Texas Groundwater Rights Summarized

Groundwater Rights in Texas Texas adheres to the "absolute ownership" rule, meaning landowners possess absolute ownership of the groundwater beneath their property. This right, established through common law and upheld by the Texas Supreme Court, allows landowners to produce unlimited groundwater for beneficial use without liability for impacts on neighboring properties, as long as no waste occurs. This right is subject to the "rule of capture," a principle stating that landowners are entitled to all groundwater they can capture from beneath their land, regardless of its effect on neighboring wells. However, the state also utilizes Groundwater Conservation Districts (GCDs) operating under Chapter 36 of the Texas Water Code to regulate groundwater use and implement conservation measures. Similar to mineral rights, groundwater rights can be severed from surface ownership. This severance can occur through various means, including direct conveyance, reservation in a surface estate deed, or leasing arrangements. GCDs regulate groundwater production within their jurisdiction. GCDs can impose limits on production, mandate permits for commercial use, and regulate transfers of groundwater outside their boundaries. All groundwater transactions within a GCD's jurisdiction must comply with their specific rules and regulations. Groundwater valuation in Texas is complex and lacks a standardized market price. The value is influenced by several factors including geographic location, water quality, production sustainability, regulatory environment, cost of extraction and transportation infrastructure, and intended use. There are three main types of groundwater transactions: Sale of Produced Groundwater: The landowner or lessee sells produced groundwater to a buyer at a defined delivery point, assuming all costs associated with production and delivery. Severance of Groundwater Rights: Groundwater rights are permanently separated from surface ownership through a deed, granting the new owner the right to produce and utilize the groundwater. Groundwater Leases: Groundwater leases grant a lessee the right to explore, develop, and produce groundwater for a defined period. Contact: Trey Wilson Attorney www.SanAntonioRealEstateLawyer.com 210-354-7600