The rapid industrialisation of agricultural lands west of Brisbane could be a catalyst for private sector investment in new water supplies, Queensland Water Minister Ann Leahy has told the ABC, which reported her comments on Friday (6 November).

Oil and gas exploration in the Taroom Trough, a proposed $32 billion data centre and the agriculture and feedlot industry based in the Western Downs have been welcomed by the Crisafulli government, the ABC reported. "For that to expand we do need to find new water sources. We have to look at all of the options available," Ms Leahy said.

She said the federal government had "constrained" access to water in the region and that the developments provided scope for investment in projects such as the long-discussed $3.4 billion Nathan Dam. "Are there options of Nathan Weir? Nathan Dam? What are those options available to us?" Ms Leahy said.

Ms Leahy, the MP for Warrego, was speaking at an economic forum in Dalby about the proposed Western Downs Digital Park. She blamed Murray-Darling Basin buybacks for "taking water away" from the region. "Once they take that water out of this region it can no longer be traded back to other industries," she said, adding that the federal government was "forcing" the state to "go and look at all of the different options that are available for this region to get new water". The ABC reported the Crisafulli government will examine options for securing new water supplies to support industrial expansion in the Western Downs.

First proposed in 1922 for the Dawson River near Taroom, Nathan Dam has repeatedly stalled over the decades, most recently in 2021, the ABC reported in June 2025, when Toowoomba and Western Downs councils renewed a push for the dam to secure water for drinking, agriculture and energy. Western Downs Mayor Andrew Smith described it then as "the most critical water project in modern Queensland history". That 2025 report said the project had been pegged to cost at least $3.4 billion, a figure a more recent report for Toowoomba Regional Council considered a "significant underestimation".

Water-Neutral Operations

Zerra DC, the developer behind the proposed data centre, has committed to what it says are "water-neutral operations". The company, which has signed an agreement with artificial intelligence company Anthropic, said each of its four proposed buildings would require 21,000 litres of water per day, but would not draw on groundwater or town water, the ABC reported.

The project's website says its data centres will use 100% air-cooled technology, with water use "limited primarily to the day-to-day needs of on-site workers, not cooling". It says rainwater harvesting and on-site recycling are the primary operational sources, "designed to meet almost all operational demand", with water deliveries retained as a backup. The town planning report lodged with the development application says there is no reticulated (town) water network in the vicinity of the site, the nearest being approximately 15km away, and lists water delivery by road tanker among the supply options.

Zerra DC chief data centre officer Matthew Ward said the company had modelled 100 years' worth of rainfall data in Dalby and found the rainwater-first approach held up, even in drought. "Through all the modelling that we've done, that has more than sufficed for the need," he said.

Environmental accounting expert Michael Vardon told the ABC the modelling might work when averaged across a year, but may not stack up in dry months. He also pointed to possible indirect water use from the site's energy supply. "You're simply displacing the water use from the data centre to the coal or gas-fired power plants," Dr Vardon said. "If you use renewables, wind or solar, then there's no additional water use there."

Progressing Too Quickly

Zerra DC chief executive David Cooper said the speed of the AI boom posed opportunities and challenges. "If we don't do things correctly here, we'll put the future ability to grow this industry in Australia in jeopardy," Mr Cooper said.

Outside the forum on Thursday night (5 November), about 15 protesters from the Western Downs Says Pause action group waved banners and handmade signs, the ABC reported. "We want it to slow it down because we know the correct rules and regulations aren't in place," Angela Prenzler said. "It seems to be progressing too quickly."

The developer says the development application is in public notification with Western Downs Regional Council, with submissions open until 11 November 2026.