Anderson County Judge Carey McKinney found out about it at church. A deacon asked him the Sunday before Memorial Day if he’d seen a groundwater permit application published in the local paper. McKinney went home and pulled the week-old newspaper off his kitchen counter. That’s how the highest elected official in the county learned that a Dallas hedge fund manager wanted to pump 10 billion gallons of groundwater a year out from under his community, roughly three times what the entire county uses annually, and pipe it somewhere else.
Who’s behind it and what he wants
Kyle Bass runs Hayman Capital, a Dallas-based hedge fund. Through a separate company called Conservation Equity Management, he bought more than 11,000 acres across Anderson, Houston, and Henderson counties in East Texas, then filed permits to drill more than 40 high-capacity wells into the Carrizo-Wilcox Aquifer. Depending on which stage of the project you’re looking at, the numbers run from 10 billion to nearly 16 billion gallons a year. The larger figure is more than triple what the city of Longview, one of the bigger cities in the region, uses annually. One individual well application lists a pumping capacity of 1,300 gallons per minute, which works out to more than 683 million gallons a year from a single well.
Bass’s stated plan is to pipe the water to parts of Texas he says are running dry faster, cities west of Dallas-Fort Worth or south of Waco. His public argument isn’t subtle: “When you run out of water, you just run out of water, you just run out, and that’s likely to happen moving forward. You will see municipalities somewhere west of DFW or south of Waco just run out. It’s going to happen.”
The “just testing” defense
Bass and his attorneys describe the wells as exploratory, meant to measure how much water the aquifer actually holds before any large-scale pumping begins. His company has said in writing that if the test data shows less water is available than their models project, they’ll scale back or end the project. That’s the legal position the permits are built around.
Critics aren’t convinced the wells match that description. State Representative Cody Harris, whose district covers part of the affected area, pointed out that a typical test well runs about 2 inches in diameter. The wells in Bass’s applications use 16-inch casings, sized for full production, not sampling. A third-generation local well driller named Calicutt, who’s watched aquifer behavior in the region for years, put it directly: “I can make a computer model say whatever you want a computer model to say. But the real world data I see every day, that Mr. Bass and his hydrogeologists do not see every day because they do not work on these water wells every day, is completely different.”
Who’s lined up against it
The opposition here isn’t a fringe group. Wayne-Sanderson Farms, one of the largest chicken producers in the country with three complexes operating in East Texas, filed suit against the local groundwater conservation district, arguing Bass manipulated the district’s approval process through conflicts of interest tied to people sitting on its board. A coalition of local growers joined the case, arguing the project would nearly double the region’s average groundwater usage and threaten the farms, families, and businesses that depend on the aquifer for drinking water.
State Representative Trent Ashby told a marathon 11-hour House committee hearing on the project, “This project sets a dangerous precedent.” Harris went further, filing four separate bills aimed at stopping large-scale groundwater exports like this one, not just from Bass specifically. “It’s really more than that,” Harris said. “It’s not just about Kyle Bass at this point.”
At a public hearing in Jacksonville, Texas, the temperature got high enough that a local resident asked every opponent in the room to stand silently so the scale of the opposition would be visible. Bass, at that same hearing, pushed back directly against the framing that he’s trying to drain the region dry: “Whatever you’ve been reading about us trying to take all the water and gonna leave the whole area out of water, I would never do that. We are doing things that are responsible by law and by science.”
Where it stands now
The fight has moved into federal court. The Neches and Trinity Valleys Groundwater Conservation District imposed a moratorium in 2025 blocking new large-scale extraction permits in the area while the state studies how much water the aquifer can sustainably give up and how quickly it refills. In July 2026, two companies tied to Bass, Redtown Ranch Holdings and Pine Bliss, sued the district over that moratorium, arguing it illegally blocks them from exploring and developing groundwater beneath land they own, and that the district’s action violates their constitutional rights as property owners.
That’s the legal question this case is actually going to answer: whether owning land above an aquifer gives you the right to pump out water at a scale that can affect every other well in the region, regardless of what your neighbors or local government think about it.
Does this water end up feeding San Antonio’s data centers?
It’s worth separating what Bass has actually said from what looks like an obvious next step. Asked who would buy the water, Bass hasn’t named a buyer. He’s said it could go “anywhere south of Waco and north of Dallas-Fort Worth,” and at other points said he doesn’t have purchasers lined up yet. So there’s no on-record statement tying this specific project to San Antonio.
What is confirmed is the pattern this project would be joining. San Antonio already imports roughly 48,000 to 50,000 acre-feet of water a year, close to 16 billion gallons, through the 142-mile Vista Ridge pipeline, which pulls from the same general Carrizo-Wilcox aquifer system in Burleson County, west of where Bass is now drilling. That pipeline has been running since 2020, and landowners near it have reported their own wells dropping as a result. It has nothing to do with Bass. It shows the exact playbook already exists and is already working: identify rural East Texas groundwater, pipe it to a growing city, absorb the legal fights from the people who lived on top of it first.
And San Antonio’s demand for water is climbing for a reason directly tied to this blog’s earlier post on data centers. The city now has more than 20 data centers operating, with more in the pipeline, and its own utility officials have told city council the growth is straining both water and power supply. San Antonio Water System has pushed data centers toward recycled water use, up from 48 percent in 2023 to 75 percent in 2025, specifically because the strain is real enough to require it.
So the honest version of the connection is this: Bass hasn’t said his water is headed to San Antonio, and nobody should report that as settled fact. But San Antonio is precisely the kind of fast-growing, increasingly water-stressed, data-center-heavy buyer that a project like this would be built to serve, and the city has already proven, through Vista Ridge, that it will import East Texas groundwater at exactly this scale when the demand is there. If Bass’s water doesn’t end up in San Antonio, it will likely end up somewhere doing the same job for a similar reason.
Why this matters beyond East Texas
This is the same water story running underneath the AI data center boom covered on this blog before, just with a different buyer. Texas water is being treated as a commodity that can be identified, purchased, and moved to wherever the highest-value use happens to be, whether that’s a hyperscale server farm or a fast-growing suburb west of Fort Worth. The person or company doing the buying usually has more legal and technical resources than the rural community sitting on top of the resource. And in both cases, the people most affected tend to find out from a legal notice in the local paper, not from anyone knocking on their door first.
Anderson County’s judge learned about a plan to take three times his county’s annual water supply because a deacon happened to mention it at church. That’s not a system built for public input. It’s a system that technically allows for it, buried in a place almost no one thinks to look until it’s already moving through the approval process.