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Sale and Leasing of Water Rights
For more than two decades, Bracewell & Giuliani has been an innovative leader in water management transactions and regulation throughout the state of Texas. Over the past five years we have acted as industry leaders assisting in the creation and exploration of water farms for over 100,000 acre feet of water. From our cutting edge work involving the regulated environment of the Edwards Aquifer in the five-county San Antonio region, we have developed groundwater management standards and practices that are increasingly being used statewide. Our work focuses on helping private industrial clients, such as privatized water supply companies, power plants with water supply needs, as well as land developers and municipal entities seeking to obtain needed water or to market a surplus water supply.
Groundwater Management. As state groundwater management districts have grown in both number and influence (which now number nearly 90 and encompass approximately half of the entire state), it did more than just change the traditional groundwater ownership structure for our state– it also gave birth to a new and untested water transactional market. Bracewell lawyers have consistently played a significant role in shaping the transactional documentation and procedures in this new groundwater market.
Today we remain at the forefront of water rights law in South Texas, symbolized by our co-sponsorship of the extremely popular Annual Conference on the Edwards Aquifer. Our regional work has expanded to a broader statewide groundwater practice.
Bracewell & Giuliani advises clients on transactions involving groundwater rights throughout the state of Texas. Our water rights experience includes negotiating and drafting documents for the purchase and sale of groundwater rights, the lease of groundwater rights, and even water development and water supply agreements that involve arbitrage and other complex transactional structures. Because the Texas groundwater management districts each have their own rules and regulations, our wide-ranging experience can be essential to help clients successfully complete sale or lease transactions.
Bracewell has also advised municipal entities on the acquisition or leasing of water rights. We have negotiated intergovernmental water supply agreements, as well as contracts with private companies, to supply groundwater to the City of San Antonio.
For years Bracewell lawyers have assisted clients with first-of-their-kind water transactions that no one else had previously done. We remain on the cutting edge new techniques in the marketplace, as these three examples show.
- Our lawyers are assisting several governmental entities in the San Antonio region in the development of an aquifer storage and recovery system. Focused on the Carrizo-Wilcox Aquifer some 20 miles from the strictly regulated Edwards Aquifer, it involves the construction of a pipeline to transmit and store unused Edwards water in Wilcox. The purchased Edwards water will even be differentiated from water already in Wilcox because it has a different PH content, thus allowing accurate records on water usage originating in each underground formation.
- The firm is involved in desalination projects involving groundwater. The water is too brackish to drink or use, but with our help a private landowner is acquiring the rights to purchase it, then to construct a desalination plant that will process it for potable applications.
- We advised a major electric utility on permitting and technical issues involved in the reuse of treated wastewater from the City of Waco for cooling purposes. Bracewell has extensive experience with such recycling and reuse programs, which provide significant water for industrial purposes without the need to secure water use rights. Treated wastewater can also be used to maintain golf courses and other non-agricultural applications.
The process of acquiring, marketing and delivering water involves a complex interplay of state water law (particularly the Texas Water Code) and federal environmental laws (such as the Clean Water Act and the Endangered Species Act) that may limit water rights. We regularly work with the staffs of the U.S. Environmental Protection Agency, the Bureau of Reclamation, the Army Corps of Engineers, as well as with the Texas Commission on Environmental Quality and a variety of local groundwater districts and water utilities, to resolve regulatory concerns and help our clients maintain, validate and perfect their water supply rights. Typical issues that our lawyers address include:
- Water resource development projects (including wastewater and sewer facilities), as well as coastal river and levee improvements.
- Permits for changing the authorized use of groundwater or surface water.
- Water quality concerns, particularly those involving permits for the discharge of wastewater or the recycling of non-potable “gray water.”
- Remediation of contaminated groundwater and surface water resources, including cleanup of MTBE (methyl tertiary-butyl ether) and other hazardous chemicals found at Superfund sites, as well as cleanup of contaminated river sediment.
Water Rights Advocacy
Through our strong public policy team in Austin, Bracewell & Giuliani has worked closely with all key legislative committees and regulatory agencies involved in water rights oversight. As the statewide water management infrastructure has evolved throughout the past decade to encompass local groundwater districts and river authorities, we have actively represented our clients’ interests before the House and Senate Natural Resources Committees, the Texas Commission on Environmental Quality, the Texas Railroad Commission, and other governmental authorities. We have the resources to secure for our clients the optimum flexibility in maintaining, acquiring and selling water rights, particularly in light of discussions regarding a possible comprehensive statewide water management plan.
- Helping a number of private sector clients secure and transfer permanent rights to groundwater in the regulated environment of the Edwards Aquifer, including water under property owned by the City of San Antonio.
- Negotiated and drafted, for the San Antonio Water System, water development and supply agreements for the purchase of 30,000 acre feet of water per year, as well as negotiating the development rights for certain water delivery and treatment facilities.
- Handled the $10 million acquisition of land in south Bexar County, Wilson County and Atascosa County for development of the San Antonio Water System's aquifer storage and recovery project.
- Acquired approximately 5,000 acres and all associated Edwards Aquifer water rights for a city water company in Texas, and acted on behalf of another city to market water to a private power plant hundreds of miles away.
- Negotiated a contract with a private company to supply San Antonio with 15,000 acre-feet of groundwater.
- Advised a major Texas city on all aspects of its water supply needs, including SB1 planning and long-term supply issues.