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When Amarillo Mayor Cole Stanley sat down with local media on Tuesday, the message was clear: the conversation about Fermi America’s massive AI data center isn’t just about technology, or jobs, or even growth — it’s about water. It’s about what kind of city Amarillo wants to be, and how far we’re willing to go to chase opportunity while protecting what makes life here possible.
This issue — balancing growth and sustainability — has become a defining debate not only for Amarillo, but for communities across Texas as data centers, AI facilities, and energy projects spread across the plains. The proposed partnership between the City of Amarillo and Fermi America has sparked intense interest and concern, with more than 30 residents speaking during Tuesday’s City Council meeting to share both their hopes and their fears.
At the center of it all lies one simple question: does this deal make sense for Amarillo’s future?
The Project That Landed in Amarillo’s Lap
Mayor Stanley described how Fermi America’s proposal first came to his attention. “It’s interesting to see that this project actually came through Pantex into my office,” he said. “I was at Pantex, I think it was their first production unit. It was a ceremony. The Secretary of Energy, Chris Wright, was there. And that’s where Rick Perry shook my hand and said, ‘Hey, we’ve got something we would like to bring to your city.’”
That “something” turned out to be an enormous undertaking — what Fermi America and the Texas Tech University System are calling “the largest advanced energy, private grid and intelligence development in the world.” The company plans to generate and utilize up to 11 gigawatts of energy using a mix of natural gas, solar, wind, and nuclear power. The project’s footprint will be staggering: a 5,800-acre AI data campus located east of Amarillo, near the Pantex plant.
It’s an ambitious plan, and one that immediately raised eyebrows — not just for its scale, but for its appetite for resources, especially water.
Water: The Real Currency of the High Plains
Every Amarillo resident knows that water is not just a commodity here; it’s the foundation of survival. The Panhandle depends heavily on the Ogallala Aquifer System — a vast underground reservoir that’s been slowly draining for decades. And while Amarillo also draws from Lake Meredith through the Canadian River Municipal Water Authority (CRMWA), that lake has struggled with drought and fluctuating levels for years.
According to Amarillo’s 2024 Water Quality Report, the city’s tap water is a blend of 55% “surface” water from CRMWA and 45% groundwater from the Ogallala. Amarillo has the capacity to treat and supply up to 118 million gallons of water per day — a significant figure, but one that still demands careful management.
So when news broke that Fermi America could use between 2.5 and 10 million gallons per day (MGD) for its operations, residents understandably started doing the math.
Mayor Stanley confirmed that Fermi America has been negotiating a potential water rate with the city at “a 2x rate” — or $8.72 per 1,000 gallons — for an initial 2.5 MGD, which would amount to roughly $8 million per year in payments to Amarillo. At the same time, Fermi would invest $200 million in building water infrastructure — wells, pipelines, and connections — which would then be turned over to the city.
“$200 million is what the engineers have estimated would be their capital contribution to our system,” Stanley said. “They are going to pay the $200 million, then they’re going to give it to the city and the city would adopt that infrastructure. Then we are going to turn around and sell them that water.”
From a business standpoint, that might sound like a good deal: Amarillo gains valuable infrastructure and a new source of revenue without footing the initial construction bill. But as Stanley himself noted, nothing has been finalized.
“We have not agreed to anything, including the 2.5 MGD,” he said. “However, there was a letter of intent that we asked the staff. They signed a letter of intent several months ago that was 2.5 up to 5, 5.5 potential.”
The Scale and the Stakes
To put things in perspective, Stanley compared Fermi America’s potential water use to existing local industries. “Producers Owned Beef uses 3 MGD,” he said, “and an unnamed paper company uses 1.8 MGD.” Even at the lower end of the proposal, Fermi America’s use would be comparable to some of Amarillo’s largest existing industrial consumers. At its maximum request of 10 MGD, it would surpass them all.
But the mayor also provided context on the broader scale of water use across the region. “Carson County uses 36 billion gallons per year, Armstrong County uses 3.5 billion gallons per year, Potter’s uses 14.2 billion gallons per year,” Stanley said. “If you look at the total usage for these counties — 26 counties — including everything from farm, ranch, agriculture, industry, municipal, as well as recreational, like golf courses, [would be] 1.1 trillion gallons.”
“If you ramp up Fermi all the way to 10 MGD,” he continued, “that’s 3.6 billion per year. What would they use out of the total 1.1 trillion? 0.32%.”
That number — 0.32% — has become one of the most discussed figures in this debate. On paper, it suggests Fermi America’s total water use would be a small fraction of the regional total. But many residents aren’t reassured, because the context matters. Agriculture may consume the majority of Panhandle water, but most of that water supports food production — not server racks for artificial intelligence systems.
Moreover, critics note that Fermi’s project could be just one of many. “The citizens have concerns that there are 350 to 400 data centers proposed across the state of Texas,” Stanley acknowledged. “The citizens honestly have legitimate concerns that the Texas Water Board and the water development of how they manage water across the state in feet per acre.”
That’s where the unease begins to take root: it’s not just about one project, but the cumulative strain that multiple industrial developments could place on an already-depleting aquifer.
A Deal That Cuts Both Ways
Stanley has tried to make one thing clear — Amarillo’s role, as he puts it, “is just water.” The city’s involvement isn’t about managing the power grid or the AI infrastructure, but about selling and delivering water at fair terms.
Still, Stanley emphasized that the city is not powerless in shaping how this deal could benefit residents. “If we don’t want to benefit from the sale of the water, we won’t help our citizens, but we will have the same water taken out of the same bucket of that aquifer,” he said.
That argument highlights a key tension: if the water will be used by someone, somewhere — whether in Amarillo or elsewhere in the state — why not ensure Amarillo gains from it? Stanley has warned that if Amarillo hesitates to engage in deals like this, other regions (and the state government) could step in.
“You’ve got to keep in mind we sit in a very water-rich part of Texas,” he said. “Further south, they do not have these resources, and they want them. And so if they can show that we are being selfish and we’re hoarding water for 300 years from now, I think you’ll see legislation that would push to pull some of that water out of the Panhandle.”
That’s a sobering thought — that Amarillo’s choice might not be between using the water or saving it, but between using it locally or having it regulated away.
Water Rules and Reassurances
At the regional level, the Panhandle Groundwater Conservation District (PGCD) plays a crucial role in regulating water use. Britney Britten with the PGCD told MyHighPlains that all water users — from farmers to data centers — must follow the same production and acreage rules.
“Data centers will follow the same rules as our municipalities, agricultural users, other industries, etc. PGCD has a production/acreage rule currently, where water users may pump up to 1 acre-foot per contiguous acre owned or leased annually. We enforce this policy through water meters,” Britten explained.
She added that so far, only one data center has applied for permits, and “their proposed usage is within what they are allowed to produce.” On pollution concerns, she noted: “According to our water quality data, there are no other major threats of pollution within the District’s boundary.”
Those statements provide some comfort — but they don’t completely erase public anxiety. After all, groundwater management plans are designed for long-term balance, not short-term surges in industrial demand. And water in the Ogallala isn’t replenished quickly; it can take centuries for aquifer levels to recover once depleted.
Voices from the Community
At Tuesday’s City Council meeting, those anxieties and hopes spilled into public view. More than 30 Amarillo residents took the microphone during public comment — a turnout that underscored just how deeply this issue cuts into the community’s identity.
Some residents spoke passionately in support of the project.
“This project will keep our children and grandchildren in Amarillo,” said resident Tom Totorio. “They will become taxpayers, they will become voters, and they will not leave our community. They will grow Amarillo into one of the greatest cities in our state and in our country. This project is not just important for our community, our state, or our great country, but it also gives a rare opportunity to impact globally. Sell them the water at a premium rate and pass that profitability on to the consumer, onto the citizens of our great community.”
Another resident, Elliot McKinney, focused on the economic potential: “Water is certainly a valuable asset and resource that we have, but it’s not all about the water in this case. Amarillo and this community has played a critical role in the defense of this country. In terms of, I think it’s potentially just as impactful… and the economic benefit.”
Others, like Robin Hart, spoke from a place of personal disruption. “We live right across the street from this construction,” she said. “We were notified nothing before we saw trucks coming in the road building trenches, whatever. We had no clue what was going on… This land was supposed to go to our grandson, now the property value has plummeted.”
Hart and her neighbors have asked Fermi America to meet with them collectively to address concerns — a request that, so far, they say has been met with mixed responses.
And then there were those who came to challenge the very premise of the deal, like Anthony Hernandez, who urged the council to listen to residents’ fears about health and environmental impacts. “When was the last time you saw this many people agree on one thing like this?” he asked. “Besides all the obvious issues, the water, the pollution… I come from a family ridden with cancer… I am worried about cancer. I don’t drink things with high levels of sugar because I’m scared, and we are just going to start throwing things in the air? Risking our future?”
His words struck a chord with many in attendance — not because they were anti-development, but because they reflected a deep-seated mistrust that often surfaces when big projects come to small communities.
Growth or Guardrails?
Mayor Stanley acknowledged those concerns, saying it’s not just about whether Amarillo can sell water to Fermi America, but whether it should — and under what terms.
“Well, let’s start by trying to do a good business deal first,” he said. “Let’s communicate accurately of what are your actual needs and what is your ask. And then let’s make it really difficult for the next mayor and council to get outside of those perimeters.”
He also made a broader point about the city’s economic direction. “If you don’t like this deal as citizens and as our bosses, what you’re telling us to do is close up Amarillo. No more industry. We don’t want any more industry. We don’t want a paper company. We don’t want anybody.”
To many residents, that may sound like a false choice. Wanting to protect the aquifer doesn’t necessarily mean rejecting growth — it means asking for growth that’s sustainable, transparent, and equitable. But to Stanley’s credit, he’s been candid about the difficult balance. “We have to understand,” he said, “if you’re saying, look, we’re concerned because we only have enough water for the people that currently reside here, that would be a 180-degree turn from everything that we’ve done.”
It’s a fair point. Amarillo has long positioned itself as a city open for business — attracting industry, expanding its infrastructure, and leveraging its location on major transportation and fiber routes. Fermi America, in that sense, fits perfectly into the story Amarillo’s leaders have been trying to tell.
The Drought Question
Of course, the question that haunts every discussion about water use in the Panhandle is drought — and what happens when it hits.
Stanley reassured residents that the city’s drought contingency plan already applies equally to all users, including industrial customers. “What people don’t understand is that on the industrial side, they’re all pro-rata just like you and I are,” he said. In other words, if water restrictions are triggered, Fermi America would be required to cut back its usage along with everyone else.
He also noted that the additional infrastructure Fermi America would build could help the city by adding redundancy — protecting the system against main breaks or other failures. That’s a hidden advantage that might not be obvious to residents but could prove valuable during emergencies.
Technology, Energy, and the Future
Beyond water, there’s also the question of what this project represents for Amarillo’s future. Fermi America isn’t just building a data center — it’s building an energy ecosystem. Mayor Stanley pointed out that the project’s combination of renewable and nuclear energy could actually reduce water usage compared to older power generation methods.
“You like turning on the lights, right? You like having power? It takes water to create power and it takes power to pump the water. They’re very symbiotic,” he said. “If you could bring an entity… that converts that water into currency for the citizens here and puts us as a stakeholder, not as just a paper plate mentality where you used us and then once we weren’t good, you left, but more like fine China, where we developed a good long-term relationship… the cost benefit is worth the risk.”
That’s the vision — a partnership that transforms Amarillo from a supplier into a stakeholder, one that turns local resources into local prosperity. But like any marriage, as Stanley phrased it, it requires trust, transparency, and pacing. “You’ve got to be willing to date before you get married,” he said.
A Common-Sense Path Forward
At its core, this debate isn’t just about Fermi America — it’s about Amarillo’s relationship with growth itself. It’s about deciding what kind of community we want to be when opportunity knocks.
Somewhere between blind optimism and total skepticism lies a common-sense approach: protect the water, demand transparency, negotiate hard, and don’t move faster than trust allows.
Residents deserve clear answers about what’s being proposed, where the water will come from, how it will be monitored, and what guarantees are in place to protect Amarillo during drought or crisis. They also deserve to see the full economic picture — not just promises of jobs or revenue, but commitments to community engagement, environmental responsibility, and infrastructure resilience.
The truth is, Amarillo is no stranger to big challenges. From droughts to economic shifts, this region has always had to balance ambition with reality. But one thing has never changed: the people here understand the value of common sense. They know that progress isn’t free, but they also know that short-sighted deals can cost far more in the long run.
The Fermi America project may indeed become a cornerstone of Amarillo’s future — a global hub for advanced energy and AI. Or it may serve as a cautionary tale about what happens when growth outpaces stewardship. Which way it goes will depend not only on the mayor and the city council, but on the continued vigilance, questions, and participation of Amarillo’s citizens.
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