Texas is growing. The population of Texas in 2010 was approximately 25 million. According to projections on the Texas Water Development Board (TWDB) website, the population is projected to grow to almost 34 million in 2030 and 42 million in 2050. The majority of this growth is projected to occur along the I-45 and I-35 lines between the Dallas-Ft. Worth Metroplex to the north and Austin/San Antonio and Houston to the south. The impact of this growth on water supplies will be huge. Also from the TWDB, Texas’ total water demand in 2010 was about 18 million acre feet. That demand is expected to grow to almost 20 million by 2030 and over 21 million by 2050. The majority of the increased demand for water is expected to come from municipal and manufacturing/industrial uses.

The two primary sources of water are surface water and ground water. Much of our groundwater supply is used to support agriculture and irrigation. The future demand for these needs is expected to hold fairly steady in the next 40 years. Based on data from the Texas Comptroller’s office, almost 80 percent of the groundwater captured in Texas in 2004 went to irrigation. Municipal use of groundwater was at 15 percent; the manufacturing sector used 2.4 percent. For surface water supplies, irrigation consumed approximately 30 percent, municipal used almost 40 percent, and manufacturing consumed 21 percent. Because most of our increased water demands are going to come from the municipal and manufacturing sectors, Texas needs to find a way to deliver additional capacity without adversely affecting other users, such as agricultural interests or the environment.

The drought of 2010-11 has certainly brought an increased focus to water needs in Texas. However, as government officials, real estate developers, and conservationists might tell you, the strains on Texas’ water supply were evident before the grip of the current drought. One major constraint for future growth and development is the availability of additional water supply. Water supplies in Texas in 2010 are about 17 million acre feet. That supply currently sits 1 million acre feet below demand. Where will Texas find the additional millions of acre feet supplies needed in the future to meet projected demand? The answer to that question is complicated and requires more words and research that this article can provide.

The increased demand on Texas’ existing water supply infrastructure, and the need to find additional sources of water to sustain growth, will create rising costs for water, which has historically been a cheap resource to acquire in comparison to other commodities. Increases in cost make new water development technologies attractive. For example, water desalination is an area Texas will likely expand in the future. According to the Houston Chronicle, Texas has a vast supply of brackish groundwater that is cheaper to desalinate than seawater. The current projection is that approximately 2.7 billion acre feet of brackish groundwater lies below Texas. As the cost for water increases, the production of potable water from this source will need to be developed.

Recently, at a site in New Braunfels, Land Commissioner Jerry Patterson called for investment in a new groundwater desalination plant that could produce up to 4.5 million gallons a day from brackish groundwater under that site. The cost for this development is initially projected between $40 and $100 million. These types of infrastructure investments will lead to the ability to serve areas of high population growth and demand for resources. Associated with water development projects are the collateral infrastructure projects needed to deliver and service the resources to the commercial development it spawns.

Desalination is not the answer, but a part of the overall answer to our water needs. According to the TWDB, current statewide funding requests are $27 billion from the TWDB and an additional $15.5 billion from the state. With this level of investment dollars requested, the potential impact on civil construction companies could be significant. Among the projects that may become available to construction companies are the construction of additional reservoirs, new treatment plants, the expansion of existing plants, and the associated infrastructure to deliver the supply and goods to end-users.

On the legal front, a decision from earlier this year by the Texas Supreme Court could also have an impact on the cost of water as a resource. In Edwards Aquifer Authority v. Day, the Supreme Court held that groundwater should be treated similarly to oil and gas with respect to property rights.

While groundwater has been subject to the Rule of Capture, now Texas landowners can claim groundwater-in-place as private property. The Rule of Capture basically means that groundwater can be captured for surface production by a landowner and no restrictions on the amount of water produced were valid so long as the capturing landowner was not malicious or willfully wasteful of the water captured, even if the capture deprived neighbors of use of that same groundwater. Having ownership of groundwater-in-place means that landowners above groundwater supplies can assert a claim to the resource even if they have not historically used the resource. Day stands for the proposition that a landowner cannot be deprived of private property – groundwater – by others or a governmental agency without compensation even if the landowner has never laid claim to that groundwater in the past.

After the Day case, landowners are still subject to regulation and permits of groundwater usage, but landowners applying for new permits for groundwater usage may now be able to receive compensation for regulatory takings if an agency or governmental authority restricts their use of groundwater. The Day case is a significant case in environmental law and may affect construction and real estate law. It may certainly affect the costs of groundwater as a resource that looks to be developed in the future to meet the water needs of our growing population.

–As seen in the August 2012 issue of Texas Contractor.