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(Bloomberg) — Water shortages in South Texas are posing major risks to a fast-growing industrial hub that’s crucial to President Donald Trump’s twin goals of dominating global energy markets and slashing trade deficits. 

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Corpus Christi, a Gulf Coast city 400 miles (640 kilometers) south of Dallas, is in the grip of a worsening drought that’s already prompted lawn-watering bans and warnings that harsher restrictions may be necessary. Seven years of abnormally dry weather coincided with rapid industrial growth in the nation’s biggest oil-export hub, stretching supplies of fresh water.  

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Municipal leaders are at odds over what to do. The city council recently halted work on a desalination plant that would have treated seawater after cost estimates spiraled to more than $1 billion and sparked outrage among some residents. The issue also tapped into long-simmering resentment of the growing industrial presence of major water users such as Exxon Mobil Corp., Koch Industries LLC, Celanese Corp., and Occidental Petroleum Corp. 

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If the drought doesn’t break in the next 12 months or so, even stricter usage limits may be necessary that would curb available supplies by 25%, officials have warned.

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“Oh, yes, it’ll impact” industry, said Brian Williams, general manager of San Patricio Municipal Water District, which counts large companies among its biggest customers. “The current drought, it looks like it’s not going to let up. Everybody’s considering what options are available out there.”

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Corpus Christi has grown from a remote 19th-century trading post to a critical nexus of the global oil, natural gas and chemical sectors. Since 2010, the city of 320,000 people has seen more than $57 billion of direct capital investment, according to economic development figures. The deepwater port is an export hub for Permian Basin crude and gas while the coastline is home to six refineries, an LNG terminal and several massive petrochemical plants. 

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About half of the city’s water supply now goes to commercial and industrial customers at a time when the inland river systems that feed the region are drying up. Choke Canyon Reservoir and Lake Corpus Christi, the city’s main water sources, are currently just 12% full, as severe drought conditions constrain river flows for hundreds of miles around. 

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Lawn watering already is prohibited in the city and severe restrictions are in effect for things like washing cars and maintaining swimming pools. The two main reservoirs are forecast to run so low by November 2026 that an emergency declaration will mandate even stricter curtailments. 

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“Everybody’s worried about that date,” said John Byrum, executive director of Nueces River Authority, which manages surface-water resources in the region.

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The struggle is pitting residents against heavy industry that provides jobs and tax revenues for schools, libraries and public safety. State climatologists aren’t expecting the drought to break any time soon. 

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Byrum, along with some local representatives and businesses, wants to build a multi-phased seawater desalination plant that could eventually become the largest in the country. In addition to the short-term need, he expects water demand to rise 30% over the coming years as the city grows.