Project Matador, Fermi America's enormous AI and power campus rising near Pantex in Carson County, now has the deals it needs to start pulling Amarillo's water. The City of Amarillo has agreed to supply the campus with municipal water, and Carson County has approved a long-term tax arrangement. For landowners across the Panhandle, the question is simple and serious: what happens to the region's water, and to the people who depend on it, when one private campus this large moves in?
This article walks through what was actually agreed to, separates the confirmed numbers from the louder claims, and explains where Texas landowners stand. It is general information, not legal advice.
What did Amarillo and Carson County actually agree to with Fermi?
Two separate deals power Project Matador. The City of Amarillo approved a long-term agreement to sell the campus municipal water, and Carson County approved a tax arrangement that lets Fermi pay set fees instead of ordinary property taxes for years.
The campus itself is planned at a scale that is hard to picture: thousands of acres next to the Pantex plant in Carson County, just outside Amarillo, with millions of square feet of data center buildings and on-site power generation. Fermi has publicly valued the project near $60 billion.
Those are the two levers that matter to a landowner: a water deal that commits a large, long-term draw, and a tax deal that changes who pays for the public costs that come with industrial growth.
How much water will Project Matador use?
The City of Amarillo agreed to supply the campus up to about 2.5 million gallons a day — roughly 900 million gallons a year — under a long-term contract, with Fermi paying about twice the rate an ordinary commercial customer pays inside city limits.
That 900-million-gallon figure is the starting point, not the ceiling. Fermi has signaled it expects to come back seeking up to 5.5 million gallons a day, which would roughly double the annual draw. The water flows from Amarillo's municipal system, which draws heavily on the Ogallala Aquifer — a source that has been declining for decades and recharges very slowly.
Fermi has pushed back on the idea that this is wasteful. In June 2026 testimony before the Texas House Natural Resources Committee, a Fermi officer said the campus is engineered to use roughly 80% less water than conventional cooling, relying on air-cooled and closed-loop systems. (Separately, the Panhandle Groundwater Conservation District applies a one-acre-foot-per-acre-per-year pumping guideline to irrigators across the region.) Those efficiency claims deserve a fair hearing.
But efficiency per server is not the same as total impact. Even an efficient campus this large represents a major, decades-long allocation of a finite supply in a drought-prone region. You can read more about the broader pattern on our water harm hub.
Is Fermi really getting a "free ride" on taxes?
Largely, yes — with one wrinkle worth understanding. The Carson County agreement abates Fermi's property taxes 100%. In place of that ordinary tax bill, Fermi makes negotiated payments in lieu of taxes: reported at roughly $3 per square foot of improvements plus about $2,500 to $2,750 per megawatt of capacity each year. So it is not a literal zero — but the normal property-tax bill on a campus this size is wiped out and replaced with a set, pre-negotiated schedule.
That is real money. But a payment-in-lieu structure is very different from paying full freight on a $60 billion property, and it shifts the math for everyone else. Industrial growth brings traffic, road wear, emergency-service demand, and water-system strain. When the largest taxpayer in the county pays on a negotiated schedule rather than full appraised value, the public costs do not disappear — they land somewhere.
For landowners, the fair question is not "should this be built" but "are the people who bear the water and infrastructure costs being made whole?" That is the heart of the issue: fair compensation, not opposition to the technology.
How many jobs does the deal actually require?
The binding commitment is 600 permanent jobs, phased in across 15 stages — 40 jobs per phase — against a buildout valued near $60 billion. That works out to roughly one permanent job for every $100 million invested.
You may see larger job numbers in promotional material and headlines. What a county can actually enforce, though, is what's written into the agreement, and the agreement commits Fermi to 600 operating jobs once fully built. Construction will employ far more people temporarily, but temporary construction crews are not the same as the permanent local jobs that justify a generational water and tax commitment.
None of this makes the project illegitimate. It simply means landowners should weigh the deal on the terms that are actually binding, not the terms in a press release.
What does this mean for Panhandle landowners and the Ogallala?
In Texas, the water under your land is generally treated as your property, and that has real legal weight. Two ideas shape the landscape:
- The Rule of Capture. A landowner can generally pump groundwater from beneath their own land, even if it affects a neighbor. That makes it harder to point to a single cause when a well declines — which is exactly why documentation matters. We explain this in plain English in our guide to the Rule of Capture.
- Groundwater as a property right. Texas courts have recognized that landowners own the groundwater in place as a vested, constitutionally protected interest. When government action or regulation destroys that value, questions of fair compensation can arise.
For Panhandle landowners, the most direct local body is the Panhandle Groundwater Conservation District, which permits and monitors high-volume pumping. Permit hearings and district records are a window into who is pumping, how much, and where — and a place where landowners can be heard.
If your well is already struggling, our guide on what to do if your well runs dry walks through the first practical steps.
How can Panhandle landowners protect themselves now?
You don't have to wait for a problem to start building a record. Simple steps today make a far stronger case later:
- Note your well's normal water level, flow rate, and quality, and keep dated photos.
- Save any well drilling, deepening, or repair paperwork and receipts.
- Watch for public notices from the City of Amarillo, Carson County, and the Panhandle GCD — and speak at hearings.
- Track the project's water requests over time; the first 900-million-gallon agreement is unlikely to be the last.
A clear before-and-after picture is far more persuasive than memory alone. For background and local updates, visit our Amarillo location hub.
What this means legally for a Texas landowner
If a large new water user lowers the water table beneath your property, the harm may show up as a dry or failing well, higher pumping costs, or lost land value. Texas law gives landowners real property interests in groundwater, and pathways exist to document harm and seek remedy — but those pathways depend on evidence gathered early. This is general information, not legal advice for your specific situation.
Frequently Asked Questions
How much water will Project Matador use per year?
The City of Amarillo agreed to supply up to about 2.5 million gallons a day — roughly 900 million gallons a year — under a long-term contract. Fermi has signaled it may later seek up to 5.5 million gallons a day, which would roughly double that annual amount.
Does Project Matador pay anything in taxes to Carson County?
Its property taxes are 100% abated under the Carson County agreement. In place of them, Fermi makes negotiated payments in lieu of taxes — reported at about $3 per square foot of improvements plus roughly $2,500 to $2,750 per megawatt of capacity per year. So it is not a literal zero, but the normal property-tax bill is fully abated and replaced with a set schedule.
How many permanent jobs is Fermi committed to?
The Carson County agreement binds Fermi to 600 permanent jobs, added 40 at a time across 15 phases, against a buildout valued near $60 billion. Larger figures sometimes appear in promotional material, but 600 is the enforceable commitment.
Where does the campus get its water?
From the City of Amarillo's municipal supply, which draws heavily on the declining Ogallala Aquifer. The campus sits in Carson County, next to the Pantex plant just outside Amarillo.
Can a data center's water use affect my private well?
Yes. High-volume pumping and large municipal draws in the same region can lower local water tables, making wells less productive, raising pumping costs, or causing shallower wells to fail. Documenting your well's condition now is the best protection.
Is opposing fair terms the same as being anti-data-center?
No. The issue is fair compensation and sustainable terms — protecting landowners' water, wells, and land value — not opposition to AI or the technology itself.
You don't have to sort this out alone
If you own land, a well, or a ranch in the Texas Panhandle and you're worried about what Project Matador's water use could mean for you, we want to hear from you. Tell us what you're seeing near your property, and we'll listen. A review is free and confidential, with no obligation. The more landowners who share what's happening on the ground, the clearer the picture becomes for everyone in the region.
For the project's own public details, see the City of Amarillo's Fermi Project page, the Panhandle Groundwater Conservation District, and the Texas House Committee on Natural Resources, where the project's water plans were presented in June 2026.