Below is the HillCo client report from the June 25 House Natural Resources Committee hearing

The committee met to consider the following interim charges:
Evaluate the availability, management, and development of groundwater in the state. Consider the economic, environmental, and social impacts of groundwater usage and production in the agricultural, municipal, and energy sectors. In particular, examine methods to facilitate further development of brackish groundwater resources and to improve the consistency and certainty of permitting by groundwater districts without undercutting reasonable regional and local regulation of groundwater.
Explore opportunities to encourage voluntary protection and stewardship of privately owned lands in support of the state's water supply and to protect environmental flow needs in Texas rivers. Examine methods in which state agencies, water rights holders, and non-governmental organizations can work together through programs like the Texas Farm and Ranch Lands Conservation Program and the Texas Water Trust.
Examine strategies to enhance the use of aquifer storage and recovery (ASR) projects, including a review of existing ASR facilities in Texas and elsewhere.
Russ Johnson, McGinnis, Lockridge & Kilgore

  • Discussed the Supreme Court Dade decision that groundwater was under the ownership of the landowner absolutely, similar to oil and gas
  • There were many arguments that this ruling would bring a tidal wave of takings claims but this did not happen; primarily because of many legal provisions that make it difficult to bring these cases
  • Most groundwater conservation districts (GCDs) have been in existence for less than 20 years and are not mature organizations; boards are not made up of issue experts and are limited by funding, etc.
  • Groundwater conservation districts had very little guidance in setting desired future conditions
    • Districts have decided what policies should be without a regard to science
  • Policies should be set based on how much water they expect to use in a given year
  • Discussed a groundwater project in the Lost Pines GCD, a permit was applied for in 2007 and no permit decision has been made; the permit process generated a protest from the local community and a hearing was held; landowners who were not a part of the protest sought party status which took a lot of time; permit application was reduced through a settlement; the company agreed to mitigate any financial impact of their production of the groundwater; the administrative law judge recommended a proposal for decision which is now before the Lost Pines District board; not hopeful that the board will take the viewpoint of the impartial judge
  • Local boards are being asked to authorize production of water in the face of many protests despite what the economic benefit to the region could be
  • In Oklahoma, the state handles permit requests and publishes a table of how much water is available and can be produced by each landowner
  • Texas has planned away its water resources; the planning process has put over 95% of the state’s water resources off limits
  • The committee should ask TWDB to prepare a chart that shows total storage of aquifers managed by each district as compared with modeled available groundwater (MAG)

Ed McCarthy, Jackson, Sjoberg, McCarthy & Townsend

  • Groundwater is currently not a component of the solution for the state water plan
  • 100 districts with 100 sets of rules is creating a problem that needs to be fixed; could apply the Railroad Committee system of approving permits; a state agency with that type of authority is needed; districts lack needed resources to make the decisions they need to make
  • The substantial evidence rule needs to be repealed
  • Taking authority away from the local districts will remove a lot of the issues with the current system
  • TWDB has done several studies that show the state has more than 5 billion acre feet of storage in freshwater aquifers and 2.7 billion in brackish water; currently using groundwater at a rate of 10 million acre feet per year
  • Rep. Doug Miller noted it is misleading to discuss the total availability of water storage; drawing down the level of the aquifer can impact springs and deprive people in the aquifer from having spring flow or being able to access water through drilling
    • Johnson noted the Edwards aquifer is unique and storage was required to be put off limits for development for many reasons unique to that aquifer; in East Texas spring flow does not provide primary access; many times drilling happens at a level that does not affect spring flow
  • Rep. Tracy King asked about the client wanting to mitigate the economic loss; how would they do it
    • A per acre foot allocation to the utility
  • Rep. Eddie Lucio asked about the Oklahoma process; what factors are used in determining available water
    • Johnson replied that he was unsure of all the factors; total storage, recoverable storage and effect on surface water resources are some of the factors

Greg Ellis, Attorney

  • There are numerous reasons for the size and shape of GCDs
  • Treating all aquifers the same would create very different surface results for each one; treating all parts of any individual aquifer the same would also bring different results
  • Need to find a way in the GCD process to treat all parties fairly
  • Standardizing substantive rules would be very difficult because areas need different protections for different situations
  • Takings claims are difficult because each one has completely different variables and impacts related to it
  • Need to determine if stored water is subject to the rule of capture; how should districts make that distinction

Ty Embry, Lloyd Gosselink

  • Groundwater districts are evolving for the better; they are becoming more able to tackle the issues in their regions; more information is becoming available to help them do their jobs
  • The groundwater management authority process needs to be allowed to work
  • Co-relative rights do not work for everyone or for all areas
  • GCDs and TDLR should be working more closely to address bad actors in drilling
  • Rep. Eric Johnson asked what percentage of the state’s groundwater is accessible by land that doesn’t fall within a groundwater district
    • 10-15%
  • Johnson asked what rules apply
    • Rules of capture

Roland Ruiz, General Manager, Edwards Aquifer Authority

  • Ready to collaborate as needed to bring the best science to the forefront of the groundwater discussion in the state
  • The Dade decision did not address whether a taking had occurred in that case
  • The court gave no specific direction toward the permitting system
  • The state has continued to effectively administer the permitting procedures after the Dade decision; the case led to some confusion though

Mike Turco, Harris-Galveston Subsidence District

  • Developing shallow resources where brackish waters exist can have an unintended consequence of subsidence
  • The district regulates groundwater based on total water demand
  • A big component of regulation is water conservation; implemented an education program to ensure conservation continues with new generations

Steve Kosub, Senior Water Resources Council, San Antonio Water System

  • Growth in the state is occurring almost exclusively away from the state’s water supplies
  • Supplies need to be developed to satisfy the basic needs of the population and to satisfy expected growth as well
  • There is a need for certainty and predictability in the groundwater permitting process
  • Excessive uncertainty will be reflected in higher interest rates and more restrictive lending practices which will translate to fewer water supplies and needlessly higher water rates for the public
  • Longer permit terms, new judicial review processes, processes to appeal future condition decisions are potential solutions
  • Chairman Allan Ritter noted he has been hearing from witnesses that the Dade decision has not done anything that will change the immediate landscape of water permitting
  • Miller asked if the decision will have an effect on the production cap set by the legislature
    • Yes, it could have a substantial effect by decreasing available resources to landowners

Billy Howe, Texas Farm Bureau

  • According to courts, the rule of capture allows a landowner the right to self-help if they believe their fair share is being infringed upon
  • Courts have determined that if a regulation does not preserve fair-share it is a taking
  • These principles are equally applicable to groundwater as to oil and gas
    • There is a difference in the sense of GCDs determining fair-share in the case of water
  • Next session the goal of Farm Bureau will be to ensure members’ property rights are being protected in water cases
  • Disagree that there is lots of uncertainty in water regulations

Dee Vaughan, Texas Corn Producers

  • Texas imports grain to supplement what is grown here and corn production uses a considerable portion of the agriculture water use in Texas
  • Irrigation has come a long way in 30 years; new methods and technology have allowed 40% more corn to be grown with 60% less water than 30 years ago
  • Local control allows for effective rules without burdening water users with red tape and bureaucracy
  • GCDs are carrying out their responsibilities well and are the best way to manage groundwater
  • One-size fits all rules should not be adopted for groundwater management

Jason Skaggs, Texas and Southwestern Cattle Raisers Association

  • The current system is not perfect or fast in most cases but it is working as intended for the most part
  • There is not a sense of chaos in the process around the state and there is not a long line of lawsuits
  • Decisions in these cases should be left at the local level and more bureaucracy should not be added to the system; most landowners around the state do not have the resources to litigate their cases

Dean Robbins, Texas Water Conservation Association

  • Discussed formation of the groundwater committee within the association

Brian Sledge, Texas Water Conservation Association Groundwater Committee

  • Have been working on designation of brackish production zones
  • GCDs are charged with regulating groundwater regardless of salinity levels
  • Trying to streamline the permitting process for brackish groundwater without undermining freshwater
  • Developed a process for a petitioner to request for GCDs to establish brackish groundwater zones; would have to demonstrate the desire to pump water and make it clear they will not have an impact on water quality or quantity in freshwater formations; once a zone is designated, a permit can be issued
  • Also looking at a way to make processes within GCDs and their rules more similar across the board; there is a need for individual processes but some parts could be homogenized

Hope Wells, San Antonio Waters System & Texas Water Conservation Association

  • Working on an automatic renewal concept that strikes a balance between districts having flexibility and permittees having more stability
    • Districts could automatically renew a permit as long as no significant change is being made by the permittee
    • Permits would remain in effect during the renewal process
  • Looking for consensus legislation regarding permitting for water used in fracking
  • Looking at issues related to the appeal of reasonableness of desired future conditions; the judicial process is not expressed in statute so there is uncertainty in that process
  • Chapter 16 of water code requires regional plans to be consistent with desired future conditions; Chapter 36 allows districts to permit above the MAG number to give them more flexibility; need to marry those two provisions
  • Miller asked about water transportation permitting; would it be similar to the wastewater discharge permitting process that goes through TCEQ and their automatic renewal
    • Yes

Stacey Steinbach, Texas Alliance of Groundwater Districts

  • A GCD database website is one of the big projects for the group currently; hope to have it up by next session
  • There is a need for legislation to address some of the challenges GCDs have
  • Supports reinstating TDLR’s water well driller apprenticeship program
  • Would like to see GCD disclosure legislation to inform property buyers they are buying property within a GCD and to inform the GCD of an ownership transfer
  • Would like to continue work to ensure disposal well processes are performing well

Kathy Turner Jones, Lone Star GCD

  • The GCD does not have permit limits for production from brackish formations
  • Brackish water should be used to relieve pressure on fresh water supplies
  • Need continued stability in groundwater management statutes from the legislature

C.E. Williams, Panhandle GCD

  • The district is primarily funded through tax and has export fee authority; budget is $1.62 million
  • The district probably has the largest municipal well field in Texas; primarily agriculture use in the district
  • Would like to encourage the use of brackish water instead of fresh water when possible

Kody Bessent, High Plains GCD

  • GCDs should be supported as the method for groundwater management and any step away from local control would be in the wrong direction
  • The GCD is managing groundwater production through permitting rules that take well spacing into account; updating those rules currently to take into account new allowable production rates, new recording and reporting options, etc.
  • Developing education and management programs to assist with conservation efforts
  • Rep. Lyle Larson asked about problems with 30 year permits
    • Williams replied that they started the program in 2004; have made some reductions to permits but not many
  • Larson noted the witness mentioned a 31 foot decline in saturated thickness in Robertson County
    • The decline has been mostly confined to their area

Greg Singleman, Gonzales County GCD

  • The Carrizo Wilcox aquifer has around 18,000 acre feet permitted above the MAG but actual production has not met that amount yet
  • There is no need to implement changes in the current groundwater permitting process
  • Proper location of brackish water facilities is important in order to reduce impact to fresh water formations
  • Railroad Commission should revisit oil and gas disposal well regulations in order to ensure brackish water with the ability to be processed into usable sources are not contaminated
  • In support of aquifer storage and recovery (ASR); would be in favor of establishing rules across the board between GCDs regarding ASR

Joe Cooper, Lost Pines GCD

  • Shouldn’t have any problems meeting current desired future conditions
  • The district does not have co-relative rights
  • Do not view exporting permits any differently than other permits
  • Drilling 15 new non-exempt wells per month; the increase is driven by the drought and the recent Bastrop fire
  • Would like the legislative process to stabilize and let the desired future condition process work
  • ASR is not part of the picture right now for Lost Pines GCD but it likely will be in the future
  • District rules do not make any separate concessions between fresh water and brackish water

Mike McGuire, Rolling Plains GCD

  • District manages the two largest pods of the Seymour aquifer
  • District is funded through ad valorem taxes and can assess an export fee
  • Pumping limit of 3 acre feet per acre per year has been established
  • No permits for export of water from the district are issued for any given period of time
  • There is likely no feasible locations in the district where ASR would work
  • A critical habitat designation, if activated, would prohibit much activity in the area

John Dupnik, Barton Springs Edwards Aquifer GCD

  • There is plenty of evidence to show GCDs are not a barrier to brackish water production
  • GCDs are the preferred method for management of groundwater in Texas
  • An investment in science and data collection is needed to help GCDs and project developers make informed decisions
  • There should be no long term process created that forms a distinction between brackish and fresh water

Dirk Aaron, Clearwater GCD

  • Management of the GCD has not changed since the Dade decision
  • Permits are renewed annually
  • Require permittees to report monthly; exceptions are made for agricultural use
  • Manage a database system across the district
  • Spending money to develop a 3D model of cross sections to better understand problems within the water formations
  • Do not permit separately for ASR
  • Rep. Bill Callegari asked what the breakdown of water usage is
    • Ag is the smallest group, most farmers have junior water rights out of the river; municipal is over 90% of permitted wells

Robert Mace, Texas Water Development Board

  • MAG numbers are about 500,000 acre feet less than what is used in the current state water plan
  • The next water plan will be required to use desired future conditions
  • 26 of 31 groundwater models for the state have been completed; the rest should be done within four years
  • Have been evaluating brackish water resources; will be focusing resources on areas with brackish projects coming up and areas with drought concerns
  • Larson asked how much was appropriated for data collection in the brackish formations
    • 4 FTEs are allocated to mapping those formations; could take anywhere from 16-20 years to map
  • Larson asked what is the state’s role in studying ASR potential
    • Do not have resources focused on ASR
  • Larson asked if the oil and gas industry is furnishing good information
    • The industry provides both good and dated information; need them to be collecting data shallow enough down the hole to collect information relevant to the studies
  • Ritter asked how much money was appropriated for modeling groundwater
    • Have paid $14 million in contracts for modeling groundwater over the last few years; there was a rider that funded some brackish studies which allowed for 4 additional FTEs; around $550,000 per year

Bill Hutchison, Independent Groundwater Consultant

  • When a well is pumped water level goes down, streams lose flow or some streams begin acting as recharge sites
  • ASR does not work like a piston where water levels increase near the pump site; mixing occurs and different types of water are combined together
  • Groundwater management includes balancing policy and science to regulate production
  • A one-size fits all policy should not be implemented in the state for groundwater management
  • Improvements and updates in data need to be made now that desired future conditions and MAGs are involved in policy

Doug Wierman, Environmental Resources Management

  • Discussed Blanco Creek and Onion Creek and noted the differences between the creeks; all stream flows and aquifers are different and are affected by pumping differently

Darren Thompson, San Antonio Water System

  • ASR facility came on line in 2004; doubled the size of the project in 2009
  • The destination aquifer is the Carrizo aquifer
  • Cost of the project is roughly $250 million
  • If the water is injected and recovered within a short period of time, treatment is not required; if there is a greater period of time, some treatment has been necessary
  • ASR has provided SAWS an opportunity to optimize water supply moving forward reducing water supplies needed from the Edwards aquifer

James Dwyer, CH2M Hill

  • Surface reservoirs see 1-5 feet per year of evaporation
  • It takes much longer now to create a new reservoir than it did in the past
  • Corpus Christi created an ASR district in 2005 but has no active wells
  • Injected and existing water quality, mineral content and water movement patterns are all taken into account when considering prime locations for ASR
  • The requirement that water needs to meet drinking water requirements to be pumped into an aquifer is a hindrance to large scale implementation of ASR; that is a federal requirement in the federal drinking water act

Norman Johns, National Wildlife Federation

  • The federation endorses the use of ASR
  • The main reason for endorsement is the potential to alleviate evaporation
  • The compatibility of the injected water needs to be tested against the aquifer water before deciding on an injection location
  • If surface water is the supply source, effects of taking that surface water away need to be considered
  • ASR has a high energy requirement as well

Andrew Sansom, Meadows Center

  • Protection of watersheds and recharge areas around the state is extremely important
  • Virtually all of these areas are on private properties
    • The landscape is better because of this
  • Private landowners can be worked with to find ways to keep them on their property as good stewards of the land

Laura Huffman, Nature Conservancy

  • Aquifer protection programs have been in place for many years now; land is protected in order to protect the aquifer beneath
  • Many food and beverage companies have been very good at creating conservation easements because of their reliance on the water supply

Matt Nelson, TWDB

  • In 1993 Texas Water Bank was established to facilitate transfer, sale and lease of water and water rights in Texas; subsequently the Texas Water Trust was established
  • Incentives to deposit water rights in the trust include not having to pay fees for watermasters and other fees
  • There have been 2 deposits into the water trust; 1,200 acre feet and 33,000 acre feet
  • Deposits in the trust can be deposited for a term or in perpetuity; both deposits were made in perpetuity

Allan McWilliams, Texas General Land Office

  • The Texas Farm and Ranch Lands Conservation program seeks to facilitate the purchase of agricultural conservation easements by giving cash incentives to landowners
  • Easements protect ag lands from fragmentation in the pressures of development
  • Projects can only be in the 18 coastal counties
  • 6,385 acres are either under an easement or in the process of being placed under an easement in the program

Blair Fitzsimmons, Texas Agricultural Land Trust

  • Texas has 29 land trusts which collectively hold conservation easements on over one million acres
  • The GLO program offers a solution to the problem of fragmentation in rural lands
  • Land conservation does not work well through the current funding strategy; a land conservation project is difficult to set up through HB 4
    • May be good to address that in future legislation
  • Land conservation is a low cost strategy

Ernest Cook, Trust for Public Land

  • The idea of committing public funding for land conservation is popular in Texas

Jim Lester, Houston Advanced Research Center

  • Land management and water supply must still be considered once land is subdivided and turned into suburbia
  • There need to be more protected aquifer recharge zones; many recharge zones are being covered by impermeable surfaces

Myron Hess, National Wildlife Federation

  • The Texas Water Trust can work better than it currently does
  • The existence of the trust should be publicized to try to urge water right owners to donate to the trust

Larry Johnson, Miller Coors

  • Miller Coors implements many water conservation programs
  • Send back an average of 62% of the water purchased from the city
  • Have saved over 1.1 billion gallons of water through ag practices and other efficiencies