WATER AVAILABILITY MODELING – RECENT DEVELOPMENTS AND LEGAL CONSIDERATIONS

LEONARD H. DOUGAL Jackson Walker L.L.P. 100 Congress Avenue, Suite 1100 Austin, Texas 78701 (512) 236-2000

State Bar of Texas THE CHANGING FACE OF WATER RIGHTS IN TEXAS February 26-27, 2004 San Antonio CHAPTER 15.1

LEONARD H. DOUGAL Jackson Walker L.L.P. 100 Congress Avenue, Suite 1100 Austin, Texas 78701 Telephone: (512) 236-2000 Facsimile: (512) 236-2002 [email protected] EDUCATION J.D., with Honors, The University of Texas. B.S. Chemical Engineering, with Honors, The University of Texas PROFESSIONAL EXPERIENCE Partner, Jackson Walker L.L.P. Attorney, Small, Craig & Werkenthin, P.C. Reservoir Engineer, Exxon Company, U.S.A. LICENSES Board Certified in Administrative Law – Texas Board of Legal Specialization State Bar of Texas, Member United States District Court for the Western District of Texas, Admitted United States Court of Appeals for the Fifth Circuit, Admitted Licensed Professional Engineer, Texas PROFESSIONAL ACTIVITIES Past Chairman (1999-2000) of the Central Texas Chapter of the Air & Waste Management Association Past Member of the Board of Directors (1999-2003), Clean Air Force of Central Texas Past Chair (1997-1998) Health, Safety and Environment Committee, Greater Austin Chamber of Commerce Member of the Texas Society of Professional Engineers (State Director, 1994-1996) Member, Environmental and Natural Resources Section, State Bar Member, Travis County Bar Association (Administrative Law Section) Volunteer, Volunteer Legal Services of Central Texas RECENT PUBLICATIONS, ARTICLES AND PRESENTATIONS Superfund and Environmental Liability presented to the University of Texas, Graduate School of Business Class on Managing and Financing Environmental Liability Risks Current Issues Concerning the Implementation of Senate Bill 1 presented to the 34th Annual Meeting, Texas Section - American Society of Agricultural Engineers, San Marcos Texas Retail Water Supply and the Regulation of Water Utilities presented to CLE International Texas Water Law, October 23-24, 2000, Austin, Texas Property and Regulatory Issues Affecting Cattle Raisers, presented to the Texas & Southwestern Cattle Raisers Association - Annual Meeting March 25, 2001; Legal Update Seminar, Austin. Common Issues and Problems Involving Utility Easements and Rights-of-Way; presented to the Texas Rural Water Association - 32nd Annual Convention - March 29, 2001, Austin An Overview of Non-standard Service to Developments and Subdivisions; Fifth Annual Texas Rural Water Association Office Professionals Conference, June 12, 2001, San Antonio, Texas Moderator of Panel Discussion regarding the Regionalization of Municipal CCNs, CLE International Texas Water Law Conference, October 16, 2001, Austin, Texas Brownfields Revitalization – Sweeping Amendments to CERCLA, presented to Texas Society of Professional Engineers’ Region III Seminar, April 26, 2002, Austin, Texas. Author: Court Reiterates that Customer Charges Must be Consistent with Utility Ta riff, Texas Rural Water Association, published in Quality on Tap, January/February 2003 Co-Author: Chapter 28 (Agriculture) Pocket Part Update 2003, Texas Practice – Environmental Law, August 2003 Selected Texas Water Quality and TPDES Permit Issues presented to CLE International 13th Annual Conference Texas Water Law, October 2-3, 2003, Austin, Texas

Water Availability Modeling – Recent Developments and Legal Considerations

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TABLE OF CONTENTS I.

INTRODUCTION....................................................................................................................................... 1

II.

SURFACE WATER AVAILABILITY MODELS ......................................................................................... 1 A. The Current WAM Model..................................................................................................................... 1 B. WAM Status and Output ....................................................................................................................... 2 C. Water Availability Requirements for Surface Water Rights Permitting ..................................................... 3 D. Practical Issues Related to Surface Water Availability Modeling ............................................................. 4 E. Reported Decisions Involving Surface Water Modeling .......................................................................... 5

III. GROUNDWATER AVAILABILITY MODELING....................................................................................... 6 A. District Management Plans and Groundwater Availability Modeling........................................................ 6 B. Practical Considerations Regarding District Management Plans and GAMs.............................................. 7 IV. OTHER WATER AVAILABILITY AND MODELING ISSUES................................................................... 8 A. Expert Testimony and Evidentiary Issues............................................................................................... 8 B. Flooding Cases..................................................................................................................................... 9 C. Plat Certification for Reliance on Groundwater as Source of Supply ........................................................ 9 V. CONCLUSION........................................................................................................................................... 9 APPENDIX “A”: TCEQ Water Availability Maps (Perpetual And Term) For The Sabine Basin APPENDIX “B”: TWDB Status Of Groundwater Availability Models

i

Water Availability Modeling – Recent Developments and Legal Considerations

error. We cannot assume that the General Assembly intended that an applicant for a conditional decree for water rights engaged in a complex, burdensome, and unreliable process for determining water availability and compliance with the . . . statute.

WATER AVAILABILITY MODELING – RECENT DEVELOPMENTS AND LEGAL CONSIDERATIONS INTRODUCTION Tremendous resources are now being expended in Texas to create water availability models for both surface water basins and groundwater aquifers. Surface water models for the major river basins are nearing completion at the Texas Commission on Environmental Quality (TCEQ), and the Texas Water Development Board (TWDB) is well underway with models of major groundwater aquifers. The models will be used by state regulators and local districts as the basis for far reaching decisions regarding the permitting and future use of water for existing and new users. Some would say that the water law of the State of Colorado is more well developed than water law in Texas. Yet, in 1995 the Supreme Court of Colorado, in adjudicating a hotly contested water permit matter, observed with some distress the disparate results produced by competing litigants’ models:1

I.

In response to the numerous pretrial rulings, . . . [applicant and protestants] produced computer models to simulate river conditions and to determine water availability. The models offered by [the applicant] and by those opposing the granting of the conditional [water] right, produced widely disparate conclusions regarding water availability as a result of the differing assumptions used in preparing the computer models. In the same decision, the Court was critical of the complexity, burden and unreliability of water modeling required by the lower (water) court:2 The method of proving water availability adopted by the water court is burdensome and the results are highly unreliable . Using elaborate computer models to predict future river conditions, based on assumptions concerning the future operation of existing and proposed water projects, compounds the burden on the applicant and the likelihood of

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Computer models are tools which will not be perfect and will contain flaws. Yet, whether we lawyers like it or not, the modeling of water availability will have a huge impact on future permitting decisions by the Texas Commission on Environmental Quality (TCEQ) and local groundwater districts. This paper is intended to help lawyers, consultants, landowners, permittees, and regulators understand the legal issues associated with such models, and how the models will likely be used to set policy and management plans, and for the permitting of diversions or withdrawal of water. II. SURFACE WATER AVAILABILITY MODELS Surface water models of one type or another have been used for decades by the staff of the TCEQ, and its predecessors, to determine the availability of water in river basins and to make permitting decisions. With the passage of time, and recent increases in funding of the modeling effort by the Legislature beginning with Senate Bill 1 in 1997, the agency’s water modeling efforts have become more sophisticated and comprehensive. A. The Current WAM Model A water availability model (WAM) is a computerbased simulation used to predict the amount of water that would be in a river or stream under a specified set of conditions.3 The WAMs do not, however, calculate the needed environmental flows which may be required to support in stream aquatic species or support flows to bays and estuaries. WAMs also do not account for, or model, water quality. The WAM for a specific river basin generally consists of two parts. First, the mode ling program (named Water Rights Analysis Package or “WRAP”), and second a text file that contains basin-specific information for WRAP to process (the input files). The WRAP was developed at Texas A&M University and was selected for use for the state-wide modeling effort after evaluation of the range of available river system simulation models.

1

In re Board of County Commissioners of the County of Arapahoe, 891 P.2d 952, 967 (Colo. 1995). The case is also notable for the reference to the detailed instructions given by the lower (water) court for the modeling of water availability. 2 Id. at 967. 1

3

http://www.tnrcc.state.tx.us/permitting/waterperm/wrpa/wa m.html.

Water Availability Modeling – Recent Developments and Legal Considerations

The user manual for the WRAP is available on the TCEQ website.4 The input files for a WAM include information about the river basin hydrology, historic gauged stream flows, and the details of water rights permits. The typical hydrologic period of data used in the WAMs in Texas is from 1940 to the present, including the 1950 – 1956 period of the drought-ofrecord. By using the approximately 60 years of historic data in a WAM it is expected that the model will capture the essential statistical characteristics of basin hydrology, and will therefore account for the probable range of future hydrology. The TCEQ staff has posted a listing of “WAM Resolved Technical Issues” on the agency website, consisting of agency decisions addressing certain aspects of modeling, such as:5 1)

2) 3) 4) 5) 6)

the method to input into models instream flow reservations (both those associated with a permit and those not associated with a permit); how to account for net evaporation; what is a “normal year” water availability as set forth in Senate Bill 1; the details of the sets of model runs required for each basin; how to account for the nearly 7000 known reservoirs in the state with capacity greater than 200 acre feet; and how to address return flows, both those based upon diversions and those resulting from groundwater uses.

The Resolved Issues also include legal issues, such as does a strict interpretation of the priority system require a modeling assumption that a junior right holder must be assumed to pass downstream all stream flows until a downstream senior reservoir is full? 6 The decision was to follow the strict interpretation of the prior appropriation doctrine, and require that all senior right holders’ terms be satisfied before meeting any junior right’s terms.

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B.

WAM Status and Output The TCEQ has completed WAMs for the major river basins and is set to complete the WAM for the final basin, the Rio Grande, by December 31, 2003.7 Graphical output from completed models in the form of “general water availability maps” are presented on the TCEQ website, for the following basins:8 Canadian River Basin Red River Basin Sulphur River Basin Cypress River Basin Sabine River Basin Neche s River Basin Neches-Trinity Coastal Basin Trinity River Basin Trinity-San Jacinto Coastal Basin San Jacinto River Basin San Jacinto-Brazos River Basin Brazos River Basin Colorado River Basin Colorado-Lavaca Coastal Basin Lavaca River Basin Lavaca-Guadalupe Coastal Basin Guadalupe River Basin San Antonio River Basin San Antonio-Nueces Coastal Basin Nueces River Basin Nueces-Rio Grande Coastal Basin For legal practitioners the general availability maps are useful as a rough indicator of whether unappropriated water might be available at a particular river location with sufficient frequency for a person to consider submitting an application for a new, or amended, water right. The TCEQ website maps present two model runs for each basin: 1) the Full Authorization simulation, in which all water rights utilize their maximum authorized amounts, provides information useful to evaluate applications for permanent water rights or amendments; and 2) the Current Conditions simulation, which includes historic return flows such as wastewater plant discharges, is used to evaluate applications for term water rights or amendments. Samples of the two maps (for perpetual rights and term rights) for the Sabine Basin are presented in Appendix “A”.

http://www.tnrcc.state.tx.us/permitting/waterperm/wrpa/map s/wrap_manual.pdf 5

7

http://www.tnrcc.state.tx.us/permitting/waterperm/wrpa/reso lve.html

See, Texas Water Code §16.012, which required the final WAM model, for the Rio Grande be completed by December 31, 2003.

6

8

http://www.tnrcc.state.tx.us/permitting/waterperm/wrpa/reso lve.html

http://www.tnrcc.state.tx.us/permitting/waterperm/wrpa/wa m.html

2

Water Availability Modeling – Recent Developments and Legal Considerations

The WAMs, however, are also intended as a tool to be used and updated as new rights are permitted and to evaluate the specifics of water right applications. TCEQ uses the WAMs to determine whether or not sufficient water may be available to satisfy a new water right application or amendment and, if so, if any specific conditions need to be placed on the right to protect other users. C. Water Availability Requirements for Surface Water Rights Permitting The Water Code sets forth specific requirements for an application to appropriate state water, and a key pre-requisite for the Commission to grant such an application is a finding that “unappropriated water is available in the source of supply.”9 TCEQ rules make it clear that an application for a new or increased permanent water right will be denied if unappropriated water is not available: Except [for a term permit], an application for a new or increased appropriation will be denied unless there is a sufficient amount of unappropriated water available for a sufficient amount of the time to make the proposed project viable and ensure the beneficial use of water without waste.10 Further, the Commission must find that the proposed appropriation will “not impair existing water rights or vested riparian rights.”11 The seminal Texas case on how to consider existing water rights in determining whether unappropriated water is available for permitting is Lower Colorado River Authority v. Texas Department of Water Resources, 689 S.W.2d 873 (Tex. 1984), involving the efforts to permit the Stacy Dam site near Ballinger, Texas. The details of the case are discussed in a footnote, but the Court’s holding sets the basis for valuing issued and existing water rights in water availability modeling. 12 The Court held that in 9

Texas Water Code §11.134(b)(2). 30 TAC § 297.42(a). 11 Texas Water Code §11.134(b)(3)(B). 10

12

In the case, the Colorado River Municipal Water District sought a permit to impound over 500,000 acre feet of water from the Colorado River and to annually divert and use 113,000 acre feet of water. The LCRA and others opposed the permit on the grounds that insufficient unappropriated water existed in the Colorado River at the proposed diversion point. In fact, the Commission’s “sophisticated computerized model” of the river showed that if all existing recorded water rights in the river basin were exercised in the maximum amounts authorized (or to the maximum extent of water available from inflows) that very little water would be available to appropriation at the proposed reservoir site and 3

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assessing the amount of “unappropriated water” in a river basin when evaluating an application for a new permit the agency must value all existing uncancelled permits and filings at their full recorded levels. In other words, existing permits are fully valued, irrespective of whether such permits have been perfected by beneficial use at the permitted amount and without regard to whether the full permitted amount is used on a regular basis. The Court reasoned that the proposed over-appropriation of water would cause upstream water right holders to suffer from the deprivation of water in times of drought and would return water rights in Texas to “a state of chaos.” TCEQ rules embody the Court’s holding and define unappropriated water as follows:13 Unappropriated water--The amount of state water remaining in a watercourse or other source of supply after taking into account complete satisfaction of all existing water rights valued at their full authorized amounts and conditions.

the estimated firm yield of the reservoir was approximately 3,000 acre feet per year. At hearing, the District challenged the model results and staff conclusions with testimony which: 1) presented historical water use data to demonstrate the maximum amount claimed under certified filings had never in fact been used and that some claims necessarily had not been “perfected”; 2) challenged many of the riparian claims as invalid because they were based upon Spanish and Mexican land grants that did not include riparian right and 3) provided demographic projections and historical use data which indicated that the full amounts authorized under uncancelled permits would not be used. By subtracting the estimated amounts that would not be used from the recorded filings, the District’s testimony indicated that there was sufficient water available for the proposed Stacy Reservoir. The Commission agreed and included a finding of fact that there was unappropriated water available for the permit. When the case reached the Texas Supreme Court, the Court held that the Commission erred in its construction of the term “unappropriated water” and the Court found that all existing uncancelled permits and filings shall be valued at their recorded levels in determining whether sufficient water exists for new appropriations. To support its holding, the Court relied upon prior court decisions, legislative history and the administrative construction previously given by the agency. Further, the Court reasoned that the proposed overappropriation of water would cause up stream water right holders to suffer from the deprivation of water in times of drought and would return water rights to a state of chaos. Further, the Court suggested that if any permitted water was not being put to a beneficial use, the Commission could correct that situation by canceling the permit, or part of a permit, which was not so used. 13 30 TAC § 297.1

Water Availability Modeling – Recent Developments and Legal Considerations

But a person may ask, does not every watercourse have unappropria ted water flowing during wet years or periods of high rainfall? If so, how is the above limitation any restriction on the issuance of new permits? The answer is, for water to be “available” in a practical sense and useful for irrigation, municipal or most other purposes the supply of water must be fairly continuous and dependable. A policy against granting permits for water which is only available during certain seasons, or years, goes to the heart of the success of irrigation projects, municipal supply or similar uses. This principle has long been recognized by state regulators, and was set forth by a court nearly one hundred years ago. In 1910, a New Mexico court held that it was proper to refuse an appropriation of water for a project which appeared doomed to failure due to inadequate flows. That court stated the policy for the denial, as follows:14 If there is available, unappropriated water of the La Plata river for only five or six thousand acres of land, it would be contrary to the public interest that a project for irrigating fourteen thousand acres with that water should receive an official approval which would, perhaps, enable the promoters of it to market their scheme, to sell stock reasonably sure to become worthless, and land which could not be irrigated, at the rice of irrigated land …. The failure of any irrigation project carries with it not only disastrous consequences to its owners and to the farmers who are depending on it, but besides tends to destroy faith in irrigation enterprises generally. A similar policy is found today in TCEQ rules, which require that to permit a direct diversion of water, without storage facilities, approximately 75% of the water requested must be available 75% of the time.15 The availability is evaluated on a monthly basis using the known historic stream flow records. Those records would typically include many decades of steam flow information (back to 1940) including periods of varying weather conditions and extended drought. The rule states:16

For the approval of an application for a direct diversion from a stream without sufficient on or off channel water storage facilities for irrigation, approximately 75% of the water requested must be available approximately 75% of the time when distributed on a monthly basis and based upon the available historic stream flow record. Lower availability percentages may be acceptable if the applicant can demonstrate that a longterm, reliable, alternative source or sources of water of sufficient quantity and quality are economically available to the applicant to make the proposed project viable and ensure the beneficial use of state water without waste. As can be seen, the 75/75 Rule is not absolute. The exceptions include cases where the applicant has a long-term reliable alternative source of water, a groundwater well for example. Further, TCEQ rules allow permitting of other types of projects without meeting the 75/75 Rule, such as artificial recharge of an aquifer, aquifer storage and retrieval projects, conjunctive use projects, and scalping operations (e.g. diversion of above normal stream flows into offchannel reservoirs).17 D. Practical Issues Related to Surface Water Availability Modeling Water availability models are developed to initially establish the “naturalized stream flows” e.g., to back out the human influences which have changed stream flows from their natural character. Developing the naturalized flow is a complex exercise and includes accounting for such activities as diversions, return flows and installation of dams and reservoirs. Once the base model of naturalized stream flows is established, then the affect of human activity is applied to the model, including all permitted uses valued at their full face amount, as required by the Stacy Dam case. Consider that in seeking to back out all the known permitted flows, to establish the naturalized stream flows, the WAMs necessarily are unable to account for the impact of unregulated domestic and livestock diversions, as those uses are exempt from both permitting and reporting.18 There are not accessible 17

14

Young & Norton et al. v. Hinderlider, 15 N.M. 666, 110 P. 1045 (New Mex. 1910), as cited by In Re Hitchcock and Red Willow Irrigation District, 226 Neb. 146, 410 N.W.2d 101 (Neb. 1987). 15 30 TAC § 297.42(c). 16 30 TAC § 297.42(d). 4

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18

30 TAC § 297.42(d).

Texas Water Code 11.142(a) (“Without obtaining a permit, a person may construct on the person’s own property a dam or reservoir with normal storage of not more than 200 acre-feet of water for domestic and livestock purposes.”) TCEQ rules further allow the direct diversion of the normal flow of stream water to property adjacent to the stream for

Water Availability Modeling – Recent Developments and Legal Considerations

historic records at the agency from which to quantify the amount of water used by these exempt sources. Additionally, there may be issues about annualizing withdraw rates for permits which are used for seasonal irrigation, including assumptions that such irrigation would peak in certain months and not occur in other months. Consistent with the Stacy Dam case, the WAM model is based upon the face amount of the right being fully exercised, whether or not the amount has actually been “perfected” by historic use. This is obviously a conservative view, and raises some interesting policy issues if substantial amounts of water remain unperfected years after a permit was issued. The issue of whether a court could grant an “equitable water right,” outside the administrative permitting process, was foreclosed by the Texas Supreme Court, which worried that such a process could result in over appropriation of water in a manner which was prohibited by the Stacy Dam case. The case arose from the adjudication of the Brazos River, and in reversing the decisions of the lower courts the Court held that it was necessary that the Texas Water Commission control the permitting process to prevent over appropriation. 19 Certain types of water rights permits would appear to not require the use of water availability modeling. For example, a bed and banks permit used to authorize the discharge and then downstream diversion of water is generally a matter of matching up the discharge flows with the diversions and accounting for carriage losses.20 What do you do if your client needs a permanent water right at a river location which appears to be fully appropriated? Obviously, a first task would be to see if the holder of a large senior water right is willing to sell water in a manner which would make the water

domestic and livestock uses, without a permit. 30 TAC 297.21. For a thorough summary of the current state of domestic and livestock uses and exemptions see Dean, Domestic and Livestock Use – What Rights Does My Client Have Left?, presented at the February 14, 2003 State Bar Seminar, The Changing Face of Water Rights in Texas 2003.

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available at the location. If not, it would be prudent to determine whether there are existing permits which are in fact unused (but which the WAM considers to be fully used, and hence the model indicates that water at the location is “fully appropriated”). The unused rights could be purchased, or even cancelled, to free up water for a new appropriation. Although cancellation of a water right for non-use is a rare event, a right or portion of a right is subject to cancellation if it has not been put to beneficial use at any time in the 10-year period prior to the cancellation proceeding. 21 Recent changes to Chapter 11 of the Water Code also make it more difficult to cancel a right necessary to meet a water needs included in an approved regional water plan or required for the long term public water supply or power generation needs.22 E.

Reported Decisions Involving Surface Water Modeling Except for the Stacy Dam case and the flooding cases discussed later, there are few reported cases in Texas where the sufficiency of a water model was hotly contested. In the administrative context, the adequacy of application of the Water Rights Analysis Package (WRAP) was an issue in the Southerland Properties, Inc. permit application, which went to contested hearing at SOAH.23 In the Order granting the water rights permit, the Commission included finding of fact number 44 which stated that agency staff properly applied the WRAP, a computer program used to determine stream flow availability and water reliability. Apparently, the staff analysis was challenged on the basis that it did not adequately account for channel losses in the affected area of the Guadalupe River and the effect of any hydrological connection between surface water and groundwater. A water availability model was the basis for a Special Masters decision upheld by the U.S. Supreme Court in a dispute between the State of Kansas and the State of Colorado. 24 One issue in the case involved the hydrologic model’s ability to accurately predict flows on a monthly basis and, given limitations of the model, the Special Master rejected the analysis based upon monthly flows.

19

In re: The Adjudication of Water Rights of the Brazos III Segment of the Brazos River Basin, 746 S.W.2d 207, 211 (Tex. 1988). 20

A bed and banks permit and pre-Senate Bill 1 legal issues related to the right to divert and reuse a person’s existing return flow derived from privately owned groundwater were considered in City of San Marcos v. the Texas Commission on Environmental Quality, 2003 W.L. 22024663 (Tex. App. – Austin 2003) (addressing a city’s common-law rights over reuse of groundwater return flows, as they existed prior to enactment of Senate Bill 1, Acts 1997, 75th Leg. Chapter 1010 eff. September 1, 1997). 5

21 22 23

Texas Water Code § 11.173(a). Texas Water Code § 11.173(b).

Application of Southerland Properties, Inc. for Permit No. 5647 to Appropriate Water; SOAH Docket No. 582-011272; TNRCC Docket No. 2000-1230-WR (Final Order issued May 16, 2002). 24 Kansas v. Colorado, 514 U.S. 673, 685, 115 S.Ct. 1733 (1995).

Water Availability Modeling – Recent Developments and Legal Considerations

III. GROUNDWATER AVAILABILITY MODELING Where are we today in the understanding of the nature of subterranean aquifers and availability of groundwater? In 1904 the Texas Supreme Court recognized the validity of the rule of capture in the East case, noting the “secret, occult, and concealed” nature of groundwater and worrying that “an attempt to administer any set of legal rules in respect to them would be involved in hopeless uncertainty, and would, therefore, be practically impossible.”25 Although the science of groundwater hydrology has come a long way in understanding the nature and properties of groundwater since 1904, there remain inherent elements of uncertainty in dealing with underground reservoirs due to the difficulty in measuring and quantifying what occurs below the surface of the ground. Aspects of groundwater storage, recharge and flow continue to be at least “secret” and “concealed.” In contrast to river basins which generally have reliable hydrology records for nearly the past 60 years, there are large areas of the state where groundwater data has only recently been collected. 26 Further, in contrast to the state-wide authority of the TCEQ over surface water availability and permit issues, groundwater issues are dealt with at the local level by the local groundwater district (if one exists). Other than the authority, guidance and limitations provided by Chapter 36 of the Texas Water Code (or any district specific legislation), groundwater districts will seek to tailor their rules to local needs. It is yet to be seen whether the disparate, under-funded, and sometimes unsophisticated groundwater districts will be capable of developing groundwater models with the kind of quality and reliability as the surface water modeling effort overseen by the TCEQ. In an effort to ensure some uniformity to the groundwater modeling effort, the Texas Water Development Board (“TWDB”) has been charged with the task of overseeing the development of many of the GAMs. The TWDB, and its outside contractors, are in the process of developing GAMs for the major aquifers in the state, which models are scheduled to be 25

Houston & T.C. Ry. Co. v. East, 81 S.W. 279, 98 Tex. 146 (1904). 26 Even older districts, such as the Barton Springs Edwards Aquifer Conservation District which was created in 1987, appear to have limited historic data. The transient portion of the GAM, under current development for the District, uses only recharge and production data for a 10-year period (1989 – 1998), although older data was apparently considered and used in other aspects of the model. See, Scanlon, et al., Groundwater Availability of the Barton Springs Segment of the Edwards Aquifer, Texas: Numerical Simulations Through 2050 (Oct. 2001). 6

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completed by September 2004. 27 The major aquifer models are to include the: (1) Ogallala, (2) Gulf Coast, (3) Edwards (BFZ), (4) Carrizo-Wilcox, (5) Trinity, (6) Edwards-Trinity (Plateau), (7) Seymour, (8) HuecoMesilla Bolson, and (9) Cenozoic-Pecos Alluvium. The Board also plans to model minor aquifers such as the Lipan, Queen City and Sparta by 2004. Additionally, the Edwards Aquifer Authority is developing a new model for the San Antonio portion of the Edwards. Current GAM status, from the TWDB website, is presented in Appendix “B” hereto. A. District Management Plans and Groundwater Availability Modeling The 77th Legislature, in Senate Bill 2 (2001), mandated that districts use groundwater availability models in developing, or amending, their district management plans. District management plans form the basis for a district’s policy decisions on well regulation, rule making, and the issuance or denial of pumping permits. The management plans are to be vetted in pubic hearings, where the merits of the plan may be debated by landowners and members of the public. The adoption process and goals of the plans are described by statute as follows:28 Following notice and hearing, the district shall, in coordination with surface water management entities on a regional basis, develop a comprehensive management plan which addresses the following management goals, as applicable: (1) providing the most efficient use of groundwater; (2) controlling and preventing waste of groundwater; (3) controlling and preventing subsidence; (4) addressing conjunctive surface water management issues; (5) addressing natural resource issues; (6) addressing drought conditions; and (7) addressing conservation. As to modeling, in Senate Bill 2 the Legislature mandated that new management plans, or amendments to existing plans shall be developed using the TWDB GAM information:29

27

http://www.twdb.state.tx.us/Gam/GAM_aquifer.htm Texas Water Code § 36.1071(a). 29 Texas Water Code § 36.1071(h). 28

Water Availability Modeling – Recent Developments and Legal Considerations

In developing its management plan, the district shall use the groundwater availability modeling information provided by the executive administrator [of the TWDB] in conjunction with any available site-specific information provided by the district and acceptable to the executive administrator.

availability models for major and minor aquifers in coordination with groundwater conservation districts and regional water planning groups created under Section 16.053 [of the Water Code] that overlie the aquifers. Modeling of major aquifers shall be completed not later than October 1, 2004. On completing a groundwater availability model for an aquifer, the executive administrator shall provide the model to each groundwater conservation district and each regional water planning group created under Section 16.053 overlying that aquifer.

Further, and in addition to the mandated use of “sitespecific information” the management plan shall be developed using the “best available data”:30 After January 5, 2002, a district management plan, or any amendments to a district management plan, shall be developed by the district using the district's best available data and forwarded to the regional water planning group for consideration in their planning process.

B.

The management plan is further to contain specific elements related to production, recharge and demand, set forth in statute as follows:31 In the management plan described under Subsection (a), the district shall: (3) include estimates of the following: (A) the existing total usable amount of groundwater in the district; (B) the amount of groundwater being used within the district on an annual basis; (C) the annual amount of recharge, if any, to the groundwater resources within the district and how natural or artificial recharge may be increased; and (D) the projected water supply and demand for water within the district. The TWDB’s role in groundwater availability modeling is to oversee the development of such models and to coordinate the activities with the local groundwater districts and the regional water planning groups:32 The executive administrator [of the TWDB] shall obtain or develop groundwater 30

Texas Water Code § 36.1071(b). Texas Water Code § 36.1071(e). 32 Texas Water Code § 16.012(l). 31

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Practical Considerations Regarding District Management Plans and GAMs What role should the landowner, well owner, or prospective applicant play in a groundwater district’s development of its management plan or GAM? As described above, the process for adoptio n or amendment of a district’s management plan allows for public input and criticism. Those persons with significant property interests would be well advised to retain an experienced engineer or groundwater hydrologist to evaluate the validity and assumptions in a GAM, given the highly technical and complex nature of such models. There is inherent uncertainty in knowing key information regarding underground aquifers due to difficulty and expense in assessing the aquifer characteristics. Important aquifer characteristics will include: thickness of productive zones, porosity, permeability, aerial extent of the aquifer, location of bad water, and importantly the nature and amount of recharge and out flows, and potential barriers to same. Due to the inherent uncertainties in subterranean data, groundwater models are best suited to those aquifers for which actual aquifer performance data, including years of historic production, groundwater levels and pressure data are available. Further, until an aquifer is “stressed” by significant amounts of production (relative to storage), it may be difficult to predict the actual effects of large production volumes on an aquifer. Production volumes which stress an aquifer, including variations in annual pumpage rates can be important to understand the aquifer’s response to such production and to validate a model of the aquifer. Therefore, groundwater districts would be well advised to spend resources in a data collection phase if they intend to develop a groundwater availability model which accurately reflects aquifer performance. Unfortunately, given local politics and agendas, districts may feel pressured to adopt a groundwater availability model well before enough accurate aquifer information is available.

Water Availability Modeling – Recent Developments and Legal Considerations

Basic questions to be asked about a GAM would include: -

-

What amount of annual recharge to the aquifer is assumed and what is the basis for that assumption? How many years of historic water level measurements, pressure and production data was used to validate the model? What are the boundary conditions at the model edges, and do they allow for groundwater flows into or out of the model? What historical aquifer information was used in the model? How do predictive runs of the model value production permits (at their full permitted amount or based upon historic production rates)? Has the GAM been peer-reviewed, was it developed under the supervision of TWDB, and how has it been changed to address unique district issues?

The above questions ideally need to be asked and addressed before a GAM is finally adopted by a district. Flaws in a GAM should be raised with the district before the model is adopted. Given the substantial evidence standard of review of most district decisions, a person is well advised to present evidence of the flaw to the district board. Extensive precedent exists as to how to use geology and aquifer performance data to set production rules for underground reservoirs - - that being literally decades of experience and hearings held by the Texas Railroad Commission. Expert testimony and reservoir models have long been part of the process used in hearings held by the Texas Railroad Commission in setting “field rules” to regulate the production from oil and gas reservoirs. Field rules are field specific deviations from state-wide rules, which would otherwise apply by default. However, field rules are set based upon testimony and evidence heard by experienced hearing examiners (in some cases, both an engineer and a legal examiner are involved) with decisions rendered by the Commissioners, who have state-wide jurisdiction. Such a process allows both site specific considerations to be applied to individual reservoirs, but ensures some uniformity of policies and decision-making state-wide, as the Commission ultimately makes the final agency decision. The degree of deference of courts to the policy decisions of groundwater district boards is somewhat uncertain and case specific. Chapter 36 provides that acts, rules and orders of a district are deemed prima facie valid and the standard of review on appeal is the 8

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quite deferential substantial evidence standard. 33 Yet, in a recent legal challenge involving the action of the High Plains Underground Water Conservation District to revoke a permit, the court reviewed the district’s order de novo as a question of law, given the court’s view that the district did not have clear statutory authority to take the subject action. 34 The court’s decision was not the final word in the matter, as the Legislature then amended Chapter 36 of the Water Code to allow what the District had sought to do (regulate well production based upon acreage or tract size).35 IV. OTHER WATER AVAILABILITY AND MODELING ISSUES A. Expert Testimony and Evidentiary Issues Expert testimony must be based upon a sound foundation, and an expert using and providing opinions about water models will be subject to the same reliability factors set forth in Robinson. The Robinson factors for determining the reliability of scientific methodology, include the following:36 (1) the extent to which the theory has been or can be tested; (2) the extent to which the technique relies upon the subjective interpretation of the expert; (3) whether the theory has been subjected to peer review and publication; (4) the technique's potential rate of error; (5) whether the underlying theory or technique has been generally accepted as valid by the relevant scientific community; and (6) the non-judicial uses that have been made of the theory or technique. In the Gragg case, the Court of Appeals applied the Robinson factors to determine whether or not the flooding model used by the plaintiff’s hydrology experts met the reliability test.37 Although the 33

Texas Water Code § 36.253. South Plains Lamesa Railroad, Ltd, v. High Plains Underground Water Conservation Dist. No. 1 52 S.W.3d 770 (Tex. App. – Amarillo 2001, no pet.) 35 Senate Bill 2 (2001) amended Sections 36.101 and 36.116 of the Water Code. See, Burkhalter; The Current State of Groundwater District and Senate Bill 2 (The Changing Face of Water Rights in Texas 2002). 36 E.I. du Pont de Nemours & Co. v. Robinson, 923 S.W.2d 549 (Tex.1995) (adopting the holding setting forth the standards of the admissibility of expert testimony in Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 590, 113 S.Ct. 2786, 2795, 125 L.Ed.2d 469 (1993). 37 Tarrant Regional Water Dist. v. Gragg, 43 S.W.3d 609, 617 (Tex.App.-Waco 2001, pet. granted). 34

Water Availability Modeling – Recent Developments and Legal Considerations

plaintiff’s model was “tailor-made” and had never before been used, evidence indicated that was an acceptable practice in the field of hydrology, and the model was merely used to help with calculations, not to advance a new or novel hydrology theory. The Court found that the model met the Robinson reliability factors. Flooding Cases Hydrology experts are common, and water models are sometimes used, in flooding cases. Flooding models would obviously differ from the monthly-time step WAMs, due to the need to model events which develop and dissipate in mere hours or days. Recent flooding cases of interest include the City of Keller and Gragg cases. In City of Keller, downstream property owners sued the City and developers after flooding which was allegedly caused by the improper drainage design of a new residential subdivisio n.38 The plaintiffs presented expert testimony and a hydrological study of project water flows from the subdivision across the plaintiffs lands. The evidence established that the subdivision drainage would substantially increase the volume and flow of water across the plaintiff’s property, and in the expert’s opinion the drainage design was the cause of the flooding. The Court upheld the trial courts ruling in favor of plaintiffs. Hydrology testimony was key to plaintiffs’ victory (at least so far) in Gragg, where downstream landowners sued the Tarrant Regional Water Authority for flooding of their property, due to the construction of the Richland Chambers Reservoir, located upstream of their property. 39

230 of the commission’s rules.41 The certification requires, inter alia, obtaining site specific groundwater data, an aquifer test using a test and observation wells, and an analysis of water quality. From known regional geology and the site specific test, a determination of groundwater availability must be made, as follows:42 At a minimum, both a short- and long-term determination of groundwater availability shall be made, each considering the estimated total water demand at full build out of the proposed subdivision. Groundwater availability shall be determined for ten years and 30 years and for any other time frame(s) required by the municipal or county authority.

B.

C. Plat Certification for Reliance on Groundwater as Source of Supply In the case of a proposed new subdivision which would rely upon groundwater as its sole source of supply, a platting authority (such as a county or municipality) may require the applicant for plat approval provide a certification, by a licensed professional engineer or licensed geoscientist, that adequate groundwater is available to supply the subdivision. 40 The TCEQ has adopted extensive regulations, and a three page certification form, as required by the legislation. The rules and form are found in Chapter

V.

CONCLUSION Water availability models, by necessity, must correctly embody not just hydrology elements, but also include legal principles, such as the rights of senior water right holders under the prior appropriation doctrine. Surface water models have been used for decades in water rights permitting, and nearly 60 years of historic stream flow data is available for most river basins in the State. The current WAMs build on this large base of data and experience. Groundwater models are just now being developed for major aquifers in the State, and historic production and water level data for such models is not as readily available or as comprehensive as surface water data. It is yet to be seen how groundwater districts will use the models and whether the models will accurately predict aquifer performance. The role of the lawyer is to ensure that a client is well represented. At the end of the day, the lawyer needs to ensure that the use of a water model is accurate and fair to his client, and ferret out any inaccuracies, biases or political agendas. Do not let a flawed or biased model cause your client to get a consolation prize or the euphemistic recognition that they “lose” but the case “was soooooo close . . . ”43

41 42 38

City of Keller v. Wilson, 86 S.W.3d 693 (Tex. App. – Ft. Worth 2002, no pet.). 39

Tarrant Regional Water Dist. v. Gragg, 43 S.W.3d 609, 617 (Tex.App.-Waco 2001, pet. granted). 40 Local Gov’t Code § 212.0101. 9

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30 TAC § 230.

30 TAC § 230.10. Thanks to Kelli Hicks, the exuberant moderator of the weekly family talent competition at the Mayan Dude Ranch in Bandera Texas, where there are first and second place winners but everyone else “ties” for third place, because “it was soooo close . . . no crying.” www.mayanranch.com. 43

Water Availability Modeling – Recent Developments and Legal Considerations

APPENDIX “A” TCEQ Water Availability Maps (Perpetual And Term) For The Sabine Basin

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Water Availability Modeling – Recent Developments and Legal Considerations

APPENDIX “B” TWDB Status Of Groundwater Availability Models

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