An Argument for the Statewide Regulation of Groundwater in Texas

 

An Argument for the Statewide Regulation of Groundwater in Texas:

“Hydro-politics” After Guitar

Introduction

In 1991, a catfish farm near the city of San Antonio began using as much as forty million gallons of groundwater per day. This groundwater equaled 25 percent of San Antonio’s total pumpage.¹ Today, large cities in Texas are competing for groundwater wherever they can find ample supplies, focusing on groundwater under rural communities.² Since irrigators use the most groundwater, agriculture holds the last big pool of available groundwater for rapidly growing cities. By 2050, almost 900 cities--representing 38 percent of the projected population of Texas--will need to either reduce demand through conservation or develop additional sources of water supply.³ If a drought comparable to the record drought of 1950-56 occurs with projected 2050 requirements of water demand, less than half of the municipal and industrial demands could be met.⁴

The recent decision by the Supreme Court of Texas in Guitar Holding Company, L.P. v. Hudspeth County Underground Water Conservation District No. 1, et al. facilitates the sale of groundwater by large landowners to the cities.⁵ Texas policymakers have encouraged the decentralized allocation of groundwater by local groundwater conservation districts rather than through proration by a statewide commission. Now, powerful interests vie for the dwindling groundwater and this competition calls into question whether or not the current regulatory regime provides a rational policy for preventing the waste of groundwater needed by Texans for survival in the twenty-first century.

Texas voters added the Conservation Amendment to the Texas Constitution in 1917.⁶ The amendment declared the conservation of the state’s natural resources to be public rights and duties.⁷ Presently, about one-half of all municipal water comes from groundwater, so communities are pitted against communities because laws and policies favor localism.⁸ The Texas Water Development Board (TWDB) has identified and characterized nine major and twenty minor aquifers based upon the quantity of water supplied by each. The depletion of aquifers for irrigation in light of expanding municipal water requirements raises questions about the maintenance of some big farming systems. ⁹

Some analysts promote statewide regulation as the fulcrum for the sustainability of groundwater. Other experts argue that other regulatory controls or free market conditions adequately serve the citizens of Texas. These Texas “hydro-politics” may necessitate statewide regulation in order to avoid the involvement of federal agencies in the regulation of groundwater. As the needs are not satisfied, can the fragmentation in the current regime meet the constitutional mandate?¹⁰

This article provides an overview of groundwater conservation districts and recommends the regulation of groundwater by a statewide commission. Topics discussed include the rule of capture, doctrine of prior appropriation, creation of groundwater conservation districts and their rule-making authority, the Guitar case, groundwater rights, marketing groundwater, reasonable use approach, legislation, planning groups, best management practices, state water plans, federal agencies, and statewide regulation.

Background Information

The rule of capture has often been called the “law of the biggest pump,” because Texas courts have adopted, and the legislature has not modified, the common law rule that landowners have the rights to take for use and sale all the groundwater that they can capture from below their lands subject to any court rules regarding waste and applicable rules approved by groundwater conservation districts (Districts). ¹¹ Presently, Texas is the only major state to adhere to the rule of capture in its traditional form.¹² The rule lacks compatibility with the groundwater regulatory scheme because a District cannot control what happens in the surrounding Districts. For example, San Antonio purchased land in Bexar County situated over a different aquifer than the Edwards Aquifer. The city has a “big pump” and farmers in the area remain defenseless to stop the withdrawals.¹³

The western doctrine of prior appropriation governs surface water--owned by the state of Texas. The rules of capture and prior appropriation encourage incompatible behaviors by water users, depending on the sources from which they draw water. These different rules contribute to the deleterious effects of droughts by treating surface and groundwater as separate legal entities while ignoring the fundamental hydrologic connection between them.¹⁴

In order to regulate groundwater, the Texas Legislature first authorized the creation of “underground water conservation districts” later renamed groundwater conservation districts in 1949. ¹⁵ The first District was formed in Lubbock in 1952. Of the 89 Districts in existence, more than half were created in the last decade. These Districts cover more than half of the counties in the state of Texas.”¹⁶ Districts that do not cover an entire aquifer are required to coordinate with other Districts to manage groundwater from that aquifer.¹⁷

The Districts provide rules for conserving, preserving, protecting, and recharging groundwater to prevent waste of groundwater.¹⁸ These rules may restrict pumping, require permits for wells, delineate well spacing, establish maximum rates of water use, and define out-of-district export requirements.¹⁹ Most of the conflicts within Districts involve their permitting rules that protect and define historic use.

Marketable ownership rights in groundwater are subject to rules promulgated in the Districts. The rules of some Districts have severely limited or extinguished landowners’ rights to export groundwater for municipal and industrial demands or to produce groundwater for the benefit of historic, existing or local use.²⁰ A permitting program remains the most administratively efficient method for a District to regulate activities.²¹

In the Guitar case the rules relating to transfer permits in Hudspeth County Groundwater Conservation District No. 1 (Hudspeth District) were invalidated. The District’s rules denied the Guitar family an equitable opportunity to produce their groundwater for the sole reason that they did not engage in irrigation during the historic use period. Such use determined the extent of validation permits that determined how much groundwater could be sold to the city of El Paso. The Court determined that the transfer permits were new within the meaning of §36.113(e) of the Texas Water Code because no landowner in the Hudspeth District had ever transferred groundwater outside the District or obtained a permit to do so. Therefore, the Court held, “The District’s transfer rules, in essence, grant franchises to some landowners to export water while denying that right to others.”²² All the landowners in this significant case wanted to export as much groundwater to El Paso as legally permissible. ²³

Since groundwater constitutes recognized property rights, these groundwater rights can be sold, leased, or transferred to other users. Prior to the authorization of Districts, land ownership was the sole legal requirement for determining whom could use the groundwater, in what quantities, and for what purposes, and often specified when and where the groundwater could be used. Real property owners still control groundwater in the unregulated areas. ²⁴

Texas landowners have vested rights to groundwater--even if they have never captured one molecule of water--so they can sell their groundwater for private gain.²⁵ This trading of groundwater rights may encourage conservation and the more efficient allocation of this scarce, life-sustaining natural resource. ²⁶ Elected officials would be less able to deliver groundwater to particular constituencies under a market system.²⁷ After capping the resource, “cap and trade” would sanction a trading mechanism by way of use permits.²⁸ The marketing of groundwater rights could be apportioned and unitized by a statewide regulatory commission.

Texas lawmakers could adopt reasonable use as the regulatory approach, thereby increasing the chances for statewide regulation to succeed. The legislature would have to abrogate the rule of capture in order to install the reasonable use approach. Formal adoption of reasonable use would encourage Districts to work together for the sustainability of aquifers.²⁹ As harmful uses are identified, new norms could apply prospectively. The groundwater users could shift to new reasonable uses or sell their groundwater.³⁰

Beginning in the 1950s, the state courts began to call upon the legislature to address management and protection of groundwater through the powers granted in the Texas Constitution.³¹ Since the amendment charged the Texas Legislature with these duties, in its decisions over the past half-century, the Supreme Court of Texas has overwhelmingly reiterated the Legislature’s power to regulate groundwater.³² Meaningful reform could protect the historic uses and place restrictions upon massive withdrawals.³³ Otherwise, profligate users squander this essential natural resource.

In 1997, Texas Senate Bill 1(S.B.1) created a long-range, bottom-up, water planning process. Under S.B.1 the local Districts form regional planning groups. These water planning groups are responsible for assessing the needs for water in their regions during drought-of-record conditions and developing conservation, management, and mitigation plans to meet those needs. ³⁴ The planning groups submit their proposals directly to the TWDB for inclusion into the five-year state water plan.³⁵ Senate Bill 2 passed in 2001 amended §§36.116 and 36.122, respectively, of the Texas Water Code by outlining a District’s specific powers to regulate production of groundwater by delineating the methods that might be included in a District’s rules and setting out the authority of a District to regulate transfers of groundwater out of the District.³⁶ Senate Bill 3 (S.B.3) passed into law in 2007. This law takes a comprehensive approach to the state’s water policy, that includes stressing conservation, providing for future sources of water, and maintaining the ecology of all water resources. S.B.3 also requires the TWDB to develop and implement a statewide awareness program to educate citizens about water conservation.³⁷

In order to develop a statewide water plan, Texas is divided into sixteen regions. The regions submit their plans to the TWDB. If disputes arise between the management plans of the Districts and those of the regional water planning groups, then provisions in the Texas Water Code prescribe a means for settling these disputes.³⁸ The boundaries of planning groups are defined in the Texas Water Code, and the statute contains no mandates as to what the planning groups must do.³⁹ Additionally, the Texas Legislature created the Texas Water Conservation Implementation Task Force (Task Force); subsequently, the Task Force prepared the Best Management Practices (best practices) in partial fulfillment of their charge to review, evaluate, and recommend optimum levels of water use efficiency and conservation.⁴⁰ Waste has been defined by Texas courts as the intentional loss of water. This definition could possibly change to best practices as specified by the Task Force. Conservation standards have been proposed for municipalities. These standards could be enforced by the denial of TWDB funding.⁴¹

Although the Districts are locally controlled and managed, these entities are subject to some state regulatory requirements. “Water for Texas—2002” is the first state water plan since the passage of S.B.1. Within the TWDB the process fastened on local and regional decisions with the goal of boosting the likelihood of plan implementation over that of previous plans.⁴² The 2007 State Water Plan was adopted on November 14, 2006. Under this present plan each regional planning group reviews water use projections and water availability volumes in dry or drought-of-record conditions. When a water need is identified, the planning group recommends a water management strategy to meet the need. Once a planning group adopts the regional water plan, the plan is sent to the TWDB for approval.⁴³

Federal Agencies

On August 17, 1956—toward the tail end of the drought-of-record—the level of the Edwards Aquifer fell to a record low. Comal Springs went dry for five months, killing all aquatic life, including the endangered fountain darters. The Endangered Species Act became the instrument that eventually brought state regulation to the aquifer and the end to the unrestricted withdrawals.⁴⁴ Federal intervention was necessary before Texas legislators enacted legislation creating the Edwards Aquifer Authority (EAA) to protect the Edwards Aquifer.

Since the establishment of the Environmental Protection Agency in 1970, federal regulation over national watercourses has increased. A failure to address water problems in a timely fashion—as the experience of Texans with the Edwards Aquifer showed—could prompt management intervention by federal agencies such as the U.S. Corps of Engineers, Fish and Wildlife Service, and the Environmental Protection Agency. Although federal jurisprudence has historically relegated water management to the states, a failure by Texas solons to construct a rational groundwater polity raises the risk of increased federal regulation.

Statewide Regulation

S.B.1 has clarified that local Districts should be created to manage groundwater. Modifications on the rule of capture (Texas law since 1904) will be made in the Districts.⁴⁵ Has there been enough time since S.B.1 (1997) for a fair assessment to be made about how well the Districts have managed groundwater? Texas Supreme Court Justice Nathan L. Hecht in Sipriano v. Great Spring Waters of America, Inc. insisted, “In the past several decades it has become clear, if it was not before, that it is not regulation that threatens progress, but the lack of it.”⁴⁶ In capping the annual withdrawals from the Edwards Aquifer, the Texas Legislature resorted to special legislation in 1993. These laws create powers over a vital resource; hence, the EAA and the Districts will be challenged on constitutional and other grounds as they attempt to exercise these powers.⁴⁷

A huge body of laws and regulations has evolved as Texas became one of the leading oil and gas producing areas of the world. Texans have had a long association with regulation of oil and gas by the Texas Railroad Commission (TRC)—a powerful state agency. The TRC unitizes oil and gas leases for better field results and greater equity for the participants. The diverse regulatory needs call for a more centralized system of governance with respect to groundwater. Would a statewide commission on groundwater similar to the TRC reasonably achieve this purpose?

The halcyon days when the Ogallala Aquifer was thought to contain an inexhaustible supply of good water have now long passed us by. In the High Plains region, residents have turned to state and federal governments after drawing down their portion of the Ogallala.⁴⁸ Having Lubbock and Amarillo as its key cities, the High Plains has remained basically an extensive farming and ranching region—dependent upon irrigation. Nevertheless, water czars have assimilated large tracts of land and plan to sell their groundwater to key cities. The conflict arena between rural and urban water users cannot be over emphasized.

Meaningful protections are needed so that regulations apply broadly to all water users similarly situated. Indeed, numerous users often span state and national boundaries. The water problems of other states affect water resource management in Texas. The managers who control the Districts are geared to satisfy local constituencies, making consideration of interstate water issues problematical.

Conclusion

At the beginning of the twentieth century, the city of Los Angeles touched off the most vicious water war in American history when it transported the water of Owens Valley (with about 38,000 established acres of fruit orchards, melon vines, and alfalfa) to Los Angeles and its environs.⁴⁹ This outlying community was unable to protect its economy, identity and way of life. City officials in San Antonio, El Paso, Amarillo, Lubbock, and many smaller Texas cities search actively and broadly for water to supply their expanding requisites. As with rural Owens Valley, these vulnerable communities that transfer their groundwater to the cities will experience losses of employment, diminished tax bases, and changes to their ecologies. The sale of groundwater can even alter the quantity of surface water in a stream, just as the failing levels in the Edwards Aquifer left the Comal Springs dried up.

The complex destiny of groundwater supercharges and permeates the interdisciplinary areas of law, politics, and science. A state commission removes critical paths for making decisions from local politicians, placing these decisions at the state level—a level responsible to Washington, D.C., sister states, and to the treaties and protocols with respect to Mexico.⁵⁰ If a single agent or source does not control these resources, the groundwater will be exploited on a first-come, first-served basis.⁵¹ Also, the fragmented District rules result in barriers that hamper the trading of groundwater rights. If one accepts an economic premise that groundwater will move to its highest and best use in a free market, then statewide regulation of groundwater may foster a uniform trading framework. Not only will strong statewide regulation stimulate the marketing of groundwater rights in a coordinated manner but also thwart federal intervention.

A water magnate could reach out and acquire groundwater rights--then sell to the highest bidder--without respect for the overall integrity of the watershed management plan.⁵² Because of lax Texas statutes on groundwater pumping, there needs to be statewide watershed planning to safeguard precious groundwater. The unanimous decision in the Guitar case opens the door for large “water ranchers” to sell for profit the groundwater flowing beneath their extensive acreage. At this moment the best practices soundly articulated by the Task Force are only suggestions and not requirements. As evidenced by legislation passed since 1996, Texas lawmakers have recognized the constitutional public rights and duties with respect to groundwater. If the Districts are analogous to “loose horses in a field” with each one following his nose, how much time should expire in anticipation of a rational regime?⁵³

Any regulating bureaucracy must balance conflicts between cities, industries, and irrigators; between water-rich and water-poor areas; and among groundwater users in general as supplies have been diminished because of population growth and sometimes uncontrolled withdrawals from aquifers. In the face of greater than historical withdrawals and to assure fairness and equity, Texas legislators should pass laws creating statewide regulation in order to sustain ancient groundwater. However, legal and political barriers impede the crucial actions necessary for the creation of new state laws and regulations for addressing these critical issues.⁵⁴ The longer the Texas Legislature postpones the stronger regulation of groundwater then the greater likelihood that implementation might be too late to overcome the sins of excessive withdrawals—uncontrolled and uncoordinated. Someway, in the 81^st legislative session, Texas legislators must address the regulatory deficiencies embedded in the current plan.