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Texas Districts Approve Water Project Permits

This summer, Culberson County Groundwater Conservation District (“Culberson County District”) and Middle Pecos Groundwater Conservation District (“Middle Pecos District”) each approved permits that will allow for the development and use of groundwater from basins in their respective jurisdictions. Groundwater conservation districts have been established in areas where groundwater use outpaces natural replenishment. They are charged with conserving, preserving, protecting, recharging, and preventing the waste of groundwater within their jurisdiction. The Culberson County District protects and manages water supplies in Culberson County, and the Middle Pecos District protects and manages water supplies in Pecos County.

The permit application approved by the Culberson County District will allow the export of 6,000 AF per year from the Permian formations underlying the Apache Mountain Range, including portions of the Capitan Reef Aquifer. The water would be used by the Agua Grande project, an oil drilling and production operation in the Delaware Basin. The water will be drawn from wells owned by DAHJUR, L.P. and Hughes Apache Ranch, LP. The permittees will only pump water in accordance with the district’s groundwater management plan, ensure that their extraction has no adverse impact on the Wild Horse Flat Aquifer, the Michigan Flat Aquifer, or the Lobo Flat Aquifer, and pay an export fee to the district.

The permit application was protested by local farmers, ranchers, residents, and environmentalists, and media reports suggest that they may file a lawsuit to stop the project.

Under the permit approved by the Middle Pecos District, Fort Stockton Holding (“FSH”), an entity owned by the family of noted oilman Clayton Williams, will pump and market 28,400 AF. The permit approval follows a long water fight between FSH and the district. In 2009, FSH filed a permit application to pump and export 47,418 AF. The Middle Pecos District denied the permit, and FSH filed a lawsuit arguing that the denial was arbitrary and capricious. The district argued that certain permit conditions rendered it defective. In 2015, the court ruled in favor of the district. The parties reached a settlement agreement in April 2017.

The settlement agreement was executed between and among the Middle Pecos District, FSH—along with Clayton Williams Farms and any affiliated individuals and business entities—and Republic Water of Texas. FSH agreed to submit a revised permit application reducing the volume to 28,400 AF per year, abstain from filing any permits to produce additional amounts for at least five years, include a permit condition that would restrict production based on aquifer-level triggers, meter and report the volume produced for agricultural use on FSH lands, and pay the Middle Pecos District an export fee. The Middle Pecos District agreed to approve the revised permit and to work with FSH to have governmental intervenors and protestants withdraw their appeal to the district court ruling and their objections to the permit. Other terms involve procedural conditions and efforts to oppose a sunset bill that would have removed the Middle Pecos District. Republic Water, which had previously reached a deal with FSH to market its water, agreed to withdraw its application and its appeal of the district court ruling, pay $404,990.54 for the Middle Pecos District’s court costs and attorneys’ fees, and to abstain from filing a permit to produce water from the Edwards–Trinity Aquifer on the same lands as FSH.

While a buyer for FSH’s water has not been announced, local reports suggest that the City of Odessa is the most likely candidate.

With these permits approved on the heels of the Vista Ridge Regional Supply Project that will pump water from the Carrizo and Simsboro aquifers in Burleson County for use in San Antonio, is Texas entering a new era of water supply development? (For background on the Vista Ridge project, see “Vista Ridge Regional Supply Project,” JOW February 2015 and “Will the Abengoa Financial Restructuring Impact the Vista Ridge Project?,” JOW January 2016).


Written by Marta L. Weismann