Warning of a potential “catastrophic collapse” of the water supply in the Southeast, the U.S Interior Department is placing restrictions on water use from Lake Mead. Federal officials have declared a Tier 2a shortage for the Lower Colorado River Basin, requiring cuts in water use that will reduce Arizona gets by 21 percent, and Nevada by 8 percent.

The cuts have the largest implications for farmers, who use 74 percent of the water from the Colorado Basin. But the impact may also be felt by the data center sector, whose water use is already under intense scrutiny in Phoenix, which has emerged as a key growth market for cloud computing infrastructure.

The reductions were expected, but represent a new phase in the water crisis in the drought-stricken southwest, which has drained Lake Mead and Lake Powell to historic lows. The reductions are designed to prevent reservoirs from falling to critically low levels that would threaten water deliveries and power production.

“In order to avoid a catastrophic collapse of the Colorado River System and a future of uncertainty and conflict, water use in the Basin must be reduced,” said Assistant Secretary for Water and Science Tanya Trujillo. ““Every sector in every state has a responsibility to ensure that water is used with maximum efficiency.”