Ownership Of Texas Groundwater: What the Courts, the Legislature, and the Constitution Say

Who has ownership rights over the groundwater that lies beneath privately held land? In Texas, the law is clear: Applying the rule of capture, landowners in Texas have vested property rights in the groundwater extracted from their land. The “rule of capture” says that a landowner who first extracts or “captures” a natural resource from beneath his property has ownership over it. This rule applies to groundwater, oil, and gas, even if that resource moves from one property to another due to the extraction process.

The law recognizes some exceptions to the “rule of capture”. It cannot be done:

• for malicious intent against neighboring landowners;
• where the resource is not used for good purpose
• or to such extent that it negligently causes subsidence on the land of others

Historical background

Texas court cases addressing groundwater ownership date back to at least 1904. W. A. East sued the Houston & Texas Central Railway Co., alleging the Railway’s aggressive pumping of water from a well on their property had dried up a natural spring on East’s adjacent property. The Texas Supreme Court sided with the Railway saying that a landowner has the right to divert, consume, or cut off groundwater, without regard to neighboring properties. Their view was that groundwater was part of the soil and was thus a part of the landowner’s property like the soil.

The courts have used the “rule of capture” many times in oil and gas drilling cases. They have consistently ruled that a landowner has vested rights over oil or gas extracted from his property, without liability to adjacent property owners.

Legislative support for Texas groundwater law

The Texas Legislature addressed ownership of groundwater in three distinct ways:

• Chapter 36 of the Texas Water Code clearly states that landowners have ownership rights over the water they pump from their property.
• A 2003 amendment to eminent domain laws requires authorities to submit evidence on the value of groundwater rights for any property being considered for eminent domain.
• The Private Real Property Rights Preservation Act in 2007 specifically recognized groundwater as part of private real property.

Constitutional protections for landowner rights

Article XVI, Section 59 of the Texas Constitution gives the State the right to protect natural resources within the state. It gives the State the ability to regulate how landowners extract and use resources captured on their property. It does not remove other constitutional protections for the property owners.

One case, back in the 1940s, helped to define these protections. In that case, a group of mineral rights owners challenged the Texas Railroad Commission’s authority to regulate oil production levels from wells under their jurisdiction. The Commission had put rules into place to stop owners of certain wells from pumping oil at maximum capacity. The goal was to keep oil flowing to wells in surrounding areas that might be affected by maximum pumping on the wells that fell within the rules. The mineral rights owners sued saying the rules applied only to certain owners and not others.

The courts agreed with the mineral rights owners for specific reasons:

• The Commission could not discriminate against one set of owners over another.
• Each property owner has the right to a fair chance at capturing the resources available under their land.
• The Texas Constitution provided three specific protections for owners: taking property without adequate compensation, equal rights for all man, and no citizen should be deprived of property without due course of law.
• The U.S. Constitution’s Amendment 14 protects seizure of property without due course of law.

This case brought forward the legal argument that an agency of the state cannot make rules or issue orders that are “unreasonable, unjust, or discriminatory”. The Commission could not make different rules for different oil fields or different rules for different owners on the same oil field without solid justification.

This argument was central to the Edwards Aquifer Authority v. Day decision. The Aquifer Authority had put a rule in place that if a landowner had not drawn water from the Aquifer before May 31, 1993, the Authority would deny him a permit to do so today. The court decided that this rule deprived the landowner of the right to use the groundwater without just compensation and it discriminated between existing and new users.

Ongoing challenges

In 2003, the Texas Legislature empowered the Texas Water Development Board to create Groundwater Management Agencies (GMAs) throughout the state, each having the authority to set desired future conditions for a natural aquifer region.

The problem is that a GMA does not create or regulate the management plans for the many districts within its boundaries. Those districts, usually falling within political boundaries, each create their own plans and regulations. This sets up the situation where a property owner on one side of a political line is subject to different regulations than a neighboring property in an adjacent district, even though both are using the same aquifer.

This patchwork approach to regulation is already leading to more battles in court.

Help is available

The lawyers at Sprouse Shrader Smith are well-versed in groundwater law and rights. We work to protect our clients’ rights to groundwater ownership and help them deal with regulatory agencies for permitting and watering. We can represent you in court, in front of regulatory agencies, and even in front of the legislature if need be. We offer assistance in purchase/sale of water rights, ownership disputes, groundwater permitting and challenging desired future conditions. Contact us today to discuss your groundwater rights.