Whisky Is For Drinking, Water Is For Fighting: Groundwater Wars, Texas Style

Whisky is for drinking, water is for fighting is the old saying in Texas. And it has never been proven so right as today.

Water is, after oxygen, the most vital resource we need to drink, raise livestock, grow food, allow industries to thrives, influence the weather.

According to the California Department of Water Resources, the water supply of earth is made of 97.2% salt water, 2.8% of fresh water, 0.6% of ground water, 0.01% of lakes and streams, 2.2% of glaciers and icecaps, and of 0.001% water vapor. The limit amount available of fresh water makes it a most desired and coveted commodity.

Internet has plenty of information about groundwater issues in each of our fifty states. I will give a look into the groundwater ownership in Texas not so much because I live here, but because it seems the experts indicate that the eyes of the nation are focused on us. Hopefully, our readers can relate to our situation regardless of where they live. By all means, this issue is too vast and complex to be wholly covered here, but I hope to give you a glimpse onto this vital private property right fight.

Groundwater in Texas begins with the Absolute Ownership Doctrine, which guarantees the landowner’s vested right in the groundwater under his property. It is a vested “real property” right that provides ownership.  The Texas Supreme Court adopted the Absolute Ownership Doctrine after ruling in 1904: “An owner of soil may divert percolating water, consume or cut it off, without impunity. Water is the same as land, and cannot be legally distinguished from the land. So the owner of land is absolute owner of the soil and of percolating water. Which is part of, and not different from, the soil.”

The Absolute Ownership Doctrine has reigned supreme in every ruling ever since.

The Rule of Capture, a consequence of the Absolute Ownership Doctrine, explains the manner in which a landowner may exercise his property rights in groundwater – the landowner is protected by liability when causes damages to his neighbors while producing water for any beneficial purpose.

Once the water is “captured” by the landowner, it becomes a possession and “personal property,” subject to sale, commerce, and taxation.  This vested personal property right is different from the vested real property right associated with the absolute ownership of groundwater in place (the un-captured water under your feet).

The rule of capture has caused a great conflict in water rights because, some argue, having landowners no liability for draining someone else’s groundwater, they would empty that neighbor’s right to his un-captured groundwater under his property. Therefore, they argue, there is no vested right in groundwater unless the water has been captured.

Others, however, strongly counter that that is not true. There have been limitations added on the rule of capture in the 1904 ruling that provide protection to landowners victims of willful waste and negligence of their neighbors. The rule can also be modified by contract or by “positive authorized legislation”. When it occurs, the rule is defined as Reasonable Use Doctrine or the American Rule. Also, throughout history of oil and gas and groundwater, the absolute ownership doctrine, and, consequently, the rule of capture have never been interpreted to divest owners of ownership in place, but they vest with the ownership of the surface estate. Furthermore, the Texas Supreme Court, although it has from time to time criticized the rule of capture, it has never considered nor recognized an alternative approach to undermine the principle of the absolute ownership in place; on the contrary, even when the court shifts its judgment from the Rule of Capture to the American Rule, it does not change the underlying ownership interest such rules aim to protect.

The Rule of Capture has been subject to “positive authorized legislation” in Texas and it is codified under Chapter 36 of the Texas Water Code.  The state’s preferred method of regulating groundwater is through Groundwater Conservation Districts (GCD).

In 2001 the Texas legislature established groundwater management areas (GMAs) based on the boundaries of major aquifers and forbade GCDs from prohibiting the transfer of water outside their boundaries. The same legislation allowed the GCDs to set more restrictive rules on future groundwater use if restriction apply fairly to all new and increased uses, and to provide greater protection to historic and existing use of groundwater. In other words, agriculture irrigators who have been using lots of water for a long time have better rights than the new farmers who have not pumped much, if at all, groundwater in the past.

In 2005 a major earthquake shook the landscape of groundwater management in the Lone Star State. HB 1763, signed into law, mandated the GCDs in each GMA to develop a joint management plan to establish a desired future condition (DFC) of groundwater resources within a GMA for the next 50 years. This process may allow a GCD to set a cap on water production and forbid any pumping once the cap is reached. The GCD may also try to create a priority permit system allowing those existing and historic users to pump water at the expenses of those who have never or seldom used groundwater. That means that if the historic users are using all the water allowed by the GCD, the district might deny water production to all other landowners who have conserved groundwater with the exception of household and small livestock uses, living them with few or no rights at all. Furthermore, it is on the property owner’s shoulder the burden and responsibility to challenge the fairness of the desired future condition established by the GCD, even when the Texas Water Development Board has already judge it unreasonable. Nothing requires the GCD to change its decision.

Groundwater districts had to complete the Desired Future Conditions (DFC) by September 1, 2010. No matter what the GCDs may have decided, Sect. 36.002 of the Water Code still recognizes that “nothing in this code shall be construed as depriving or divesting the owners or their lessees of the [water] ownership rights, except as those rights may be limited or altered by rules promulgated by a district.” Because of the vested right, the state may not unreasonably take groundwater without compensation.

The great clash between regulations of the groundwater districts, that can limit or forbid the production of groundwater, and the Texas Code, that recognizes ownership of the same, has ignited the groundwater wars in Texas. This clash is already visible in the Texas Courts.

Three major lawsuits about groundwater rights have been shaking Texas today.

The first one is the Edwards Aquifer Authority v. Day. The South Texas farmers Day and McDaniel raise crops and livestock on their 350-acre property. They flow water from an artesian well into a lake. Although they cannot show a historic use of water, they asked the Edwards Aquifer Authority a permit to use 700 ac/feet. They have been denied their request, receiving only 14 ac/feet, because they are not historic users. The case is now at the Supreme Court. They claimed that the Edwards Aquifer Authority took their property without compensation and filed the lawsuit.  The Court of Appeals in San Antonio ruled that they have a valid claim for a taking of private property. The court recognized their ownership in the groundwater under their real estate.  Several amicus briefs have been filed in favor of the farmers by agricultural and private property rights organizations as well as by the Ag. Commissioner Todd Staples and the Texas Comptroller Susan Combs, who indicated that indeed landowners own their groundwater. The Canadian River Municipal Authority, The Pacific Legal Foundation in California, and the cities of Victoria, El Paso, Lubbock, and Amarillo also filed on behalf of the landowners.  The Texas Alliance of Groundwater Districts as well as a few groundwater districts filed on behalf of Edwards Aquifer Authority.  So did Sen. Bob Duncan.

The City of San Antonio and the San Antonio Water System, which provides water to the city, complain that if the landowners win the case they will need to raise the water fees to their residents to pay for compensation and for all the future claims that they foresee skyrocketing against the Edwards Aquifer Authority. The chief executive officer of the San Antonio Water Supply Robert Puente, a former legislator, dangerously stated “if there is a taking, the Supreme Court has basically ruled that we no longer own the water, but that it belongs to [landowners] who can pump the water out from the ground into their holdings.”

Straight against the Texas Water Code and the Texas Supreme Court ruling of 1904, the Attorney General and the Edwards Aquifer Authority have argued that groundwater ownership rights are not vested and therefore the regulation of the GCD cannot be considered a “taking.”

What are the consequences if the Edwards Aquifers Authority wins the case? Landowners can be damaged and deprived of water underneath their land without being able to sue or be compensated. And oil and gas might follow next.

The 2005 law caused another lawsuit. The City of Del Rio sued the Clayton Sam Colt Hamilton Trust. The Trust, prior to convey a 15 acre tract to Del Rio, reserved the groundwater rights and minerals. The Trust opposed Del Rio when the city decided to drill a well and use the water. Del Rio sued the Trust on the basis that the Trust did not have ownership of the water, making the deed ineffective. The Court of Appeal ruled in favor of the Trust. An appeal to the Texas Supreme Court is now underway.

Finally, in a third case, Guitar Holdings v. Hudspeth Co. Underwater District #1, the district created a rule that granted all available water to a limit number of farmers with historic use giving them the right to irrigate or to convert their water use to sell the water perpetually to the City of El Paso. The Guitar family, being not a historic user for not having farmed their land, was banned from producing water for any purpose and, therefore, also from selling it. The Guitars fought all the way to the Supreme Court. While they lost in the lower courts, they saw the Supreme Court reverse the ruling, allowing them the right to produce groundwater for commercial purposes. Amazingly, back in 2009, the Guitar family’s attorney, Russ Johnson, found a publication titled “Groundwater in Texas” on the website of the Texas Alliance of Groundwater Districts that misguidedly reported that Texans do not have a property right in groundwater and that therefore the districts are free to regulate it away without any Constitutional limitation. If the water rights are not protected, authorities can take the water away from the landowners or restrict it without compensation. Johnson also stated that the desire future conditions are based on fear and emotion but no science.

Another clash that has not yet reached the court system is happening in Hemphill County, Texas. The Hemphill County Underground Water Conservation District decided to limit water pumping to 20% of the estimated water under the county to reach the desired future condition of its aquifer for the next 50 years. It is the only district in its GMA to do so (the others allowing to pump up to 50% in the next 50 years). This causes a loss of all the landowners who will see residents in other districts within the same GMA pumping away their own water under their own feet. One particular owner is penalized, Mr. George Arrington, who sold his water rights to Mesa Water for $450 an acre if, and only if, he has the capability to pump the substantial equivalent amount of water that can be pumped in the neighboring counties. The limits imposed by his water district would cancel his contract with Mesa. He tried to contact the water district board members, but in vain. He says that he finds himself in the same position Boone Pickens was a decade earlier when the water authority nearby the millionaire’s ranch threatened to drain the water underneath his ranch. “If he didn’t do something [forming Mesa Water and buying water rights] with his water, people were going to start taking it from him,” Mr. Arrington opined. According to Mr. Arrington, the Hemphill Underground Water Conservation District is taking away his rights to do with his property as he pleases. He is also concerned that his neighbors in adjacent counties, who can pump 50% of the water, will drain the water under his own ranch and under the whole county. His ranch is on the borderline with Roberts County. He says that he plans to solve the issue either legislatively or through the courts. (By David Bowser, Livestock Weekly 6/4/09)

Groundwater districts want to regulate water to conserve it. However, unreasonable groundwater regulations will hamper the Texas economy. Without water, farmers cannot produce crops nor water livestock, refineries cannot produce fuel, and industries in general cannot function. According to the Texas Water Development Board, scarcity of water would cost business about $9.1 billion yearly by 2010 and $98.4 billions by 2060. The state government could lose $466 million in tax revenue in 2010 and up to $5.4 billions by 2060. Texas Comptroller Susan Combs, in the 2009 publication Liquid Assets: The State of Texas Water Resources warned policy makers and the groundwater conservation districts to consider the economic impact of regulations on property owners’ rights in groundwater and on the state. She adds “ recent court rulings have affirmed the state’s long –held position on ownership of private property, as codified in … the Private Real Property Rights Act. … Groundwater is the property of the owner of the land overlying the aquifer, and efforts to interfere with this right could result in both uncertainty and enormous economic consequences for our state.”

The best solution to manage groundwater in Texas is to reasonably regulate the landowner’s right to use and commercially produce water with regulations based on proven science. According to organizations close to the matter, the science on groundwater in Texas is advanced and accurate. Private ownership would provide certainty, consistency, and balance in water planning with the individual responsibility for good stewardship and accountability. Ownership of water, like of any other asset in a free market, will encourage owners to analyze the quality and quantity of their groundwater and to maximize usage and conservation. As Amarillo attorney Marty Jones states, if the court decides in favor of ownership of private groundwater in place, the GCDs will be no longer able to give landowners within a district an “arbitrary, discriminatory, unequal, unbalanced treatment.”

Our Founding Fathers saw the importance of private property rights as they organized our Republic and wrote our Constitution because they knew that a free society is solely based on life, freedom, and the pursue of happiness, which is the obtainment and the use of private property. A landowner has the best interest to use his assets fruitfully and efficiently, more so than a distant state or federal agent who might also lack of experience. A groundwater free market will allow to balancing private property rights with economic development, and rural water producing areas with urban consuming areas based on sound science. It will establish the pace and the fair price of such water development, without artificial influences. The alternative is loss of rights without remedy and the state or an agency artificially deciding who can use water and for what reason. If water rights have to be taken by the state, there should be compensations by our Fifth Amendment, which states “No person shall be deprived of life, liberty, or property without due process of law.” Due process of law meaning legal, judicial, and governmental fair play in dealing with the People. Private property has always been protected. Thomas Jefferson and Benjamin Franklin wrote that private property was held holy by ancient Israel and by the Anglo-Saxons around the 450 A.D. These ancient principles, of which private property rights are part of, were the “wisest and most perfect ever yet devised by the wit of man.” The first version of the Fifth Amendment was in Exodus 20:15, “Thou shall not steal,” making private possessions a fundamental principle. The command not to steal makes only sense if people have the right to own possessions, including land and water, which can be unlawfully taken by those to whom they do not rightfully belong. Another fundamental principle that our Founding Fathers passed on to us is that the proper role of government is to protect equal rights. Letting a conservation district, or any other agency, arbitrarily and unfairly restrict or exclude landowners from the use of their own groundwater according to its whims is wrong and against those 5,000 year old ancient principles on which our Constitution is based upon.

It is in this spirit that many groups have joined Texans for Groundwater Rights, with other agricultural and property rights group, founded by Texas and Southern Cattle Raisers Association and Texas Wildlife Association, to defend the groundwater property rights in Texas and host seven forum around the state.

(Texas Groundwater Issues: Ownership Rights and Regulations 2010; Liquid Assets: The State of Texas Water Resources, 2009 Report by Comptroller Susan Combs; The Making of America – The Substance and Meaning of the Constitution, by W. Cleon Skousen; The 5,000 Year Leap That Changed The World, by W. Cleon Skousen; www.livestockweekly.com Cattlemen Advised Of Attorney’s Concerns Regarding Groundwater by Colleen Schreiber 4/30/09, Panhandle Rancher Says Water Rules Impinge On His Rights by David Bowser 6/4/09, 8/29/09, Attorney Gives Landowners His View Of Water “Takings” Case by David Bowser 7/22/10, Hemphill County Landowner Still Opposes Restrictive Water Rules by David Bowser 7/15/10, Hydrologist Says Water Rules Focus On Politics, Not Water by David Bowser7/8/10; TheTexasTribune.org Lawsuit Could Determine the Future of Groundwater by Morgan Smith 4/22/10; The RuralUrbanResources.org/politics_of_water.htm;

www.isws.illinois.edu/iswsdoos/wsp/illinoisgroundwater.aw.pdf;  Groundwater in Texas 2009 by Texas Alliance of Groundwater Districts; Position paper of the Texas Alliance of water Districts for the 82nd Legislature, 7/29/20; www.water-ed.org/cabriefing.asp and www.dwr.water.ca.gov/)