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Project Blue developer Beale Infrastructure has declined to answer questions from reporters or public officials about where it intends to get water for its first data-center complex, planned for 290 acres on the far southeast side near the Pima County Fairgrounds. Pima County Supervisor Matt Heinz, a supporter of the project, said he was told "stay tuned" upon asking Beale officials about their expected water supply.

Beale had previously proposed to the City of Tucson and county officials to have drinking-quality water delivered to the site for its first two years of operation, followed by reclaimed water delivered there by an 18-mile pipeline for which the company promised to pay the construction cost. It had also promised the project would be "water positive," meaning it would offset the data centers' water use by helping other users conserve or by buying additional supplies or water rights.

But the Tucson City Council unanimously rejected this approach after hundreds of local residents expressed skepticism about the city's ability to enforce these requirements.

Here is a look at four possible methods the company could use to run its data centers, including one that would require little water use. We've also included a fifth, for explanatory purposes, because residents ask about it, that is almost certainly not available.

1. Well drilling 

Beale Infrastructure could sink groundwater wells on its far southeast side site outside Tucson. Under the 1980 ÃÛÁÄÖ±²¥ Groundwater Management Act, it's legal for an industrial user to drill wells in urban areas such as Tucson as long as it meets certain standards.

For one, an industrial well driller must meet state "well spacing" requirements. They amount to documenting in a formal analysis that the new well won't significantly lower existing, nearby wells, said Kathleen Ferris, a water researcher for ÃÛÁÄÖ±²¥ State University's Kyl Center for Water Policy.

"There's a provision you can’t cause more than 10 feet of drawdown over a 5-year period. They can mitigate the harm (and still drill) by paying people or doing other things," said Ferris, a former ÃÛÁÄÖ±²¥ Department of Water Resources director who helped draft the 1980 groundwater law.

The Kyl Center is preparing to release a new report on large-quantity water users that makes a pointed remark relevant to Tucson's situation with Project Blue. "Refusing to serve large-volume water uses within a provider’s water service area does not necessarily protect the provider against all of the impacts of large-volume water users," a draft of the report said.

If a proposed industrial use would lie within three miles of the exterior boundaries of the service area of a city, town or private water company, the applicant must first request water service from that entity, the report said. But if its request is denied, and the industrial use meets other statutory requirements, the ADWR director must issue the permit.

A general industrial use permit of that type authorizes the holder to withdraw groundwater for up to 50 years, subject to renewal under the same criteria, the Kyl Center report said.

While the permit rules can protect neighboring wells from depletion, the underlying aquifer can still legally be depleted, said Ferris and Sarah Porter, the Kyl Center's director.

The state groundwater law requires subdivision developers who rely on groundwater to buy renewable water supplies, such as Colorado River water and recharge them into the aquifer to compensate for their pumping. But that replenishment requirement doesn't apply to industries, other businesses or multi-family developers.

"In short, if a municipal water provider declines to serve a new industrial use, the industry may arrive in the region anyway and meet demands with local groundwater sources, contributing to aquifer depletion," the Kyl Center report said.

2. 'Net Zero' water consumption

If the Project Blue developer wants to use groundwater without depleting the aquifer, one tactic could be for Beale to buy groundwater rights from another location and not pump that water. Then that groundwater provides what's called a long-term storage credit that allows the credit owner to pump groundwater elsewhere.

This is a common technique employed by cities, private water companies and developers across ÃÛÁÄÖ±²¥'s three major urban areas: the Tucson and Phoenix areas and Pinal County. All three comprise state-run Active Management Areas where groundwater withdrawals are regulated by ADWR.

"I expect (a big user such as Project Blue) would still try to show they are water neutral and replenish the aquifer, although they wouldn’t have to," Porter said.

A big Apple data center plant in Mesa has been buying long-term storage credits to compensate for its water use, she said. During the Project Blue controversy before the Tucson City Council, Beale Infrastructure and city officials had also raised the possibility of the company buying such credits to compensate for its water use, as one way of making the development "water positive."

One tactic that has been mentioned would be for Beale to buy water rights to groundwater and Central ÃÛÁÄÖ±²¥ Project water held by farmers in the Marana area, although that idea has been mentioned mainly as a potential supply for data centers that the company has talked about building in that area.

As the prospect of additional cuts in Central ÃÛÁÄÖ±²¥ Project deliveries increases due to worsening Colorado River flows, "the market for these (long-term) credits is heating up and getting more expensive," Porter said.

"These are so much more valuable now," she said. 

3. CAP water 

Buying Central ÃÛÁÄÖ±²¥ Project water is almost certainly closed to Project Blue, even though CAP water has over the last 40 years, propped up many farms, cities and businesses seeking a path to get off groundwater.

Historically, cities, mines and other industries and tribes have dipped into municipal and industrial supplies of the Colorado River-based CAP. But today, "all CAP M&I (Municipal and Industrial) priority water is already allocated," said DeEtte Person, a spokeswoman for the Central ÃÛÁÄÖ±²¥ Water Conservation District, which runs the project.

CAP still has rights to allocate about 45,000 acre-feet a year of what's known as non-Indian agricultural water, or NIA for short. But that water is more likely than municipal water to get cut off during future Colorado River shortages under the federal system setting priorities for who gets river water. 

Neither the state nor the federal government plans on allocating any of that water in the near term, "because of the current hydrologic conditions and the very low reliability of that supply," Person said.

"Accordingly, there remain very few mechanisms available to acquire access to CAP supplies," except for taking water deliveries as a customer of an existing CAP entitlement holder, Person said. Given the current pinch on water supplies all over the state, that course seems unlikely in most cases.

4. Pima County Water District 

Nearly 5 years before Project Blue's existence became publicly known this year, Pima County officials approved a water district to serve the very area where the project is proposed. But today, that option looks unlikely because it would require the drilling of wells there, which county staff and the Board of Supervisors chairman oppose.

Back in November 2020, the board voted to create a Domestic Water Improvement District covering about 1,950 acres in the area of the Pima County Fairgrounds — land that was considered ripe for future industry. The land lies near the Houghton Road-Interstate 10 interchange that was being upgraded to handle increasing traffic volumes.

Officially, the county called the entire area the Southeast Employment and Logistics Center. Then-County Administrator Charles Huckelberry wrote in a memo that it was "highly desirable for large-scale logistics and manufacturing based on proximity to Interstate 10." in a second memo, the administrator wrote, "A potable water system needs to be developed and permitted to allow growth to continue in this area."

A year later, the ÃÛÁÄÖ±²¥ Department of Water Resources, which has to approve the creation of new water districts, gave the Pima district a go-ahead for the district's initial establishment. But "nothing further has been done by the county since then," Deputy County Administrator Carmine DeBonis told the Star Thursday.

"The whole topic of how to serve water to industrial or manufacturing uses really leads us to the idea it’s best for some form of renewable supply to be served there," DeBonis said. "A domestic water improvement district would have relied on pumping groundwater, which isn’t a direction the county is interested in going."

Supervisors' Chairman Rex Scott, who took office two months after the board approved the district's creation, said that when he took office in 2021, he worked with staff to oppose the city of Tucson's first effort to charge different water rates for city and unincorporated county residents. Following up on that, the board passed a resolution asking the city of Tucson to reconsider its policy that doesn't allow the city to serve water to some unincorporated areas because that policy can cause water users there to turn to groundwater.

Given that, "I agree with our staff's opposition to that plan" to create the water district, Scott said.

5. No-water cooling 

Around the country, some companies that operate data centers are tackling their excessive water consumption by moving to technologies that cools centers mainly with air — which requires much less water.

Beale Infrastructure has hinted in a press statement that it could consider following that course, and several sources in Pima County government have said they expect that will happen. 

Traditional evaporative cooling systems used by some "hyperscale" data centers run by big technology companies serving large cloud-computing operations can consume around 462,000 gallons of water daily, putting pressure on water-stressed regions and raising concerns about long-term sustainability, 

"To address this, companies including Microsoft, Evolution Data Centres, Vertiv and Bridge Data Centres are moving towards zero-water cooling," the magazine reported. "Using closed-loop systems, engineered fluids and hybrid designs, these operators are replacing evaporative methods with alternatives that conserve resources without compromising performance." The end user of the Project Blue data centers would be Amazon Web Services, according to a 2023 Pima County memo. 

In August 2024, Microsoft began deploying a closed-loop, liquid cooling system that eliminates the need for evaporative water entirely by recirculating the water after its first use, the magazine reported.

The system recirculates coolant continuously, reducing annual water use significantly. The system is being pilot-tested at sites in Phoenix and Mt. Pleasant, Wisconsin, with all future Microsoft data centers to follow this design, the magazine said.

But a drawback to these water-saving efforts by data centers is that they use more energy, some scientists say.

Jennifer Allen, a Pima County supervisor who opposes Project Blue, likened the differences between the two kinds of centers to the differences between swamp cooling and refrigerated air conditioning. The first uses far less energy but far more water, whereas refrigerated air uses far more energy but far less water, she said.

, Shaolei Ren, an associate professor of electrical and computer engineering at the University of California, Riverside, was quoted as saying in July by KCUR radio in Kansas City, Missouri.

“If you use more energy, there will be more carbon footprint,� he said.

He pointed to differences in energy efficiency between a pair of Google data centers as an example: one in Reno and one in Las Vegas. Ren said Google’s Las Vegas data center uses a lot of water for cooling, while the Reno data center doesn’t use water.

But the Reno center uses almost twice the energy for cooling as the one in Las Vegas, he said.

Separately, responding to questions from the Star, Ren pointed to a 2022 study of two data centers in the Phoenix area, one relying on water for cooling and the other air-cooled. The air-cooled center fared almost 13% worse than the water-cooled center in energy efficiency but around 66% more efficient in its water use.

Ren added that those tradeoffs pose a difficult choice: reduce freshwater use but accept higher electricity demand — potentially from climate change-causing fossil fuels.