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Texas Supreme Court: Landowners also own the Groundwater

Texas’ official system for groundwater allocation is based on the 1904 Texas Supreme Court’s “East Case” decision which declared the “Rule of Capture” as the basis for groundwater allocation.  The Rule of Capture gives each landowner the right to capture an unlimited amount of groundwater under the land owned. 

The Texas Supreme Court, in its most significant water position since the East Case, ruled last week that the groundwater under a parcel of land is considered the personal property of the surface landowner.

Following are interesting articles from New York Times as well as an Opinion/Editorial about the recent Texas Supreme Court’s groundwater ruling.:

New York Times / Environment  http://www.nytimes.com/2012/02/25/science/earth/texas-court-says-landowners-own-groundwater.html?_r=1&partner=rss&emc=rss

National Briefing | Southwest

 Texas: Court Says Landowners Own Groundwater


Published: February 24, 2012

 The State Supreme Court on Friday ruled that landowners can consider the groundwater underneath their holdings as personal property. “We held long ago that oil and gas are owned in place, and we find no reason to treat groundwater differently,” Justice Nathan L. Hecht wrote for the court. The case involved a landowner who had been unable to get permission from local groundwater managers to use as much groundwater as he sought. Thomas Mason, a lawyer who specializes in water rights with the Austin firm of Graves Dougherty Heron & Moody, said the ruling was likely to prompt litigation by landowners wanting to sink more wells or draw more water than the local authorities had permitted. At the same time, he said, groundwater managers were less likely to be aggressive in enforcing limits on water usage. Texas has 96 groundwater districts.


Austin Statesman

Editorial Board

February 27, 2012

Groundwater ruling potentially unleashes geyser of future cases

Prompted by the severity of the current drought, Texans have been earnestly discussing how to manage the state’s water resources for the next several decades to meet the needs of a growing population and dynamic economy. This necessary discussion must now consider last week’s ruling on property rights and groundwater by the Texas Supreme Court and how it potentially threatens efforts to regulate and conserve aquifers.

The court unanimously ruled Friday that property owners own the water beneath their land just as surely as they own the oil and gas. Regulations limiting the amount of groundwater they can pump could, in some cases, amount to an unconstitutional taking of property, the court said.

More litigation is the only certainty the decision has produced. The ruling will encourage property owners who think they’ve been denied access to their water to sue for compensation.

The decision is being hailed as a victory for property rights. Clearly, landowners have an interest in the water that lies under their property, but how Friday’s ruling affects the 60 percent of Texans who use groundwater will not be known for a long time.

There are 96 groundwater districts in Texas. These districts grant landowners permission to put a well on their land to take a certain amount of water. The districts try to strike a balance among the landowner’s needs, the needs of other Texans who rely on the same water supply and the needs of the aquifer to keep it environmentally sound.

Every one of these districts now is vulnerable to being sued by an aggrieved landowner. Regulators must consider the possibility of being ordered to pay thousands of dollars, if not more, to a landowner whenever they issue a permit. The likely effect is to freeze regulators with fear of litigation.

The case in question involved two Bexar County ranch owners, Burrell Day and Joel McDaniel, who sued the Edwards Aquifer Authority when it issued a permit that limited the amount of water they could pump to grow crops on their 350-acre ranch to 14 acre-feet — about 4.6 million gallons — rather than the 700 acre-feet, or 228.1 million gallons, they had requested. Day and McDaniel claimed the authority unconstitutionally took their property without compensation. The Texas Supreme Court agreed.

The court equated the ownership of groundwater with the ownership of oil and gas, but did acknowledge that water should not be regulated in the same way as oil and gas.

“Unquestionably, the state is empowered to regulate groundwater production,” the court opinion, written by Justice Nathan Hecht, says. “In many areas of the state, and certainly in the Edwards Aquifer, demand exceeds supply.”

The question in the regulation of groundwater, the court found, is whether the regulation is reasonable or whether it is an unreasonable government taking of property.

Lawsuits await as landowners and regulators fight over the meaning of “reasonable.”

How much of the water underneath their land do landowners own? When landowners pump water from an aquifer, they are drawing water from the entire aquifer, not just from the part that lies immediately beneath their land.

A couple of million Central Texans rely on the Edwards Aquifer. Where do an individual’s property rights end and those 2 million others’ rights begin?

If the right applies to individuals, then we assume it also applies to industry. Power plants, refineries and any other large industrial user of water struggling to access surface water supplies — Texas law treats surface water differently from groundwater, regulating it more tightly — could potentially access without limits any groundwater that lies under land it owns.

In 1904, the Texas Supreme Court agreed that groundwater was such a complete mystery — “so secret, occult, and concealed” — that it was foolish to try to legally control it. We know a lot more today about groundwater — its sources, its movements and its connection to surface water — than we did in the early 20th century. It’s important to preserve property rights, but it’s equally important to conserve and protect all our water supplies.

As we explore how to best manage our water in the years ahead, perhaps the time has come for the Legislature to think about treating groundwater the way state law now treats lakes, rivers and streams.

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