(Oil Price) – After years of steady energy consumption rates, the Great Lakes region is expected to see a 2 to 3 percent annual rise in energy demand over the next ten years as data centers pop up at a rapid clip to support the AI boom.
Not only will this growth rate place extra stress on local energy grids (and therefore on consumers’ bottom lines), it could also pose a real threat to water resources in an area where freshwater is rarely thought of as scarce.
“The energy story emerging today is one of tumultuous change in energy supply and demand coupled with conflicting state and federal objectives that are colliding with a buzzy economic narrative centered around AI and data centers,” states a recent report from Bridge Michigan. With skyrocketing demand from data centers and shifting policy priorities under the Trump administration, local policymakers are scrambling to keep up.
Due to these compounding economic and political forces, the development of coal plants, new and revitalized nuclear plants, gas-fired power plants, and battery storage is accelerating in the region. All of these industries require huge amounts of water for their daily operations, and there is question as to whether the region’s water tables can handle the pressure.
“As electricity demand is soaring, in part due to data centers, we’re seeing changes in water use, we’re seeing changes in electricity consumption,” Mike Shriberg, director of the University of Michigan Water Center, was quoted by Bridge Michigan. “And how our region responds to that over the long term will have a massive impact for the Great Lakes and for our energy future.”
While it’s hard to imagine the Great Lakes running out of water, it’s a real threat. Freshwater is a finite resource, and the Lakes support a huge amount of water demand for the United States. Already, without even considering the increased demand from data centers, there has been considerable concern and even conflict over water withdrawals in the Great Lakes states.
Disputes over shared resources and overextraction have popped up in Southwestern Michigan, Minnesota, the Central Sands region of Wisconsin, and Indiana, according to an August 2025 report by the Alliance for the Great Lakes, a non-profit based in Chicago. Conflict has been intensifying as various industries extract more and more water from the lakes, rivers, and water table.
Agriculture is a major consumer of water in the region, but the energy industry is the largest consumer, and growing larger all the time. Clean energy, while an environmental net positive, is a particularly major water consumer. “In Indiana, it’s suspected that construction activities associated with dewatering to make way for data centers and an EV battery plant have caused at least three residential wells to fail,” the Alliance reports.
Plus, data centers themselves are enormously thirsty, on top of the energy sources that support them. The biggest data centers can consume more than 365 million gallons annually, a mind-blowing sum that is roughly equivalent to the annual water use of 12,000 Americans. As data center development has gone gangbusters in the last few years, water usage has skyrocketed accordingly. Water usage by data centers in the United States tripled from 5.6 billion gallons in 2014 to 17.4 billion gallons by 2023.
The result will be enormous strain on regional water resources as well as on local economies, which are already struggling to keep pace with the rapid spread of data center development. Sectors like agriculture won’t just be competing with Big Tech for precious water resources, they will also be footing the bill for skyrocketing energy demand.
“As we see some of these big power users wanting to come into the state of Illinois, like data centers and those types of things, there’s some concern by our membership that there’s going to be an over-demand on power,” Kevin Semlow, director of governmental affairs and commodities with the Illinois Farm Bureau, told Brownfield Ag News last year. “As you see demand go up and supply stays the same, what changes? It’s the price.”
By Haley Zaremba for Oilprice.com
