Texas cities are looking for more sources of water to meet the needs of growing urban populations. And exporting groundwater from rural areas to the city is one way to meet that need.
However, if large amounts of water are going to be exported from a region, third-party impacts need to be carefully considered, according to an agricultural economics professor at Texas A&M University. Third parties are non-participants in water exportation transactions, Lonnie Jones told more than 100 participants at the recent Landowner and Citizen Information on Groundwater Leasing, Marketing and Sales meeting at the San Antonio Botanical Garden Center.
Twelve speakers addressed groundwater sales, leases and exports; landowner rights; role of groundwater conservation districts; community and landowner impacts; and water transactions negotiations.
More than 80 percent of Texans live in urban areas, Jones said, and growth is expected to continue in and near cities. Rural, agricultural areas are expected to grow more slowly, so municipal and industrial interests will be the driving force behind water demand, he said.
Cities are going to look increasingly to rural areas to meet local demands. Because the value of selling water to municipal and industrial interests is estimated at between $500 and $800 per acre foot, and the value of irrigation water is from $30 to $50 per acre foot, landowners will have a strong incentive to sell and export water, Jones explained.
However, the sale and export of large amounts of water may have a negative impact on rural communities, he said.
For example, if a landowner sells his water and that land is taken out of production, he may not be affected negatively, but others could be, Jones said.
Those possibly impacted in the exporting regions include farm operators who lease land and their laborers; farm input supply firms; farm service firms and commodity processing firms; business and personal service firms and wholesale and retail firms; and schools; county and city governments and special taxing districts.
Make own claims
If third parties are left out of water transactions and feel they will be impacted negatively, they “will make their own claims about what these impacts are going to be,” he said.
“What happens is ‘you're going to buy my water, and I'm going to sell you water,’ and suddenly out of left field comes the people in my community who say, ‘We're not going to let you get rich at our expense,’ and they can sue. They may not be able to win that case, but they can tie you up (in court) for a long time.
“As a society, we need to consider the effects on everybody, not just the buyers and the sellers. But the other people involved, since water has such a public nature to it, also have the right to be considered.”
The city of San Antonio, for example, has been “really smart” about water transactions, Jones said.
“They pay a pretty good bonus to property owners, over and above what the water is worth to the farmers,” he said. “At the same time, the city has gone out and worked with rural communities, and they've worked with farmers to assist them in installing center pivot systems so they can irrigate almost the same amount of land they were irrigating before. So it's a matter of give and take.”
The benefits of big cities acquiring low-cost water from farmers are so great that many will try to assist rural communities in various ways, Jones said.
Groundwater water conservation districts assist rural communities by limiting exporting from their districts, limiting production in some cases, and charging fees.
“If those fees are plowed back into the community as economic development, that's the way to offset a loss to agriculture,” he said.
“I think the groundwater conservation districts are the best political jurisdiction for minimizing the impacts,” by instituting retraining programs, tax abatement or concessions to businesses that locate in a community, or assistance to dryland farmers.
Another speaker, Charles Gilleland, told participants third-party interests are one of three considerations in water transfers
Gilleland, research economist at the Real Estate Center, Mayes School of Business at Texas A&M, aid other considerations are direct effects and the compensation to the landowner for the transfers.
When landowners ask Gilleland's advice about compensation, they usually want him to give them one value for water.
Not that simple
“It's really not that simple,” he said.
The value includes the water and the infrastructure needed to move the water from one place to another. “Location is very important, and location is going to have a big impact on what your water is worth,” he explained.
“You might come and say the value of the water is whatever they sell it for in San Antonio or Houston, but minus whatever it costs to get it there, but we're going to take a different look at it and say it's worth whatever the market is going to pay for it.”
These experts spoke at the first in a series of three informational meetings on water issues. Other meetings will be held July 29 at Sul Ross State University in Alpine and Sept. 14 at Stephen F. Austin University in Nacogodoches.