All the Groundwater Law you Always Wanted to Know, But Were Afraid to Ask

Courtesy of a link from Property Prof Blog I was led to this fantastic primer on Groundwater Law from Prof. Joseph Dellapenna at Villanova law.  One of the points he emphasizes, which I strongly agree with, is the idea that the shifting terminology used by courts has resulted in tremendous confusion about the nature of property rights in groundwater in most, if not all, jurisdictions.

When I tried to switch from being a scientist to being a lawyer I struggled mightily with the concept of creating static law by using words - which are highly mutable.  I came from a world where laws were often defined by equations that incorporated numbers and constants - immutable laws - and tried to find my way in a world where laws are subject to near-constant reinterpretation; words don't always mean the same thing to all people.  Crazy stuff, the law.  Hope you enjoy this article as much as I am.

Quality Scholarship on the Issue of Property Rights in Groundwater

This article was posted on the Environmental Law Prof blog recently.  I'll bite on anything that discusses the nature of property rights in groundwater and this article is a very good one.  The author is a former scientist (geologist) turned lawyer (now law professor), so we have something in common.  It's a very thorough discussion of how groundwater rights are treated in the context of takings jurisprudence, using last year's decision (pdf) from the Texas Supreme court in the case of Day v. Edwards Aquifer Authority as the jumping off point. At the time the ruling came down there were many (myself included) who felt it was a blow to prospects for sensible groundwater regulation in Texas.  Finding that landowners have a constitutionally protected right (potential) to groundwater in situ is a strange concept in nearly every state in the U.S. except Texas.  But Prof. Owen believes that this is not a death knell for future regulation of groundwater use.  He believes that property rights in groundwater and sensible regulation of those rights can co-exist.  I hope he is right.

Colorado Considers Adopting Public Trust Doctrine?

I came across this link courtesy of Aquadoc's Weekly Round-up of water news.  Seems a few people in Colorado are dissatisfied with their current system of reasonably secure property rights in the use of the state's water.  They are placing initiatives on the ballot later this year that would formally adopt a strong public trust doctrine.  The texts of the proposed initiatives can be found here and here.  Essentially what this would do is still allow you to have your water rights - whether derived from prior appropriation or whatever.  But those rights would always be subject to rights of the state to protect the water on behalf of the people.  So if someone decides that a world-class trout fishery is more important to the state than a valley full of farmers, the state could step in (theoretically) and tell the farmers to stop diverting water for irrigation so that the trout stream can thrive.  This is a concept that exists in many places but only rarely has it been found to trump existing property rights.  In this case, the wording of the initiative states pretty clearly that the public trust is superior to private property rights.  I don't see this going very far.

Article on the value of property rights and markets to deal with uncertainty in water management

I came across a link to this article on the PropertyProf Blog - a great source of scholarly research and other fun stuff dealing with property law.  This one comes from Jonathan Adler, professor at Case Western Reserve Law School and also a contributor to the Percolator blog from the Property and Environment Research Center (PERC) - a great resource for finding solutions to environmental problems that incorporate private property concepts.

The article is titled Water Rights, Markets, and Changing Ecological Conditions.  Here's a link to the SSRN page that it can be downloaded from.  In it he tries to lay out the reasoning to support increased reliance on private property rights and market mechanisms to deal with uncertainty in water management resulting from factors like climate change.  Should be well worth reading.

Assorted Property Rights for Sale

For some reason I was searching through a list of books on water marketing on Amazon the other day and an advertisement on the bottom of the page caught my eye.  It offered a forum for buying and selling water rights and listed a website: http://georights.com/.

So I clicked through to take a look.  Seems they offer just about every sort of interest in land there could be: easements, mineral rights, hunting/fishing rights, etc.  It must be fairly new because they are offering free sign-ups to list and bid on properties in order to build their traffic.

So I checked out their listing of water rights for sale.  Not real extensive at this point, but pretty good geographic diversity for what is there.

I'm kind of curious if anyone out there has any experience with this outfit or knows of the people behind it.  Anyone .... Bueller?  Chris Corbin?

Chino Valley Town council candidates to protect well owner's property rights (what property rights?)

This little piece showed up in the Chino Valley Review last week, describing a candidate forum for the Chino Valley Town Council. Chino Valley is a very small town just north of Prescott, Arizona and happens to be in the vicinity of where Prescott is planning to pump groundwater that will be transported into the Prescott area to support current and future growth. If you're interested I have posted previously on this project and some of the interesting legal issues that have some up because of it here and here.

I really love the way local politicians pander to their constituents by talking about their property rights in groundwater - when those rights consist of nothing more than the right to pump water out of the ground faster than your neighbors, who are trying to do the same thing. The property rights claims are always made when someone mentions the possibility of metering peoples wells to determine how much water they are using - this is just the first step in regulating how much water people can pump, they say. I guess they will know if they are pumping too much when they have to deepen their wells every 5 years. In this case Prescott is asking people to meter wells in the area, presumably so they can determine the sustainable yield of the aquifer, but those intrepid town council candidates see right through that ruse:

As for metering private wells, Schmidt said, "The metering idea comes from Prescott so it can get more water. Our private wells have no impact on Prescott."
Another candidate, Linda Hatch, said, "I don't think it (metering of private wells) will happen. If the wells go dry the town will offer them an opportunity to go on the town's system."
Candidate Robert Justice said metering of private wells is not the way to go. If a person's well goes dry they will have options.

Their big concern is that pumping by Prescott will dry up individual wells and they might be right, because Prescott has the same "property right" in the groundwater that they do, but they also have the resources to put in large, deep wells with high capacity pumps - giving them a heavy-duty property right.

So these folks are basically saying: there's no need to meter your pumping, because if everyone is pumping too much their wells will go dry and we'll hook you up to the city water system. What they don't mention is that those people will then be paying a lot more for their water and ... their water use will be metered (unless they have flat-rate water service up there). In other words they're happy to talk about protecting your water rights to get your vote even though they acknowledge that those water rights really aren't worth a damn. Do people really fall for this stuff?

Min(e)d the Gaps

There was an interesting post on WaterWired that referenced a recent article in the Santa Fe paper, discussing the issue of ownership of underground pore spaces from which oil and gas had been extracted. Just so you know - I am a big fan of interesting and novel property rights issues and this is a gem.

Some quick background:
All sedimentary deposits are composed of mineral grains of various sizes intermingled with pore spaces that are typically filled with air or water, but sometimes contain recoverable quantities of oil or gas. This is true of unconsolidated deposits (loose sand, gravel, silts and clays) and consolidated materials (i.e. sandstone or shale), however the native porosity of hardened materials is often less than unconsolidated materials because some of the pore space will be filled in by mineralization (with hardrock the dominant porosity is often what is called secondary porosity, resulting from joints and fractures in the rock).

Under the common law of property the person who owns real property (land) owns everything within their property boundaries including the sky above and the earth below. This concept has been modified over time such that landowners cannot prevent airplanes or satellites from passing over their property and the subsurface estate can be split from the surface estate, so that a landowner may own the surface of their property but someone else owns what lies below or at least the right to extract any valuable minerals lurking underground. Much of oil and gas law is based on this split-estate concept.

The issue they are addressing in New Mexico (and also Wyoming, Montana, and perhaps Utah) is who owns the empty pore spaces remaining underground after the minerals have been extracted. This issue is coming to the fore right now because utilities and regulators are looking at old oil and gas reservoirs as possible places to store captured carbon dioxide as part of climate change mitigation measures. I find this interesting because of how it relates to the practice of using depleted aquifers to store water through aquifer storage and recovery (ASR) programs. With ASR there typically is no issue over pore space ownership because (by statute) the entity recharging water into the aquifer owns the water placed there (regardless of pore space ownership), although it usually requires ownership of some overlying surface land in order to put the water in the aquifer. There are probably some state-to-state differences because of differing rules regarding water rights, but I'm not going to get into that here.

With a split estate, the party owning rights to extract oil and gas, would typically only own the hydrocarbons within the pore spaces, not the actual pore spaces. The oil and gas industry is arguing to the contrary but most political support appears to reside with the surface estate owners who believe that once the oil and gas have been removed nothing remains for the extracting party to own. I suspect this is not an issue that has arisen in case law or been addressed by state statute, which is why legislators are addressing it now. But the oil and gas industry must be interpreting some law to make their case and probably have a plausible argument somewhere.

Another issue likely to have a significant role in resolution of pore space ownership questions will be liability for carbon dioxide storage projects. The power industry has been pushing Congress to limit or remove their liability in the event that a storage facility fails to contain the CO2. If a landowner owns the space in which the CO2 is stored they will want similar protection from liability. This would probably be resolved through contracting for use of the space once the ownership is worked out.

Finally, despite what the coal industry has been pushing about the viability of CO2 capture and storage (probably their only hope for survival in a post-carbon society) this is a largely untested technology with a lot of uncertainty associated with it. For more on that issue, check out this recent article in The Economist.