Lessons from oil and gas: a Texas comparison
Texas knows about industrial development. Oil and gas built this state — the income, the jobs, the schools, the universities, the highways. Texans are generally not anti-industrial. But Texans also know what it looks like when an industry moves faster than the rules can keep up. The oil and gas experience offers useful lessons for how to think about the data center wave — both what worked and what didn’t.
This brief is not a criticism of oil and gas. It is a comparison of two industrial waves that have arrived in Texas under different rules.
The water comparison
The most direct comparison is water use. Both industries are large, growing water consumers in a state that is becoming drier.
| Industry | Current annual Texas water use | Projected by 2030–2040 |
|---|---|---|
| Oil & gas (mining, mostly fracking) | ~16.9 billion gallons (2020 reported) | Continued growth; varies with oil prices |
| Data centers (cooling + power generation) | ~25 billion gallons (2025 estimate, HARC) | Up to ~161 billion gallons by 2030 (HARC); potentially 3–9% of all Texas water by 2040 (UT Austin) |
Two things stand out from this comparison. First, the data center wave is on a trajectory to be larger in water use than oil and gas within a decade. Second, both industries have followed a similar pattern: rapid growth ahead of regulation, voluntary commitments to reduce freshwater use, and a delayed state planning response. Texas’s 2027 State Water Plan does not specifically account for data center growth.
Where oil and gas regulation got there eventually
Texas oil and gas operates today under a substantial regulatory framework — Railroad Commission permits, TCEQ air permits, produced water disposal rules, well integrity standards, earthquake monitoring after the Permian seismic events, and so on. Most of that framework was built reactively, after the activity was already widespread. Communities that lived through that pattern remember the costs of waiting — pollution events, contaminated groundwater, infrastructure damage, and lawsuits that took years to resolve.
The lesson is not that oil and gas were wrong. The lesson is that an industry on this scale needs rules of the road, and the rules work better when they are written before the buildout, not after.
Where data centers differ
Data centers do not pose the same risks as oil and gas. They do not produce “produced water” — the salty, contaminated wastewater that the Permian generates at the rate of 22 million barrels per day. They do not cause earthquakes from injection wells. They do not release benzene or other carcinogens during operation. The continuous noise and 24-hour lighting profile is, in fact, different and in some ways more intrusive than oil and gas — but the chemical and air-quality risks are lower.
Honest comparison — Data centers do not have the chemical or air-pollution profile of oil and gas — that’s not the lesson. The lesson is about pace, scale, water, and the cost of building regulation after the fact instead of before. Hill County is in a position that current oil and gas counties wish they had been in twenty years ago: the chance to set the terms before the industry is built out.
What this comparison suggests
If you have lived through an industrial boom in Texas, you know what “too fast, too unregulated” looks like. The data center wave does not have to repeat that pattern. The Community Benefit Agreement framework being developed is precisely the kind of up-front, written, enforceable structure that the oil and gas era largely lacked at its start.
Supporting careful regulation of data centers is not anti-industry. It is what Texans learned to wish for from prior industrial waves.
Next in this series
County Community Education Series · Prepared by Scope Technology and Manufacturing as advisor to Texas residents of unincorporated counties · May 2026