Since the states have been unable to come to a new agreement, the U.S. Bureau of Reclamation will dictate the terms of a new policy going forward. And it will likely be less water for everyone.

“You will be reading scare headlines all around,” said Sarah Porter, the director of the Kyl Center for Water Policy. “Maybe you saw a really scary ad during the Olympics.”

“Five or 10 years ago, the assumption was California is not going to help Arizona with its water problem,” said Sarah Porter, the director of the Kyl Center for Water Policy. “But in the last few years, that view has softened, and we’re seeing more interest by different entities in California in at least having a conversation.”

“The thing I keep trying to tell people is, in the Colorado River Basin, we are not running out of water,” Rhett Larson, a professor of water law at Arizona State University, said. “We are running out of cheap water.”

One federal option, which could realistically go into effect, would cut water to the Central Arizona Project by nearly 60%, according to Rhett Larson, an ASU water law professor and chief legal counsel for the Arizona Municipal Water Users Association.

“People’s response to the threat was, we’re going to retrench and fight,” Larson said.

Kathryn Sorensen, director of research with the Kyl Center for Water Policy, said three key factors are driving the increases: inflation, aging infrastructure, and the dwindling supply from the Colorado River.

On inflation, Sorensen pointed to the rising cost of equipment and labor. On infrastructure, she said the systems that deliver safe drinking water are overdue for replacement.

Kathryn Sorenson, a water policy expert at ASU's Kyl Center for Water Policy, said the canals probably won't run dry, but the cuts will carry real consequences.

"I think we're just looking at having to make cuts that have real significance for regional economies," Sorenson said. "And of course that's difficult to do. And of course everyone is gonna fight for their way of life, including Arizona."

Sarah Porter, director of the Kyl Center for Water Policy at Arizona State University, said it could be a “very tidy solution to a really big problem.”

“I think it's a win-win,” Porter said. “San Diego County Water Authority has an overbuilt desal plant, and they would like help paying for that most expensive water and there are water users in southern Nevada and central Arizona that are urgently looking for new water supplies because they're facing uncertainty, except for certainly very deep cuts.”

Every day, hundreds of thousands of drivers travel Phoenix-area freeways lined with desert trees, shrubs and cactuses. Few likely consider what it takes to keep those landscapes alive, or how much water it requires. A new partnership between Arizona State University and the Arizona Department of Transportation is taking a closer look.

Led by Harry Cooper, director of water conservation innovation for the Arizona Water Innovation Initiative, the ADOT Urban Freeway Landscape Water Use Efficiency Project aims to better understand how much water is used to irrigate freeway landscapes, and how to use less while keeping plants healthy.

“They hold great promise. They do incentivize conservation. They do create tremendous operational flexibility,” said Kathryn Sorensen, director of research at Arizona State University’s Kyl Center for Water Policy. “I think people want to see them go forward. They just also know that there’s some things that need to be fixed.”

Despite local backlash, water experts and many local officials appear to have largely made their peace with the industry’s arrival — and with the Phoenix region’s emergence as one of the nation’s largest AI infrastructure clusters.

“There’s not a hair-on-fire context right now,” said Sarah Porter, a fellow at Arizona State University’s Kyl Center for Water Policy. “We just don’t see it.”