A proposed data center development in East Texas has drawn scrutiny regarding its potential impact on regional water supplies. The project, led by Diode Ventures, would require raw water from the Cedar Creek Reservoir, a critical source that provides between 80% and 85% of the raw water for the Tarrant Regional Water District. This district serves major North Texas communities, including Fort Worth and Arlington, which are located approximately 31 miles west of Dallas.
According to utility records, the Tarrant Regional Water District currently extracts up to 170 million gallons daily from Cedar Creek and 150 million gallons from the Richland Chambers Reservoir. These supplies are stored in North Texas reservoirs before being distributed to 70 cities in the region. In contrast, the rural West Cedar Creek utility district, which serves Henderson County, projected pumping just under 1.5 million gallons per day in 2025 for approximately 22,400 residents and commercial users.
Diode Ventures has submitted an application to the West Cedar Creek utility district for water access. Project development manager Khalid Jbara stated in December 2025 that the facility would require between 1 million and 5 million gallons of water per day. However, a district spokesperson noted that the upper end of that range does not guarantee actual usage. The utility district has indicated that Diode’s application remains incomplete, and no contracts have been issued.
Utility officials have raised concerns about the feasibility of meeting such demands. Email communications from May 2025 revealed that the West Cedar Creek utility district lacks the capacity to fulfill Diode’s water cooling needs without expanding or upgrading pump stations. Furthermore, general manager Kenneth Malin questioned the financial benefits to the district of constructing a pipeline solely for raw water transmission to a single industrial user.
The proposal comes amid local drought conditions that have led to moderate water shortages in the area. Water levels at Cedar Creek have dropped significantly compared to the previous year, prompting conservation requests for residents. Local residents have expressed frustration over the situation, with some noting that recreational boats are currently dry-docked due to low water levels. Community members have voiced concern that industrial facilities are being prioritized over local citizens and taxpayers.
