Ridenbaugh Press/Water Rights

Officials from Mesa Water and the Canadian River Municipal Water Authority said on April 7 that they have reached a preliminary agreement on the terms of a deal that would result in a sale to CRMWA of approximately 211,000 surface acres of water rights currently owned or controlled by T. Boone Pickens and Mesa Water.

“We are pleased to have reached this point with Mesa Water,” said Norman Wright, President, CRMWA Board of Directors. “The addition of these groundwater rights to those currently owned by CRMWA further reduces our reliance on Lake Meredith as a source of supply. The result of this agreement will benefit everyone involved and ensure that CRMWA is able to continue its supply to Member Cities for generations in the future.”

CRMWA has agreed to pay approximately $103,000,000 for this nearly 4 trillion gallons of groundwater in place. The preliminary agreement is not legally binding and will be followed by a final purchase and sale agreement at a later date once full due diligence and financing arrangements have been completed. The sale is expected to close in July or August 2011.

“When we started this project in 1999, we wanted to make sure people in the Panhandle fully realized the value of the asset under their property,” said T. Boone Pickens, Chief Executive of Mesa Water. “With this deal at this time, we have done that. This purchase and prior purchases have put roughly $200 million into the Panhandle economy for local ranchers and landowners. The Panhandle now has a reliable local water source that they can count on for hundreds of years. This sale will include all of our co-owners who previously sold 50% to us in 2005. This is a classic win-win transaction.”

For over fifty years, the Canadian River Municipal Water Authority has worked to serve its member cities and all citizens of the Texas Panhandle and South Plains by providing a dependable and safe source of municipal and industrial water.

CRMWA supplies raw water to 11 member cities (over 1/2 million people) in the Texas Panhandle and South Plains via a 370-mile aqueduct system. The Authority’s current source of water is Lake Meredith and the John C. Williams Wellfield in the Texas Panhandle. CRMWA was created by the Texas Legislature to provide a source of municipal and industrial water for its eleven member cities: Amarillo, Borger, Brownfield, Lamesa, Levelland, Lubbock, O’Donnell, Pampa, Plainview, Slaton, and Tahoka. The headquarters is located at Sanford Dam about 37 miles northeast of Amarillo, Texas. The original project (Lake Meredith and its associated pipelines) was built and financed by the Bureau of Reclamation in the mid 1960′s. The groundwater project came on-line in 2001 and its importance and scope has increased as Lake Meredith’s storage has declined.

An editorial in the Amarillo Globe-News called the sale “a huge deal”:

“In short, the deal puts the region in the catbird seat as it relates to its water future. Amarillo City Manager Jarrett Atkinson – considered one of the region’s pre-eminent water-management experts – said: “The CRMWA purchase has done a good a job to secure water for us as long as it can.” Atkinson said CRMWA has increased its water holdings by about 80 percent and it now has secured sufficient groundwater literally for generations to come. There comes a cost to homeowners and business owners, Atkinson said. Water and sewer rates could increase 10 to 12 percent to pay for the bonds that will finance the purchase, he said.

“The purchase will be completed no later than July or August, Atkinson said, referring to the myriad details that still need to be worked out between Pickens and CRMWA. But as communities all across Texas struggle with water-management issues, this purchase well could signal a brighter tomorrow for the Panhandle.”

The T. Boone Pickens company Mesa Water LP is filing a lawsuit against three local Texas water planning entities, arguing that their planning efforts could have the effect of devaluing his water rights.

The suit was reported filed in March, with the statewide Texas Water Development Board noted as a defendant.

Pickens said the planning effort could have the effect of taking as much as 18,000 acre feet of water in the Ogallala Aquifer from him and another business party.

State and regional planning, much of it by the Texas Water Development Board, came under some criticism on November 11 at a lengthy public hearing on the ideas.

The planning, for what is called Groundwater Managing Area 1, is driven in large part by efforts to managing the limited and diminished water supply in the Ogallala Aquifer. Four counties (Dalhart, Sherman, Moore and Hartley) have set specific goals for maintaining at least 40% of the supply in the aquifer for the next 50 years.

But some water users in the area think the state’s planning overreaches. The plans also have drawn concerns from the companies owned by Texas businessman T. Boone Pickens, who has purchased numerous water rights in the area, developing a massive private water market. [see Amarillo (TX) Globe-News, November 12]

A trial court in Texas has held that the state’s rule of capture for water rights lets owners of water rights sell those rights separately from the land. That position is crucial to businessman T. Boone Pickens and to the city of Amarillo and the Canadian River Municipal Water Authority , al of which have accumulated vast reserves of water under that principle.

The case has been appealed to the Texas Supreme Court. In August, Pickens and the other parties filed in opposition to the appeal and support of the lower court. [see Lubbuck (TX) Avalanche Journal]

Boone Pickens

A Business Week article is reporting that T. Boone Pickens, the foremost private water marketer in the United States, has slowed down on not only some of his alternative energy (notably wind power) projects but on water rights projects as well.

Primary cause: Pressures developed through weaknesses in the economy.

The article reported, “Pickens owns more water than any other individual in America. For several years he has been buying up the rights to underground water in the Texas Panhandle with the idea that he could one day pipe it to Dallas, some 250 miles southeast. Pickens’ Dallas-based Mesa Power had hoped to use the extraordinary power of eminent domain to force landowners along the proposed route to allow him to lay water pipes and erect the power lines to transmit electricity from the wind farm. But that didn’t work out. Last August, legislation that gave Pickens the right to seize land ran afoul of the Justice Dept. And by then landowners had made their concerns known to Pickens. He suspended construction of the pipeline in September but continued to make the case for wind power.”

[Business Week, July 8]

David Dempsey, a writer for the environmental group Conservation Minnesota, contends in a June 28 op-ed for the Minneapolis Tribune that in spite of the new Great Lakes compact, water in bulk could be privatized and sold from the lakes.

“The compact originated from a Canadian firm’s proposal in 1998 to export 50 tankers per year of Lake Superior water to Asia,” he writes. “The Great Lakes states and many citizens worked to prevent the commercialization of the lakes. But they didn’t succeed. While it is now illegal to export 50 tankers per year of Lake Superior water without the permission of the governors of every Great Lakes state, it is perfectly legal to export 50 tankers per year of bottles or other containers holding Lake Superior water with no interstate approval.”

He points out that Texas businessman T. Boone Pickens has made a large-scale market in Texas of water rights, some of which he has sold to local communities.

Dempsey’s prescription:

Correct the oversight in Minnesota’s and other Great Lakes states’ laws that fails to reaffirm water as a public resource that cannot be privately owned, any more than the air can.

Enact a congressional resolution expressing the policy of the U.S. House, Senate and president that the Great Lakes Compact cannot be interpreted or used by any party to claim private water ownership.

For years, businessman T. Boone Pickens and the water company he owns, Mesa Water, have bought volumes of water rights in the Texas Panhandle. Now he is fielding inquiries from locals: Will you sell?

The Canadian River Municipal Water Authority is reportedly interested in buying out as much as 200,000 acre-feet from Pickens. That could nearly double the authority’s holdings.

No immediate word of whether Pickens is willing to sell. [ProNews7 Amarillo, April 8]

A just-published background article in Forbes online declares businessman T. Boone Pickens as the largest owner of groundwater rights in the United States.

A passage: “Pickens, 80, is also the largest private holder of permitted groundwater rights in the U.S. through Mesa Water, Inc. Pickens hopes to acquire the rights to sell 320,000 acre-feet of water annually to Texas municipalities, satisfying the annual needs of approximately 1.5 million Texans. Selling as much water as Mesa could pump would result in $165 million worth of water to Dallas each year.”

Some years ago Texas oilman T. Boone Pickens bought rights to ground water – a lot of it, about 200,000 acre-feet – around the often-parched Panhandle area through his Mesa Water Company, with the idea of selling it. It’s never been sold. Now, as drought conditions hit in some areas around the Panhandle, some Texas officials are looking at that water as a potential resource.

Kent Satterwhite, Canadian River Municipal Water Authority general manager, told the Lubbock Avalanche Journal that “With the current situation at Lake Meredith, I think CRMWA should be open to all options for water supply sources. We haven’t heard from Mesa and haven’t approached them about their water rights for several years. If Mesa has an interest in selling their water in place, we would listen to them or any other water rights holder.”

The city of Lubbock is among 11 cities in the Canadian’s system.

Pickens had considered shipping the water to such thirsty cities as Dallas and San Antonio, but efforts to deliver to those areas have bogged down and may have collapsed.