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Texas Agriculture Archive

December 5, 2003

Water lease export
deal under scrutiny

By Lana Robinson
Field Editor

Water, who owns it, and what regulatory authority has jurisdiction over it remain issues of importance to all Texans—particularly agricultural producers in parts of the state that receive little rainfall and with limited groundwater. Where water is scarce, the thought of an outsider coming in and depleting the reserves weighs heavy on the mind. That's why people living in Far West Texas are asking questions regarding an offer by Rio Nuevo, a partnership of Midland and Austin investors, to lease 510,606 acres of state-owned land in six counties in their region for the purpose of exporting the water beneath it.

Rio Nuevo has offered what may be as little as 20 cents an acre for leasing rights and the ability to drill into the underground aquifers of Brewster, Presidio, Jeff Davis, Culberson, Hudspeth and part of El Paso counties. Initially, the company proposed to pump up to 300,000 acre-feet of water annually into the Rio Grande for delivery downstream. An acre-foot of water is approximately 326,000 gallons. Rio Nuevo's latest proposal is scaled back to16 billion gallons of water per year, or approximately 50,000 acre feet.

On the one hand, the water is seen as potentially a whole new source of revenue for the Permanent School Fund, according to the General Land Office (GLO), headed by Commissioner Jerry Patterson. But critics argue that it can hurt agriculture and the environment. Agriculture Commissioner Susan Combs and state Sen. Frank Madla (D-San Antonio), who represents rural counties surrounding Big Bend National Park—where the state land is located—oppose the deal. Arguing that the draining of significant amounts of water from the ground could harm wildlife and create economic damage, Combs suggested that the idea should not go forward until it has been studied by the Texas Legislature, the Texas Commission on Environmental Quality, and the Water Development Board.

"Mr. Patterson's charge is to raise money for the Permanent School Fund, using those state-owned lands," said Texas Farm Bureau Organization Director Joe Maley. "If we had a concern, it would be that state-owned land should be bound by the same rules as private landowners. The state should have no advantages over a private person. If they are going to sell water, and the land is covered by an underground water conservation district, they should have to observe the rules. That is so important, to make sure they don't decimate a small area."

In a letter Patterson sent to the Far West Texas Water Planning Group, in response to their invitation to have him come to a meeting in Van Horn, Nov. 20, to further explain the Rio Nuevo, Ltd. proposal, the GLO commissioner wrote: "....water is a vital resource, yet, on state lands, it is also an asset which can be maximized to benefit our Texas schools. To that end, the School Land Board has adopted a water policy that relies on four guiding principles to consider when looking at any water development proposal:

"•To be considered, projects must show how they will make money for the schoolchildren of Texas.

"•Any project must take into account the public good, water conservation efforts, and economic growth.

"•Any proposed project should adhere to local, state, and federal laws—including groundwater conservation district rules.

" •Projects should place an emphasis on developing and marketing water from replenishable sources."

The Rio Nuevo flap, and other water concerns prompted Lt. Governor David Dewhurst in November to name 11 senators to a Select Committee on Water Policy, despite the fact that it has just been four years since lawmakers completed a comprehensive overhaul of water laws. Dewhurst cited two main reasons for establishing the panel: the trend towards aggressive water marketing efforts in the private sector in Texas, and the fact that many senators are having second thoughts about Texas' nearly century-old rule of capture, which gives landowners the right to pump as much water beneath their land as they want regardless of how it may impact neighboring landowners.

Dewhurst indicated that the rule of capture is increasingly in conflict with the state's groundwater districts, which the Legislature has charged with regulating such things as pumping limits and well spacing within their boundaries. A major problem, with today's technologies and leasing activities, is that districts can't regulate wells that are outside their jurisdiction, even though the wells restrict availability of water within their boundaries. Districts also cannot prevent the export of groundwater outside their boundaries.

"As a longtime rancher myself, I've been supportive of the rule of capture," Dewhurst said. "But I'm sensing that agriculture is increasingly willing to look at it."

Sen. Ken Armbrister (D-Victoria) is chairman of the new committee, which is charged with the responsibility of issuing a report before the next regular legislative session convenes in January 2005. The committee will look at all dimensions of state water policy, including a review of the Edwards Aquifer Authority in San Antonio. According to Dewhurst, the Authority is having difficulty balancing the demands for water against permits by municipalities and farmers' needs without exceeding the state-mandated limit on pumping.

Dewhurst also named a subcommittee to focus solely on leasing water rights on state land. Sen. Frank Madla (D-San Antonio), will serve as chair. Dewhurst seemed to think the concept of leasing state lands and associated water rights is worth exploring, but advised moving forward with caution to protect the state's interest and the value of water for future generations.