HOW IS THE GROUNDWATER ESTATE CHARACTERIZED RELATIVE TO LAND?
The Texas Supreme Court has stated that percolating water is a “part of, and not different from, the soil” and the landowner is the “absolute” owner of it. Houston & T.C. Ry. Co. v. East, 98 Tex. 146, 81 S.W. 279, 281 (1904); see, e.g., City of Sherman v. Pub. Util. Comm’n, 643 S.W.2d 681, 686 (Tex. 1983) (“The absolute ownership theory regarding groundwater was adopted by this Court in Houston & T.C. Ry. Co. v. East, 98 Tex. 146, 81 S.W. 279 (1904).”); Friendswood Dev. Co. v. Smith-Southwest Indus., Inc.,576 S.W.2d 21, 25-27 (Tex. 1978).
This principle is was codified by the Texas Legislature when it enacted Chapter 36 of the Texas Water Code. Section 36.002 provides (in relevant part) as follows:
Sec. 36.002. OWNERSHIP OF GROUNDWATER. (a) The legislature recognizes that a landowner owns the groundwater below the surface of the landowner’s land as real property.
(b) The groundwater ownership and rights described by this section entitle the landowner, including a landowner’s lessees, heirs, or assigns, to:
(1) drill for and produce the groundwater below the surface of real property, subject to Subsection (d), without causing waste or malicious drainage of other property or negligently causing subsidence; and
(2) have any other right recognized under common law.
(b-1) The groundwater ownership and rights described by this section do not:
(1) entitle a landowner, including a landowner’s lessees, heirs, or assigns, to the right to capture a specific amount of groundwater below the surface of that landowner’s land; or
(2) affect the existence of common law defenses or other defenses to liability under the rule of capture.
(c) Nothing in this code shall be construed as granting the authority to deprive or divest a landowner, including a landowner’s lessees, heirs, or assigns, of the groundwater ownership and rights described by this section.
“Water, unsevered expressly by conveyance or reservation, has been held to be part of the surface estate.” Sun Oil Co v. Whitaker, 483 S.W.2d 808, 811 (Tex. 1972) (emphasis added). And, groundwater is the “exclusive property” of the owner of the surface and “subject to barter and sale as any other species of property.” Texas Co. v. Burkett, 117 Tex. 16, 296 S.W. 273, 278 (1927). This doctrine is called the “absolute ownership theory.”
CAN GROUNDWATER BE RESERVED WHEN A LANDOWNER SELLS THE SURFACE?
Under the absolute ownership theory, a landowner who sells his property is entitled to sever the groundwater from the surface estate by reservation when he conveys the surface estate. This reservation must be express in a deed or other instrument of conveyance.
WHAT IF THE GROUNDWATER IS NO LONGER “ACCESSIBLE” BECAUSE ALL RIGHTS OF ACCESS TO THE SURFACE ARE RELINQUISHED?
Generally speaking, a party does not need access to the surface estate to pump the groundwater from beneath a tract. An owner or their assignee (including a groundwater exporter or lessee) can access the groundwater from adjacent property. Where large exporters are concerned, it is common to use large assemblages of land to produce groundwater from a small number of wells situated on one or two tracts. In this regard, not every leased tract will host a well.
Because groundwater may be accessed without entry onto the surface of land, relinquishment of its right to enter the surface estate is not a relinquishment of a water rights reservation or of the right to capture the water beneath the tract. See City of San Augustine v. Johnson, 349 S.W.2d 653, 655 (Tex. App.–Beaumont 1961, writ ref’d n.r.e.) (holding that even though the city condemned 40.8 acres of the defendant’s surface estate, the defendant’s mineral estate beneath that 40.8 acres still had value ≤≥÷:because he could perform directional drilling from his adjacent land).
THE ACCOMMODATION DOCTRINE APPLIES TO GROUNDWATER IN TEXAS
Another important consideration applies when the owners of the surface estate and groundwater estate are not the same party. This legal principle originates from oil and gas law and is known as the “accommodation doctrine.”
First extended to groundwater by the Texas Supreme Court in 2016, the accommodation doctrine provides that a severed groundwater estate has the same right to use the surface that a severed mineral estate does:
Analogizing groundwater to minerals in determining the applicability of the accommodation doctrine is no less valid than it is in determining ownership. Common law rules governing mineral and groundwater estates are not merely similar; they are drawn from each other or from the same source. The dispute here over the City’s right to use the Ranch is much the same as the disagreement between Getty Oil and Jones. Resolution of both requires an interpretation of the severed estate’s implied right to use the surface. The accommodation doctrine has proved its worth in such cases.
Coyote Lake Ranch, LLC v. City of Lubbock, 498 S.W.3d 53, 64 (Tex. 2016)
