How is groundwater regulated in Texas?

In Texas, groundwater ownership rights are subject to regulation and control by both the courts and the state legislature.   Groundwater may either be managed individually by landowners under the “rule of capture” or collectively by landowners and groundwater conservation districts (“GCDs”).  

Under the “Rule of Capture,” landowners may pump as much water as they choose, without liability to surrounding landowners who might claim that the pumping is depleting their wells.  There are very few restrictions to the rule of capture.” 

The Texas Legislature has authorized the creation of GCDs as the State’s preferred method of groundwater management.  These districts are empowered and charged to conserve, preserve, protect, recharge, and prevent waste of groundwater resources within their boundaries.  GCDs may be created through a special legislative act, a landowner petition process to the TCEQ, a landowner petition process to join an existing GCD, or TCEQ initiative in a priority groundwater management area.  

It should be noted that section 36.117 of the Texas Water Code prohibits the issuance of a permit for the drilling of a water well used solely to supply water for a rig that is actively engaged in drilling or exploration operations for oil and gas.  

In addition, the RRC regulates groundwater in Texas.  According to the RRC, much of the water used in association with hydraulic fracturing activities is saline or brackish water produced from the same formations where the oil fields are located.  

A very small percentage of the water used for enhanced recovery is fresh water or slightly saline water produced from outside sources as needed to replace the volume of oil removed.  Saline or brackish water is drawn from underground reservoirs that are below the base of usable quality water.  The RRC requires a permit for wells associated with oil and gas activities that draw such water from formations below the base of usable quality water. 

Recently, the Texas Supreme Court held that landowners have an ownership interest in the water beneath their property that cannot be taken for public use without adequate compensation under the Texas Constitution.   Texas courts have long held that landowners have ownership in oil and gas beneath their property, and the court found no reason to treat groundwater differently.   Accordingly, under Texas law, landowners are regarded as having absolute title in severalty to the groundwater in place beneath their land.   The Court stated that “[t]he only qualification of that rule of ownership is that it must be considered in connection with the law of capture.”   Therefore, “a landowner has a right to exclude others from groundwater beneath his property, but one that cannot be used to prevent ordinary drainage.”   Moreover, landowners have a constitutionally compensable interest in groundwater.   On remand, the lower court must determine whether an agency’s denial of a landowner’s application for a drilling permit constitutes a taking under the facts of this case. 

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