The SpaceX Rocket Development Facility in McGregor tests more rocket engines than any other site on the planet. And it keeps testing more.
Each test is accompanied by a plume of steam, as massive water cannons douse engines to manage the ruckus and heat they generate. As engine tests have stepped up in recent years, so has the facility’s thirst for groundwater.
Records obtained by the Waco Bridge show that SpaceX has overpumped on land it leases from McGregor for the past three years to the tune of more than 120 million gallons. So much so that the local groundwater authority has cited the operation for permit violations for three years.
The Southern Trinity Groundwater Conservation District could pursue enforcement action against SpaceX or its municipal landlord by seeking injunctions or civil penalties in district court, but it has held off on doing so.
McGregor officials hope to keep the city out of court by expanding surface water supplies to the industrial district to offset SpaceX groundwater use. The city also plans to work with SpaceX to expand the use of a water recycling plant already in use.
McGregor plans to spend $400,000 over the next six months to extend water lines into its 8,700-acre industrial park to serve current and future users. Those include the proposed Galaxy data center, which the McGregor City Council voted to sell 500 acres to on Monday.
The data center’s water needs could be as low as 3,000 gallons a day, according to project documents presented to council members.
McGregor City Manager Kevin Evans said in an interview this week that the city is working on an updated water master plan to present to the district, taking into account McGregor’s efforts to conserve and develop water supplies.
That “alternative data,” he said, will show “that there’s no need to move to litigation because (we) have a solution for the long-term pumping dilemma.” SpaceX did not respond to an emailed list of questions for this story.
Replacing groundwater
The company paid for McGregor’s wastewater treatment plant, which began operating in the spring. However, technical kinks keep it from running at full capacity and providing the expected recycled water to SpaceX, Evans said.
McGregor, which holds the permits for SpaceX’s wells, responded to each of its violation notices by citing that wastewater system and other water supply alternatives as progress towards compliance.
Overpumping from SpaceX’s wells has skyrocketed since McGregor received its first notice of violation in 2023. Overpumping amounts grew from 6.7 million gallons in 2023 to 102.5 million gallons in 2025, a fifteenfold increase.
The groundwater district normally requires permit-holders to stay within “historic use” amounts, but McGregor received a special permit in 2016 allowing SpaceX to exceed that threshold. The violations are for exceeding the limit of that special permit, plus the city’s allowance for groundwater for municipal use.
“All the groundwater in McGregor is mainly for SpaceX,” said the district’s general manager, Scooter Radcliffe.
Groundwater is the sole source of water for several McLennan County communities, but it’s a dwindling resource. Water recharge rates in this portion of the Trinity Aquifer are measured in thousands of years, where layers of tightly packed sand slow water’s downward migrations to a crawl.
The McGregor area saw a localized drop in aquifer levels by several feet from 2018 to 2022, according to a Baylor University thesis focused on improving well monitoring in the groundwater district.
Guarding the aquifer
The groundwater district was established in 2007 to keep unregulated pumping from draining the county’s aquatic piggy bank, said McLennan County Judge Scott Felton.
“We have to replace the water (SpaceX is using) or at least cut back by bringing in surface water,” Felton said. He noted that several companies use more than a million gallons a day.
The county’s largest industrial water is Graphic Packaging International, the new paper recycling mill in Waco, which is authorized to use 1.5 million gallons a day. In comparison, SpaceX in 2025 used an average of about 700,000 gallons a day, including the overpumping amount.
McGregor plans to add a 16-inch connector to supply the industrial park with at least 500,000 gallons a day of surface water, replacing groundwater use at companies such as Knauf Insulation and the Messer gas plant.
The treated water will come from Lake Belton through an existing line operated by Bluebonnet Water Supply Corporation, a Temple-based utility that has served McGregor for years. McGregor Mayor Jim Lilley is listed as a general manager at Bluebonnet.
Evans said the project will likely go to bid by the end of July and paid for by taxes on businesses inside the industrial park. The groundwater district is still deciding on what enforcement action to take after three years of violations, Radcliffe said.
The district is allowed to assess fees and propose a plan to get permit violators back into compliance. If negotiations between the two parties break down, the district can file suit.
McGregor gadfly
The most outspoken critic of SpaceX’s impact on the area — and the city’s relationship to the company — might be a 77-year-old McGregor native armed with artificial intelligence.
Dennis Fehler has made countless open records requests to the city about SpaceX operations, including the facility’s use of water. He posts his findings, AI summaries and broadsides against McGregor officials to his Facebook group, which has more than 1,700 followers.
“Here we’ve got someone overpumping the aquifer and we can’t get anybody to realize that they should be paying a premium for that water,” Fehler told the Bridge on Monday. “It’s the city manager, Kevin Evans, that’s allowing these people to overpump.”
Evans was audibly exasperated when asked if Fehler posed any valid questions about overpumping.
“Dennis is Dennis,” he said. “We’ve been working on these problems for more than 15 years.”
If Fehler is seen as the village malcontent by McGregor officials, it doesn’t come as a surprise to him.
“They perceive me as a troublemaker because I’m rocking their boat,” he said. “They don’t like it, and that’s why they ignore me rather than answer me.”
