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Groundwater Rights

 

Q: We submitted an application for a new production well to TCEQ in June, but due to various issues and requests for additional information, our request will be delayed until November.

Is TCEQ approval necessary for our contract well driller to drill a test well in the interim? I understand the need for TCEQ approval for a public water supply production well.

 

A: TCEQ does not require approval of test wells, except when a public water system (PWS) completes a test well that will become a PWS production well. In these situations, TCEQ recommends submitting the request for approval prior to drilling the test well so that scheduling of the driller does not have to occur twice. If a proper submittal is made around 60 days prior to the scheduled test hole drilling, chances are the review at TCEQ will be complete and the PWS will not have to lose the time with re-mobilization.

 

The real question is whether or not you and the engineer feel that this initial test hole will deliver the right quantity and quality of water. If so, then follow the submission and approval route I explained above. When the test well results are back, then the “final” well completion stages should continue without too much delay.

 

Published September/October 2014

 


Q: Our district owns land adjacent to a privately owned piece of property that we are concerned a future landowner may purchase to pump and sell water to a local city or other entity.  Can we buy the groundwater rights to that tract of land without buying the land itself?  We are concerned that a future landowner will capture our groundwater adjacent to where our own well currently is located.

 

A:  Yes, the district can buy the groundwater rights to property without buying the surface rights. The groundwater estate can be severed from the surface estate and conveyed by the owner just like minerals, e.g., oil and gas.  The severance would be handled as a real estate transaction as groundwater in place is a recognized property right in Texas. 

 

The common law related to groundwater estate severances is not as well established as the law regarding mineral rights.  Courts have held that the mineral owner is the “dominant estate,” entitled to use as much of the surface estate as reasonably necessary to be able to “enjoy” the rights of mineral ownership (including rights of access in, on and across the surface estate to explore, drill for and develop the minerals, and use of groundwater). 

 

This is not well established for groundwater estate severances, so it is very important that both your contract to purchase the groundwater rights, and the deed conveying the groundwater estate to the district provide clear and express easements and/or surface use rights to facilitate the drilling and exploration of the groundwater as well as its production and transport from the originating tract of land to the place of use. This severance would be included in a negotiated contract.  Due to the complicated nature of the transaction, it is important to hire an attorney to represent your interest in this type of deal.

 

Your negotiations should address what rights, if any, the landowner will retain to use any portion of the groundwater.  For example, will the landowner still be allowed to drill and operate a domestic well for personal use on the property, to grow crops or use for oil and gas production from the property?  It is also important to include specifically the right to impose sanitary control easements restricting the use of the surface within the 150 foot radius of the easement around the well head for any well you drill.  You may also want to restrict the use of the surface within a certain proximity of any district water wells,  including oil well drilling or fracking and other uses specified in 30 TAC Section 290.41.  The agreement should include provisions specifying the number and location(s) of the wells you intend to drill, including any test wells and/or monitor wells.  This would ensure your ability to drill wells on the property in the future even if you don’t anticipate utilizing those rights in this way at this time. Remember, however, that the more restrictions you place on the surface use, the greater the cost of the groundwater will likely be to the district.

 

In order to determine the value of these rights, I  recommend that you check with a real estate appraiser knowledgeable about groundwater valuation, as well as your local groundwater conservation district, if there is one in your area.  Remember that your ability to produce the groundwater you purchase will be limited by any new permit requirements and any pumping limitations the local groundwater district might impose. 

 

If your agreement to purchase groundwater is executed correctly and recorded in the county deed records, those groundwater rights will be perpetual, regardless of who owns the surface rights.

Added July 23, 2014

 


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