“The students concluded that the apparent shortage of groundwater is not a physical shortage.”
Groundwater regulation has been a constant source of contention in Texas due to confusion between what landowners believe is their property and what they actually own. This confusion seriously diminishes the development of the groundwater market, according to a recent study conducted by students at the Bush School of Government and Public Service at Texas A&M University and summarized in a recent issue of The Takeaway, an online publication of the Mosbacher Institute for Trade, Economics, and Public Policy.
The Bush School research team, which included nine students from the Master of Public Service and Administration program, was led by James Griffin, who holds the Bob Bullock Chair in Public Policy and Finance. The researchers found that Texans may believe they possess rights to water beneath their land; however, when they have attempted to capitalize by selling or leasing the rights, the regulatory capabilities of a patchwork of Groundwater Conservation Districts (GCDs) have often restricted or denied such transactions. The ensuing confusion over groundwater ownership has led to capital not being used or not going to its best use. The GCDs in effect severely limit the value of Texas groundwater and prevent a market economy from emerging and developing to its fullest potential.
While groundwater depletion is a concern in the Ogallala Aquifer in the Texas Panhandle and the Hueco-Mesilla Aquifer in far west Texas, the researchers maintain that the concerns are unfounded for the aquifers in the more populous parts of the state. Griffin stated, “The students concluded that the apparent shortage of groundwater is not a physical shortage; rather it is a regulation-induced shortage. Local Groundwater Conservation Districts act as Balkanized states, preferring to protect local resources.”
The team concluded that changing groundwater regulation in Texas would allow costs to reflect available supply and resources to move toward the best usage. At a minimum, they recommend that the Texas Legislature clarify groundwater property rights and prevent GCDs from regulating groundwater based on its intended use or final destination.