Blue Gold: Commoditize Groundwater and Use Correlative Management to Balance City, Farm, and Frac Water Use in Texas

Texas is increasingly dependent on groundwater supplies due to drought and rapid population and economic growth. The current groundwater law regime of absolute ownership and rule of capture is fundamentally unsustainable. Without reforms, Texas risks a California-style water supply crisis as soon as five to seven years from now. This would threaten millions of Texans’ physical wellbeing and economic livelihoods.

Texas oil and gas law offers a legal framework for a groundwater management system that can help avert future water supply crises. Texas courts already have more than 75 years’ of experience deciding oil and gas cases under a managed withdrawal system. Using correlative rights and rated withdrawals to manage groundwater would provide stronger incentives for conservation. It would even enable market pricing of water while it is still in the ground. This, in turn, would open the door to a range of market-based conservation options that both save water and unlock additional economic value.

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Citation:  “Blue Gold: Commoditize Groundwater and Use Correlative Management to Balance City, Farm, and Frac Water Use in Texas,” 55 Nat. Resources J. 441 (2015).

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