Angela Neville, Texas Lawyer

Several attorneys, a Texas university policy group and a number of water rights groups recently urged a Texas Senate committee to simplify state groundwater regulations, saying the regulatory framework makes it difficult for businesses to carry out projects that involve the use of groundwater.

The Texas Senate Committee on Agriculture, Water and Rural Affairs heard testimony about state groundwater regulations from 18 witnesses, including several water rights attorneys, members of the Texas Association of Groundwater Owners and Producers and the Texas Desalination Association, and representatives of the Bush School of Government and Public Service at Texas A&M University. Committee Chair Charles Perry, R-Lubbock, said at the hearing in late July that the committee intends to study and make recommendations on issues that included the ownership, production and transfer of surface water and groundwater in Texas. Perry also said the committee will monitor the implementation of legislation addressed by the Senate Committee during the current session.

Leonard Dougal and Edward Small, Austin partners at Jackson Walker, were among the attorneys who testified. "It is well known that we have nearly 100 confirmed groundwater conservation districts and two subsidence districts," said Dougal, who represents businesses that develop and use water, including power generation companies and oil and gas producers. "That leads to a patchwork and inconsistent regulation of groundwater in Texas."

Some counties, Dougal said, have no regulation of groundwater. Other counties have more than one groundwater conservation district. Hays County, even with four separate entities regulating groundwater, still had unregulated aquifers, he said.

Larger regional authorities that cover an entire groundwater aquifer make more sense than authorities that end at a county line, according to Dougal. A ranch that pumps from a single aquifer but straddles two counties can end up with "different and inconsistent permitting requirements in each county," he said. Texas intends to develop and rely on groundwater to meet the state's future water needs and small groundwater conservation districts hamper the ability to manage and develop the groundwater resources, Dougal said.

"[M]ost groundwater conservation districts assert jurisdiction over brackish groundwater within their aquifers, but most have little expertise in the management of brackish groundwater and have done little to study the extent of the brackish resources within the district," Dougal said. "This greatly hampers effort to develop brackish groundwater to use for oil and gas or industrial purposes, instead of fresh groundwater."

Dougal said a better approach would be regional water authorities, overseen with local representation, that follow major aquifer boundaries. "If the legislature does not weigh in on solutions, it will be left to the courts to sort out the proper balance between property rights and regulation and it will mostly certainly take many decades for the courts to do so," he said.

Dr. Lori Taylor, an economist and associate professor at the Bush School in College Station, Texas, said the regulatory framework "limits the ability of people who own water rights to make the best use of those water assets."

Texas has "approximately 100 groundwater conservation districts and each district is making individual determinations related to pumping permits, spacing of water wells, and conditions under which the water can be transported out of the individual water conservation districts," she said. That causes water shortages and surplusages and "those differences in supply lead to a difference in price," she said.

A recent academic report from researchers with the Mosbacher Institute for Trade Economics and Public Policy outlines four alternatives to the regulatory scheme: maintaining the existing groundwater conservation district structure but changing the regulatory process, replacing the groundwater conservation districts with aquifer-based regulatory authorities, replacing the groundwater conservation districts with a statewide groundwater agency or creating groundwater bank accounts.

"I believe that any of the four solutions spelled out in this report would be an improvement over the current policy in Texas," Taylor said.

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