1. “Whiskey is for drinking and water is for fighting.” Mark Twain TACC Cooperative Managers’ Conference Ruidoso, NM July 15, 2004

2. “Here is a land where life is written in water.” Quotation of the language in the Colorado Capital Building “When the well’s dry, we know the worth of water.” Benjamin Franklin

3. Objectives Historical Perspective of Texas Water Doctrine Current Water Law in Texas Texas Senate Bills 1 and 2 Research in Water Issues Future Water Issues

4. Water Use in Texas

5. Surface Water Use in Texas Total Use: 6.83 million acre-feet in 2000. Source: Texas Water Development Board, "Summary Historical Water Use, 2000," 2003.

6. Groundwater Use in Texas Total Use: 10.03 million acre-feet in 2000 Source: Texas Water Development Board, Summary Historical Water Use 2000 (2003)

7. Texas Water Doctrine Surface Water – which includes streams, rivers and reservoirs. –Appropriated Water Rights Groundwater – which includes all percolating water. –Rule of Capture Groundwater – which includes underground waters running in defined channels. –Appropriated Water Rights

8. Surface Water Appropriation Doctrine Surface water is the property of the State with the right of use obtained through a legal process. Water rights are granted by state license to use a specified amount of water, at a specific location, for a specific purpose.

9. Appropriation Doctrine Priority - “first in time, first in right” –Applies to the allocation of water between appropriators in time of shortage. Beneficial Use – Normally easily satisfied –The main issue being the amount in excess of the intended use.

10. Surface Water Resources of Texas

11. Groundwater Percolating groundwater –Rule of Capture –All underground water is considered as percolating, except when it is proven that the alleged subterranean water course has the characteristics of a stream Underground streams –Appropriated Water Rights

12. Major Aquifers of Texas

13. Rule of Capture Houston & Texas Central Railway Co. v. East –The 1904 Texas Supreme Court case that established the rule of capture in Texas. –In East the rule of capture evolved from a tort preclusion to a vested property right of absolute ownership. Goes back to the English case of Acton v. Blundell which established the common law principle of property law.

14. Common Law Principle of Property “ to whomever the soil belongs, he owns also to the sky and to the depths.” In Texas terms the “heaven to hell” ownership theory. Only state in the western US which applies absolute ownership to govern the capture and use of groundwater.

15. Rule of Capture A landowner has a right to take for use or sale all the water that he can capture from below his land as long as the water is beneficially used and isn’t intentionally wasted or negligently result in the subsidence of neighboring lands. “law of the biggest pump”

16. What is the current state of groundwater policy in Texas? The Court has upheld the Rule of Capture with some modifications.

17. The Rule of Capture has been upheld by the Court on numerous occasions. Texas Co. v. Burkett (1927) Pecos County Water Control and Improvement District No. 1 v. Williams (1954) Denis v. Kickapoo Land Co. (1989) Sipriano v. Great Spring Water of America (1999)

18. The Rule of Capture has been modified by the Court to prevent (1) willful waste, (2) malicious harm to a neighbor, and (3) subsidence. City of Corpus Christi v. City of Pleasanton (1955) Beckendorff v. Harris-Galveston Coastal Subsidence Dist. (1977) Friendswood Development Co. v. Smith Southwest Industries (1978)

19. What is the current state of groundwater policy in Texas? The Court has upheld the Rule of Capture. The Court has recognized the role of the Legislature in groundwater and resource regulation.

20. The Court held that water regulation is essentially a legislative function. Barshop v. Medina County Underground Water Conservation Dist. (1996) Sipriano v. Great Spring Water of America (1999)

21. Conservation Amendment The Conservation Amendment was added to the Texas Constitution in 1917. The Amendment declared that conservation of the state’s natural resources, including water, are public rights and duties.

22. Texas Oil and Gas Law Also is rooted in the rule of capture. However, in 1931 the Texas Railroad Commission was given authority by the Texas Legislator to regulate oil and gas production to avoid physical and economic waste.

23. What is the current state of groundwater policy in Texas? The Court has upheld the Rule of Capture. The Court has recognized the role of the Legislature in groundwater and resource regulation. The Legislature has recognized UWCDs as the preferred method of managing groundwater.

24. Underground Water Conservation Districts Texas Legislature established underground water conservation districts (UWCDs) with passage of the Texas Groundwater District Act of 1949 for purpose of conserving and managing groundwater Chapter 36 of the Texas Water Code provides general statutory authority for regulation of groundwater by districts.

25. Senate Bill 1 Enacted in 1997. SB 1 combined local control with statewide oversight to develop consensus-based regional (16 planning regions) and statewide water plans. SB1 requires the state water plan be used as a guide for state water policy. SB 1 recognized Underground Water Conservation Districts as the preferred method of managing groundwater.

26. Senate Bill 2 Enacted in 2001. SB2 continued the focus on water planning and management by the creation of new UWCDs and a streamlined process for landowners to create a district. Fundamental premise is that water management must become more cohesive and less fragmented.

27. Added to districts’ permitting authority to impose more restrictive permit conditions on new permit applications. Strengthened districts’ authority to regulate spacing and production. Authorized districts to impose a reasonable fee on groundwater transported out of the district.

28. What is the current state of groundwater policy in Texas? The Court has upheld the Rule of Capture. The Court has recognized the role of the Legislature in groundwater and resource regulation. The Legislature has recognized UWCDs as the preferred method of managing groundwater. The Legislature has given UWCDs broad authority to regulate groundwater.

29. What can a UWCD do? UWCDs have broad authority to regulate groundwater use and production. Limit production based on tract size to conserve, preserve and protect groundwater. –This authority curtails the rule of capture’s doctrine allowing small tract landowners the right to pump as much water as a large tract owner.

30. Minimize the drawdown of the water table by setting production limits on wells by rule and limiting production based on acreage. Shall regulate production according to the hydrogeological conditions of the aquifer. Regulate production through permitting and “shall consider” a permit’s impacts on groundwater resources, surface water resources and existing permit holders. –May also consider anticipated off-site impacts from the proposed production.

31. Permits are subject to modification by the district. More restrictive conditions may be placed on new permits.

32. Groundwater Marketing The transfer of water/right between a willing seller (landowner) and a willing buyer. By lease, sale of right, sale of water, or land purchase. Exporting refers to the transfer of water outside of the county, aquifer, water basin or UWCD.

33. Most groundwater marketing refers to a transfer from agricultural use (rural) to municipal or industrial use (urban).

34. Drivers for Groundwater Marketing Urban population growth Limited surface water supplies Drought impacts on cities Aquifer availability to cities Value to landowners

35. Incentives for Groundwater Marketing Aquifers are drought resistant The water is often less expensive versus surface water supplies There are willing buyers and sellers Few governmental controls

36. Mesa Water Inc. T. Boone Pickens Has about 150,000 acres with an estimated 3.3 million acre-feet of usable groundwater under lease in Roberts County, TX. Has obtained permits from the Panhandle UWCD to pump one acre-foot annually per acre. One-half the water stored in the aquifer in 1998 must still be available in 2050.

37. Breaking News It was reported by the Dallas Business Journal (June 23, 2004) that T. Boone Pickens expects to make a deal soon with entities in either the Dallas-Fort Worth Metroplex or San Antonio -- or both -- to sell 200,000 acre-feet of water. Pickens said he plans to sell the water for $500 an acre-foot. The price includes delivering the water through a nine-foot-diameter pipeline to be built through right-of-ways acquired by creating a fresh water supply district.

38. Water Research at Texas Tech University The Department of Agricultural and Applied Economics has a long history of research in water issues. Due to the location of Texas Tech University, the majority of this research has focused on issues of relevance to the Southern High Plains of Texas.

39. Research conducted in the Department of Agricultural and Applied Economics has analyzed water issues ranging from farm level utilization and conservation to the long-term regional socioeconomic consequences of underground water utilization.

40. Specific Research Studies

41. Optimal Intertemporal Allocation of Groundwater for Irrigation in the Texas High Plains - 1992 A key finding in this study was that the adoption of advanced irrigation technologies which utilize scarce underground water resources more efficiently would NOT necessarily result in improvements on water conservation efforts. In fact, it was found that accelerated utilization of underground water resources could result from the widespread availability of sophisticated irrigation systems.

42. An Analysis of Producer Participation in the Texas Agricultural Water Conservation Loan Program - 1994 This study suggested that loans to crop producers under the program should require the REPLACEMENT of current irrigation systems with more efficient ones, but that NO loans should be made available for the establishment of efficient irrigation systems on cropland which is not currently under irrigation practices.

43. Agricultural Sustainability in the Texas High Plains: The Role of Advanced Irrigation Technology and Biotechnology - 1998 This study evaluated the potential role that the adoption of advanced irrigation technologies and the development of bio-engineered crop varieties possessing traits which would enable to them endure water stress could have on water conservation efforts and long term sustainability of agriculturally related activities.

44. Economic Impacts of the Depletion of the Ogallala Aquifer - 1998 This study evaluated the impact of changes in agricultural production on the Texas High Plains economy due to decreased availability of groundwater. It was found that as the amount of water available for irrigation decreased, area producers would transition to non-irrigated cropping systems, with a major shift toward cotton. The study concluded that the regional economy would be negatively affected due to the shifts in agricultural production stemming from the declining availability of groundwater for the production of irrigated crops.

45. Water Conservation Policy Alternatives for the Southern Portion of the Ogallala Aquifer - 2003 This study evaluated the impact of various water conservation policy alternatives on the regional economy of the Southern High Plains. A policy limiting aquifer depletion to 50% in 50 years was found to be the most efficient compared to a annual limit to pumpage or a water use tax.

46. Towards an Integrated Water Policy Model for the Texas High Plains This project has as an objective to develop a water policy planning model that will be capable of addressing region-wide economic, environmental, and hydrologic concerns. This integrated modeling links a groundwater hydrology model to a regional economic model.

47. Water Policy Alternatives for the Southern Ogallala: Economic and Hydrological Implications The objective of this project is to analyze and evaluate the impacts of selected water conservation policy alternatives on the Southern Ogallala aquifer and assess the impacts on the regional economy. Expands the scope of the water policy analysis and is part of the federally funded Ogallala Initiative.

48. Water Issues Water marketing Rule of Capture How UWCDs use their authority to regulate groundwater use Transport of water out of a UWCD

50. Edwards Aquifer The City of San Antonio relies almost entirely on the Edwards-Balcones aquifer for its water supplies. In 1990, the Lone Star Chapter of the Sierra Club (with the cooperation of the Guadalupe-Blanco River Authority) filed suit to limit withdrawals from the Edwards Aquifer to protect certain endangered species under the Federal Endangered Species Act.

51. The Court held that the Edwards Aquifer was an underground stream, therefore, placing it under the Appropriated Water Rights Doctrine. In 1993, the Texas Legislature created the Edwards Aquifer Authority.

52. The act that created the Edwards Aquifer Authority also included the following provisions: –The Edwards Aquifer is not an underground river and not subject to management as surface water; –Groundwater rights are private property and any taking requires compensation; –Prescribes minimums to be allocated for irrigation use.