The developer of what will be California’s largest AI data center is suing to gain access to Colorado River water, a threatened freshwater source for 40 million people and the subject of countless water-use disputes in Western countries.
The lawsuit, filed this month by Imperial Valley Computer Manufacturing Co., says the company needs access to 287 million gallons of water for its 330-megawatt data center. If built, a proposed project in Southern California’s Imperial Valley would become the state’s largest AI data center.
The lawsuit was filed after the Imperial Irrigation District, the local agency that supplies Colorado River water to the Imperial Valley, denied the company’s request for water for the project. It’s also influenced by the backlash against data centers in communities across the United States. The Colorado River is the Imperial Valley’s only source of fresh water and has faced drought and water supply problems for years.
Developer Sebastian Rucci said the project would not increase overall demand on the river because the company would leave nearby farmland fallow or stop irrigating and instead use the water to cool data centers.
Rucci told Business Insider that the proposal would have “zero impact” because the data center would not require additional allocations from the Colorado River, adding that its water needs would be on par with a 160-acre farm.
Water experts and local advocates say the lawsuit raises bigger questions than how much water a single data center should use. As water becomes scarce and demand increases from new industries, should water historically used for agriculture be redirected to power the AI boom?
Moving water from agriculture to data centers
The Imperial Valley’s identity is tied to agriculture, with cattle, alfalfa, lettuce, and spinach being its main products. “Taking land away from agricultural production for other uses, even in small amounts, is a question of values,” John Fleck, a water policy expert and author at the University of New Mexico, told Business Insider.
The Colorado River is a source of fresh water for 40 million people. Thomas O’Neill/NurPhoto via Getty Images
Michael Cohen, a senior research fellow at the Pacific Institute who focuses on water use in the Colorado River Basin, said the problem is not necessarily the amount of water, but rather developers’ plans to access, dry, and reallocate agricultural land to industrial use.
“There’s a lot of resistance in farming communities everywhere to ‘buy it and dry it,’ because that’s the job,” he says.
Rucci said his company has contracts to buy land and water allotments from farmers. He also said he pursued this strategy after his proposal to use reclaimed water was rejected.
While individual landowners may benefit from this practice, taking farmland out of production can have cascading effects on farming communities, including fewer farm-related jobs.
The Imperial Valley’s economy has long relied on Colorado River agriculture. Rhett Larson, a water law expert at Arizona State University, said that without the areas around Imperial and Yuma, Arizona, “no American would be able to afford a salad in February.”
Larson said that while farmers may make money selling land and water rights, those who often suffer are fertilizer salespeople, tractor repairmen, teachers, dry cleaners or people in rural areas who don’t have land or water rights to sell.
Citing an independent economic study prepared for the county, Rucci said the data center will bring significant economic benefits to Imperial County, including 1,688 construction jobs, more than 100 permanent jobs and an estimated $2.95 billion in economic improvements over 30 years.
“Economic diversification is exactly what our region needs,” Rucci said in an emailed statement, noting Imperial County’s high unemployment rate. The county’s unemployment rate was about 17% in May, according to state data.
California’s Imperial Valley is a major agricultural center. Allen J. Scherben/Los Angeles Times via Getty Images
Who makes decisions about water?
Eric Reyes, an Imperial Valley resident and executive director of the advocacy group Los Amigos de la Comunidad, said he is concerned that the lawsuit is an attempt to circumvent the Imperial Irrigation District (IDD), a public utility managed by an elected board. Water rights in this area have long been held in trust by IIDs rather than individual landowners.
Reyes said the development plan “raised major red flags” because it could involve “private transactions with landowners and then use for the landowner’s own purposes.” He sees this as an attempt to circumvent IID and give more power over water to landowners, some of whom “want to farm water instead of farmland” or sell water for agricultural purposes. Because it can be more profitable.
Rucci rejected the idea that the company is trying to circumvent IID control, saying farmers have a right to allocate water under state law and the proposal does not require “another drop” from the Colorado River.
Larson said the incident shows why water fights in the West are rarely just about conservation.
“Everyone says, ‘We need to conserve water,’ but that’s often where people stop,” he says. “We need to ask a different question: ‘What are we saving it for?'”
Larson said moving water from farms to data centers may be a choice for some communities, but there will be tradeoffs.
“The Colorado River Basin needs to decide what we want to be when we grow up and what it will take to get there,” he said. “We have enough water to do many good things, but not enough water to do all good things.”