer and purchases additional supplies from Oklahoma City. With the well leases expiring in 2035 and Canadian County’s population growing faster than any other county in the state, officials were already weighing how to secure the city’s future water supply before the data center proposal.

Jordan Westfall, who represents Ward 2 on the Yukon City Council, points to a recent city-commissioned study projecting that Yukon’s current population of 27,300 residents will grow by about 23% over the next 25 years.

Westfall says he understands the benefits data centers can bring but believes a growing suburban and farming community like Yukon is the wrong place for one.

“In the same way that data centers are necessary, I would also point to [oil] refineries,” Westfall said. “They would never build a refinery in Yukon, Oklahoma.”

Oklahoma’s regulators are playing catch-up as data centers move ahead

Newton, the northwest Oklahoma Republican who authored the bill restricting groundwater permits for data centers, said he is working to close the loophole that allows them to operate without water permits.

“That is something that a new bill will address next year. They cannot get groundwater through a secondary source,” Newton said.

But the AI infrastructure boom is outpacing governments’ ability to regulate it. Since 2013, the industry has invested more than $1.6 trillion in the technology, oftentimes relying on regulatory gaps and avoiding traditional permitting requirements to accelerate construction. While lawmakers work to catch up, local communities have increasingly become the ones slowing or blocking developments.

Even if Oklahoma requires data centers to obtain water permits next year, that alone would not ensure the state knows how much water they actually use.

The Oklahoma Water Resources Board currently relies on an honor system of self-reported water use. In fact, Newton’s original proposal was not aimed at data centers at all. It would have required commercial groundwater users to install water meters, providing regulators with more accurate water-use data. After irrigation groups in the Panhandle opposed the measure, the metering requirement was removed and language addressing data centers was added instead.

The idea had already failed before. In 2023, Stitt, the state’s Republican governor, vetoed similar legislation after the Oklahoma Farm Bureau and other opponents argued it infringed on private property rights.

If lawmakers close the permitting loophole next year, it is unclear whether the Oklahoma Water Resources Board has the capacity to regulate the water use of a rapidly growing data center industry.

In 2025, the agency said it had fewer than 20 staff members to review an average of 250 permit applications and amendments each year, investigate issues and conduct fieldwork. The agency’s 140-page Water Demand Forecast, published last October, does not mention data centers.

“We’re trying to develop our expertise,” said Cunningham, director of the Water Resources Board. “I’ve got my chief engineer really trying to beef up on knowledge and going to the different meetings that we’re invited to.”