Chapter 9. Long term abstraction limits to conserve groundwater in Texas1

This chapter examines how groundwater conservation districts in Texas have had a positive impact on the level of groundwater depletion. However, efforts by authorities to limit groundwater pumping have given rise to conflicts with private property claims in some cases. The case also discusses the “50/50” conservation scheme in the Texas Panhandle, which provides a good example of concerted and rigorous long term planning to explicitly account for intertemporal allocation and provide an incentive for farmers to adopt water conservation practices.

  

The depletion of the Ogallala Aquifer in Texas has severe implications for the state economy. The Ogallala Aquifer, the largest freshwater aquifer in the U.S., has been subject to depletion in some areas of Texas for over a half century. Since the 1950s, the Ogallala Aquifer in Texas has been pumped approximately six times the estimated rate of recharge to the aquifer (Mace, 2016). The consequent decline in groundwater levels and saturated thickness constitutes a severe threat to the sustainability of irrigated agriculture in Texas, and hence to the local economy (Mace, 2016). Sixty percent of Texas’ water supply comes from groundwater, and 40% of the state’s total supply is withdrawn from the Ogallala Aquifer (Foster, 2009). The agricultural sector in the Southern High Plains region of Texas fully depends on water for irrigation from the Ogallala Aquifer. The state-wide economic value directly derived from irrigated agriculture in Texas was USD 4.7 billion in 2007 (TWRI, 2012). The economic impact of converting all irrigated acres in the Texas High Plains to non‐irrigated dryland farming would constitute an annual net loss of USD 1.6 billion of gross output, USD 616 million of value added and close to 7 300 jobs (TWRI, 2012). Furthermore, groundwater depletion in Texas has resulted in subsidence and brackish intrusion (Foster, 2009).

Groundwater conservation districts as a means to control pumping

In the US, groundwater quality is managed by federal agencies, while the states are responsible for groundwater quantity policies (Foster, 2009). The Texas Supreme Court established the rule of capture as a state-wide principle for groundwater allocation in 1904, allowing landowners to pump unlimited amounts of groundwater underlying their own property for beneficial use (Johnson et al., 2009). The principle has gradually been modified over the years. In 1949, a legislative session authorised the implementation of groundwater conservation districts (GCDs) (Lesikar et al., n.d.). The GCDs have the responsibility, and the right, to protect, preserve and conserve groundwater resources through necessary regulation (Weinheimer et al., 2012). As of 2016, there are 98 confirmed GCDs state-wide. Sixty-one of the GCDs cover single counties, and 37 cover more than one county. A total of 177 out of 254 counties are either fully or partially within a GCD (TWDB, n.d.a).

In 1997, Texas legislature recognised GCDs as the preferred institution for groundwater management, and gave them the authority to manage groundwater through restrictive rules, and to develop and adapt management plans. A 2002 bill authorised the introduction of new policy tools to reduce groundwater withdrawal, and established 16 groundwater management areas for planning and co-ordination of management plans across GCDs (TWDB, n.d.b; Mace et al., 2006). Since 2005, the GCDs have been obliged to develop and present quantified desired future conditions (DFCs) of relevant aquifers to the Texas Water Development Board (TWDB) (Johnson et al., 2009). The DFCs are based on local decisions made by GCDs, typically aided by technical studies. TWDB incorporates the DFCs into a groundwater model to develop a withdrawal amount that the districts can include as a consideration for permitting purposes (TWDB, 2016).

Every five years, the GCDs submit groundwater management plans to TWDB for approval. The plans have to consider relevant management goals, and establish performance standards and measures allowing for the goals to be reached. Further, the plans must include proposed rules and estimates regarding the available groundwater in the district based on the DFCs, annual groundwater abstraction volumes, annual recharge from precipitation, annual discharge from groundwater to springs and surface water, annual exchange of groundwater between aquifers in the district and within each aquifer between districts, projected surface water supply, and projected total water supply and demand according to the most recent state water plan (TWDB, 2016). Key regulatory tools used by the GCDs include well permitting, spacing and tract size requirements, restrictions on out-of-district transfers and withdrawal limitations. Some districts rely on information and behavioural change campaigns rather than regulatory tools. Abstraction charges are also allowed by the Texan legislation, but as of 2009, these have not been used by any of the Texas High Plain GCDs (Foster, 2009; Johnson and Ellis, 2013).

GCDs have a positive impact on depletion, but can give rise to conflicts

Studies show that the GCDs have an overall positive impact on the levels of groundwater depletion in Texas. The groundwater users in GCDs are obliged to consider trade-offs between the present and the future and evidence suggests that considering the temporal allocation of groundwater resources has had a positive overall impact by slowing the rate of groundwater depletion. Many of the areas that are not covered by GCDs are subject to open access problems and experience increased groundwater depletion as a result (Foster, 2009). TWDB reports that on a state-level, most groundwater users generally work within the framework of the management plans and rules of the GCDs. However, in parts of the state, there are tensions between protecting private property rights and the legislative mandate for districts to preserve the resource though pumping limits and well spacing requirements. There is historical and ongoing litigation on these issues, and most observers agree that court cases on the subject will continue (TWDB, 2016). An often cited case is that of Edwards Aquifer Authority (EAA) vs. Day, which came to an end in 2012 (Box 9.1).

Box 9.1. Legal battle over groundwater in Texas: The Day Case

Mr. Day and Mr. McDaniel (jointly referred to as “Day”) owned a piece of land within the Edwards Aquifer Authority (EAA)’s jurisdiction, beneath which a groundwater source flowed under artesian pressure. The previous owner of Day’s land had abstracted groundwater for irrigation, both directly from the well and from an impoundment on a creek within the property to which the artesian flow had been directed by a ditch constructed by the landowner. The Edwards Aquifer Authority Act assured landowners who had used groundwater historically for irrigation purposes a minimum permit amount of two acre-feet of production per year per acre irrigated. Thus, on the basis of the historical use of the previous landowner, Day requested a permit to irrigate 700 acre-feet of land with water from the well and the impoundment. The EAA granted Day a permit for 14 acre-feet of groundwater for irrigation withdrawn directly from the well, but denied the request for a larger permit amount, claiming that the water abstracted from the impoundment was surface water, thus owned by the state, and did not constitute historical use of groundwater from the Edwards Aquifer (John and Ellis, 2013; Kulander, 2015).

Day claimed that the denial of the permit request represented a constitutional taking of property. Thus, he appealed to the state District Court, alleging error by the EAA and seeking damages for condemnation of his groundwater rights. In response, the EAA sued the state, insisting that the state should be liable in the event that the Court found that there was a taking. The District Court ruled for the EAA and granted a take-nothing summary judgment on all of Day’s constitutional claims. However, the Court of Appeals reversed the summary judgment and ordered a remand for further proceedings. Subsequently, the case was taken to Supreme Court, which confirmed the ruling of the Court of Appeals, and recognised landowners’ property interest in groundwater in place beneath their land, similar to a landowners’ vested property right to oil and gas. The court also established that landowners have the right to be compensated for their interest in groundwater, enabling the plaintiffs to proceed on their takings claim (John and Ellis, 2013; Kulander, 2015; Wilder, 2013).

The Day case gave impetus to a number of other takings claims where landowners have required compensation from GCDs, based on the impact of pumping regulations on their investment-backed expectations. Critics are worried that the court’s ruling in the Day case will have negative implications for groundwater conservation in Texas, as the GCDs now have to take into account the economic impact on landowners when defining DFCs, in order to avoid costly compensation demands (Wilder, 2013). For example, this is likely to impact the GCDs’ position with regard to the use of groundwater for oil and gas operations, such as hydraulic fracturing (“fracking”). Until 2011, hydrocarbon exploration and drilling activities, including fracking, were exempted from permit requirements for groundwater use in Texas. However, the severe 2011-12 drought led a number of GCDs to seek to regulate or prevent the use of groundwater for oil and gas operations. The Day case nonetheless made them reluctant to do so, as they became aware that denial of permits is likely to lead landowners to file litigation seeking compensation (Kulander, 2015; Johnson and Ellis, 2013).

Source: John and Ellis, 2013; Kulander, 2015; Wilder, 2013.

A long-term, flexible approach to limit groundwater abstraction

The GCD in the Panhandle, located in the north of Texas, provides a compelling example of how GCDs can succeed in lowering the volumes of groundwater abstraction. Nearly all (95%) of the groundwater withdrawn in Panhandle is used for irrigation (Johnson et al., 2009). In 1998, the Panhandle GCD introduced a “50/50” management policy, which is a water pumping quota scheme (Weinheimer et al., 2012). The policy was based on a DFC of ensuring that at least 50% of the initial water supply, and saturated thickness, would still be available 50 years later. Limitations for withdrawal were set accordingly. Panhandle GCD chose to start out setting the annual quota to 1.25% of the initial saturated thickness, and to recalculate the quota every five years, based on the evolution of the level of depletion in the aquifer, which is measured in specific wells. The intention was that conservation of groundwater through the 50/50 scheme would allow for a gradual transition from irrigated to dryland cropland in Panhandle (Johnson et al., 2009).

In order to monitor compliance with the 50/50 scheme, the Panhandle GCD adopted procedures to identify study areas where groundwater declines are believed to exceed the annual decline rate set to be consistent with the 50/50 management goal. In the designated study areas, water level data and groundwater production data are evaluated.  This evaluation may lead to the establishment of conservation areas where additional metering of groundwater production and possible production limits will be enforced. Despite district rules allowing for the use of financial penalties in case of violation of production limits, the Panhandle GCD has relied on irrigators’ voluntary compliance to date.

The groundwater quota scheme has divergent impacts across the district

Evidence shows that the 50/50 policy in the Panhandle GCD has had largely divergent impacts across the district with regards to adoption of conservation practices. The quotas imposed by the scheme, which are even across the district, represent a much bolder ambition for farmers in areas with low initial saturated thickness and high water withdrawal patterns. Hence, these farmers have been obliged to change their farming practices to a larger extent than those with a low withdrawal pattern and initial high saturated thickness underlying their farm (Johnson et al., 2009). In fact, in certain areas in the Panhandle GCD the saturated thickness was projected to be as high as 80% of the initial level after 50 years, meaning that the ambition to conserve 50% of it imposed no actual restriction on farmers in these areas (Weinheimer et al., 2012). In order to be effective even in areas with high initial saturated thickness and to keep all farmers equally responsible for conservation efforts, the policy would have to be adapted to the spatial variations in water withdrawal patterns and heterogeneity in the aquifer (Johnson et al., 2009; Weinheimer et al., 2012).

The divergence in saturated thickness and withdrawal patterns also impact the extent to which farm production and income are affected by the 50/50 policy. Overall farm production in the Panhandle has not been substantially affected by the policy, neither has the overall economy of the district. Nevertheless, farm production has been slightly reduced in areas where the saturated thickness drawdown levels were initially particularly low. Likewise, the farmers in areas with low saturated thickness and high withdrawals are to some extent negatively affected. However, these farmers are very few, and their economic viability has only been slightly altered (Weinheimer et al., 2012).

The adjustable quota scheme offers several advantages

Instead of adjusting the quotas under the 50/50 scheme every five years, the Panhandle GCD could have opted for a model where the annual quota is fixed to 1% of the initial saturated thickness. This would guarantee that water withdrawal would not exceed 50% during the 50 years planning horizon. However, the adjustable quota scheme employed in Panhandle offers several advantages. For example, it allowed for more water use in the early years (1.25%), as compared to a fixed quota scheme (1%). It may seem counter-intuitive to opt for a model that accepts a comparatively higher annual decline in saturated thickness; however, the adjustable quota scheme is likely to turn out more beneficial over time, as it provides incentives for conservation early on and allows for enhanced flexibility over the long term. The adjustable scheme rewards conservation efforts over time by revisiting the quotas every five years. As farmers are aware that quotas are adjusted periodically, they have an incentive to adjust their practices to conserve water in an earlier period, so that this water will be available to them later. Conversely, farmers under a fixed quota scheme know that the quota will remain constant over the fifty years of the policy scheme, no matter if they adopt conservation behaviour or not. Thus, the farmer has no clear incentive to reduce abstraction levels (Johnson et al., 2009). Moreover, the flexibility integrated in the Panhandle scheme allows for readjustment of quotas according to the development of demand and of the aquifer, in cases where this differs from original assumptions (Mittelstet et al., 2011).

A simulated comparison study of the 50/50 policy and a 50 years abstraction charge scheme concluded that the 50/50 scheme is more successful in terms of conserving a larger quantity of water, hence maintaining a bigger part of the saturated thickness. Further, it leads to a greater decline in the irrigated area, thus making it a more effective groundwater conservation tool. Nevertheless, it comes with higher costs for the regional economy, as the reduction in irrigated area leads to a decline in economic activity for input purchases and reduced levels of gross revenues from the agricultural sector. In contrast, since legislation allows for abstraction charges to be set quite low, a charge would have minimal impact on demand and function primarily as a revenue raising instrument for the GCDs. For farmers, an abstraction charge would represents an additional (small) cost applying to every unit of abstracted water, reducing the net income of the farmer. However, as farmers would maintin the size of their irrigated area and level of production, this would not negatively affect the regional economy. If an abstraction charge were set at a higher level, the impact of this instrument could change, depending on the price-elasticity of water demand (Johnson et al., 2009).

Lessons learned

The gradual strengthening of GCDs’ responsibility to conserve groundwater resources in Texas has proved to have a positive impact on levels of groundwater depletion. Through the development of DFCs and pumping permits, the GCDs provide long-term exploitation strategies (see Health Check #11, Part I). The GCDs provide important mechanisms for allocation of groundwater resources and are accountable for the overall groundwater management (see Health Check #1, Part I). Nonetheless, the GCDs have given rise to conflicts between private property rights and groundwater conservation, making GCDs more reluctant to limit pumping permits in cases where this may result in costly litigation. The Day case illustrates how a complex legal context can pose challenges for groundwater management (Health Check #2, Part I).

The example of the Panhandle GCD allows for a comparison of different approaches for temporal allocation of scarce groundwater resources. Compared to alternative approaches, the 50/50 scheme in Panhandle appears to be a highly flexible conservation tool, providing an incentive for farmers to adopt water conservation practices over time. The scheme constitutes an effective short- and long-term abstraction limit (a cap) (see Health Check #4, Part I). The scheme also entails clear systems for monitoring of compliance with the conservation policy, as well as provides sanctioning systems, although only used to a limited extent (see Health Check #8, Part I). However, the magnitude of the impact of the scheme on farmers varies considerably across within the district, due to heterogeneity in aquifer characteristics and consumption patterns. The economic impact of the policy reflects the same trend; certain farmers are hit harder than others. As a consequence of the relative success of the 50/50 scheme in Panhandle, similar policies have been adopted in several other GCDs of the Southern Ogallala Aquifer.

References

Foster, J. (2009), “Do Texas groundwater districts matter?”, Water Policy, Vol. 11, pp. 379-399, https://doi.org/10.2166/wp.2009.015.

Johnson, J. et al. (2009), “Water conservation policy alternatives for the Ogallala Aquifer in Texas”, Water Policy, Vol. 11 (5), pp. 537-552, https://doi.org/10.2166/wp.2009.202.

Johnson, R. and G. Ellis (2013), “A new day? Two interpretations of the Texas Supreme Court’s ruling in Edwards Aquifer Authority v. Day and McDaniel”, Texas Water Journal, vol. 4/1, pp. 35-54.

Kulander, C. (2015), “Edwards Aquifer Authority V. Day and Bragg – Predictions on their effects for regulatory takings claims for groundwater used in oil and gas operations”, Baylor Law Review, vol. 66/3, pp. 472-528.

Lesikar, B. et al. (n.d.), “Questions about Groundwater Conservation Districts in Texas”, Texas Cooperative Extension, http://twri.tamu.edu/reports/2002/2002-036/2002-036_questions-dist.pdf (accessed 3 August 2016).

Mace, R. (2016), “So secret, occult, and concealed: An overview of groundwater management in Texas”, Conference paper, https://www.twdb.texas.gov/groundwater/docs/2016_Mace_OverviewGroundwater Management.pdf (accessed 19 June 2017).

Mace. R. et al. (2006), “A streetcar named desired future conditions: The new groundwater availability for Texas”, State Bar of Texas. 7th Annual The Changing Face of Water Rights in Texas, May 18-19, www.twdb.texas.gov/groundwater/docs/Streetcar.pdf, (accessed 19 June 2017).

Mittelstet, A., M. Smolen, G. Fox and D. Adams (2011), “Comparison of aquifer sustainability under groundwater administrations in Oklahoma and Texas”, Journal of the American Water Resources Association, 47(2), pp. 424-431, https://doi.org/10.1111/j.1752-1688.2011.00524.x.

Texas Water development Board (TWDB) (2016), Personal correspondance with Media Relations Specialist, Kimberly Leggett, Director of Groundwater, Larry French, and Manager of Groundwater Technical Assistance, Rima Petrossian.

Texas Water Development Board (TWDB) (n.d.a.), “Groundwater conservation district facts”, www.twdb. texas.gov/groundwater/conservation_districts/facts.asp (accessed 4 August 2016).

Texas Water Development Board (TWDB) (n.d.b), “Groundwater Management Areas”, www.twdb.texas. gov/groundwater/management_areas/ (accessed 4 August 2016).

Texas Water Resources Institute (TWRI) (2012), “Status and trends of irrigated agriculture in Texas”, http://twri.tamu.edu/docs/education/2012/em115.pdf (accessed 4 August 2016).

Weinheimer, J. et al. (2012), “Economic impact of groundwater management standards in the Panhandle Groundwater Management District of Texas: Final report”, www.twdb.texas.gov/publications/reports/contracted_reports/doc/0903580958_Panhandle.pdf (accessed 12 August 2016).

Wilder, F. (2013), “Come and take it: Court ruling dares regulators to limit pumping”, Observer, www.texasobserver.org/texas-court-upholds-takings-claim-landmark-water-case/

Note

← 1. This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.