CORPUS CHRISTI, Texas—South Texas lured Tesla, along with Exxon Mobil and other energy behemoths, with the promise of land, cheap energy and, perhaps most critically, abundant water.

The companies spent billions of dollars over the past two decades building plants that use huge amounts of water to transform fossil fuels into gasoline, jet fuel and other refined products. More set up shop in recent years to refine lithium for electric-vehicle batteries and crank out plastic pellets. All were drawn to the region by its juicy tax deals, deep-water Gulf Coast port and latticework of pipelines that ferry cheap natural gas and crude oil.

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