An empirical investigation of institutional change in groundwater management in Texas: The Edwards Aquifer case

Natural Resources Journal

Volumn 47, Issue 1, 2007, Pages 117-163

  Boadu, Fred O ^a   McCarl, Bruce M ^a   Gillig, Dhazn ^a  

^a TEXAS A AND M UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

AQUIFER; EMPIRICAL ANALYSIS; GROUNDWATER; INSTITUTIONAL REFORM; WATER MANAGEMENT; WATER PLANNING; WATER USE;

EDWARDS AQUIFER; NORTH AMERICA; TEXAS; UNITED STATES;

EID: 35348999085     PISSN: 00280739     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (215)

1. Feeny states that "the traditional three pillars of economic theory - endowments, technologies, and preferences - are incomplete. The fourth and implicit pillar is institutions." David Feeny, The Demand for and Supply of Institutional Arrangements, in RETHINKING INSTITUTIONAL ANALYSIS AND DEVELOPMENT: ISSUES, ALTERNATIVES, AND CHOICES 159, 159 (Vincent Ostrom et al. eds., 1988).
2. Oliver Williamson has discussed the role of institutions in a market economy extensively. See OLIVER E. WILLIAMSON, THE ECONOMIC INSTITUTIONS OF CAPITALISM (1985).
3. Bromley goes to great lengths to make distinctions between institutions as organizations and as rules of the game. DANIEL W. BROMLEY, ECONOMIC INTERESTS AND INSTITUTIONS: THE CONCEPTUAL FOUNDATIONS OF PUBLIC POLICY 22-23 (1989).
4. "One of the primary shortcomings of the model of induced institutional innovation arises over the treatment of institutions as both rules of organizations, and as the organizations themselves." Id. at 27.
5. See Lance Davis & Douglass North, Institutional Change and American Economic Growth: A First Step Towards a Theory of Institutional Innovation, 30 J. ECON. HIST. 131, 132 (1970).
6. This phrase was coined by John R. Commons, who defined institutions as "collective action in restraint, liberation, and expansion of individual action." BROMLEY, supra note 2, at 43.
7. For an analysis of institutional change in a historical context, see DOUGLASS C. NORTH & ROBERT PAUL THOMAS, THE RISE OF THE WESTERN WORLD: A NEW ECONOMIC HISTORY (1973).
8. For contributions in a law and economics context, see A. ALLAN SCHMID, PROPERTY, POWER, AND PUBLIC CHOICE: AN INQUIRY INTO LAW AND ECONOMICS (1987)
9. and Gary D. Libecap, Economic Variables and the Development of the Law: The Case of Western Mineral Rights, 38 J. ECON. HIST. 338 (1978).
10. Ina series of case studies of how different societies designed institutions to deal with problems of resource depletion, Elinor Ostrom concluded, The primary substantive lesson from these cases is that it is possible for humans to break out of the logic that yields a tragedy of the commons and to restructure the situation itself. Thus it is important for policy analysts to recognize the difference between making assumptions during an analysis and presuming these assumptions are immutable. There cannot be" one best way" of organizing the management of natural resource systems.
11. Elinor Ostrom, Institutional Arrangements and the Commons Dilemma, in RETHINKING INSTITUTIONAL ANALYSIS AND DEVELOPMENT, supra note 1. at 101, 119.
12. This study will not be the first to examine the issue of institutional changes in the context of groundwater resources. E.g., Ostrom, supra note 6, at 108-11 (providing a case study of institutional changes within the West basin in California).
13. For a review of groundwater laws and regulations, see BONNIE COLBY SALIBA & DAVID B. BUSH, WATER MARKETS IN THEORY AND PRACTICE: MARKET TRANSFERS, WATER VALUES, AND PUBLIC POLICY (1987).
14. Davis and North have suggested that a useful model of institutional innovation must be able to predict two kinds of things: (1) Given any established set of institutions and some disequilibrating force, the model ought to predict whether the newly emerging institutions will be purely individual, involve some form of voluntary cooperation, or rely on the coercive power of government; (2) It should provide some estimate of the period of time that is likely to elapse between the initiating disequilibrium and the establishment of the new (or mutated) institutions. Davis & North, supra note 3, at 132.
15. See infra note 128.
16. The Edwards Aquifer extends 180 miles from Brackettville in Kinney County to Kyle in Hays County. Edwards Aquifer Authority, Our Aquifer: History, http://www.edwardsaquifer.org/pages/history.htm (last visited Mar. 8, 2007). The counties are Atascosa, Bexar, Caldwell, Comal, Guadalupe, Hays, Medina, and Uvalde. Edwards Aquifer Authority Act art. 1, § 1.02(a), 1993 Tex. Gen. Laws 2350, 2351.
17. S. CENT. TEX. REG. WATER PLANNING GROUP, SOUTH CENTRAL TEXAS REGIONAL WATER PLANNING AREA: REGIONAL WATER PLAN 2-12 (2001) (total municipal use in the South Central Region in 1990 was 318,495 acre-feet per year (afy) and is projected to increase to 769,523 afy by 2050).
18. Lonnie L. Jones et al., Economic Impacts of Edwards Aquifer Pumping Restriction Alternatives to Meet Habitat Conversion Plan Requirements 8-9 (Mar. 15, 2001) (unpublished manuscript, on file with author).
19. Compiled by the author based on data from TEX. AGRIC. EXTENSION SERV., DISTRICT 10: ESTIMATED VALUE OF AGRICULTURAL PRODUCTION AND RELATED ITEMS, 1997-2000, 2001 PROJECTED (2001),
20. and TEX. WATER DEV. BD., WATER FOR TEXAS (1990).
21. Gross regional product (GRP) refers to the total value of all goods and services produced in the region in a given year.
22. Jones et al., supra note 12, at 42.
23. Ben F. Vaughan IV & Peter M. Emerson, Protecting the Edwards Aquifer: An Efficient and Ecological Alternative, in WATER MARKETING - THE NEXT GENERATION 167, 168 (Terry L. Anderson & Peter J. Hill eds., 1997). The Edwards-dependent species are listed and defined at 50 C.F.R. §§ 17.11, 17.12 (2005).
24. Letter from Dianne Wassennich, President, San Marcos River Foundation, to Fred Boadu, Professor of Agricultural Economics, Texas A&M University (Jan. 31, 2002) (on file with author).
25. Aquifer discharge consists of ground water that is pumped from the aquifer through wells and water that is discharged naturally as spring water.
26. Gregg Eckhardt, Glossary of Water Resource Terms, EDWARDS AQUIFER WEBSITE, http://www.edwardsaquifer.net/glossary.html#R (last visited Mar. 8, 2007).
27. ROBERT A. COLLINGE ET AL., TEX. WATER RESOURCES INST. REPORT No. TR-159, THE EDWARDS AQUIFER: AN ECONOMIC PERSPECTIVE 1 (1993), available at http:twri.tamu.edu/reports/1993/tr159/tr159.pdf.
28. The Living Waters Artesian Catfish Farm was opened by Ron Pucek in Bexar County in 1991. The farm was pumping enough water to support about 250,000 households. The City of San Antonio was forced to purchase Pucek's water rights for $9 million in order to protect the aquifer and have water available for use by households. Gregg Eckhardt, Ron Pucek's Living Waters Catfish Farm, EDWARDS AQUIFER WEBSITE, http://www.edwardsaquifer.net/pucek.html (last visited Mar. 8, 2007).
29. The Texas Water Code states, (a) The water of the ordinary flow, underflow, and tides of every flowing river, natural stream, and lake, and of every bay or arm of the Gulf of Mexico, and the storm water, floodwater, and rainwater of every river, natural stream, canyon, ravine, depression, and watershed in the state is the property of the state. (b) Water imported from any source outside the boundaries of the state for use in the state and which is transported through the beds and banks of any navigable stream within the state or by utilizing any facilities owned or operated by the state is the property of the state. TEX. WATER CODE ANN. § 11.021 (Vernon 1999).
30. "The right to the use of state water may be acquired by appropriation in the manner and for the purposes provided in this chapter. When the right to use state water is lawfully acquired, it may be taken or diverted from its natural channel." Id. § 11.022.
31. "The ownership and rights of the owners of the land and their lessees and assigns in groundwater are hereby recognized, and nothing in this code shall be construed as depriving or divesting the owners or their lessees and assigns of the ownership or rights, subject to rules promulgated by a district." Id. § 36.002.
32. The Supreme Court of Texas stated the English Rule as follows: That the person who owns the surface may dig therein, and apply all that is there found to his own purposes, at his free will and pleasure; and that if, in the exercise of such right, he intercepts or drains off the water collected from the underground springs in his neighbor's well, this inconvenience to his neighbor falls within the description of damnum absque injuria, which cannot become the ground of an action. Houston & Tex. Cent. Ry. Co. v. East, 81 S.W. 279, 280 (Tex. 1904) (quoting Acton v. Blundell, (1843) 152 Eng. Rep. 1223 (Ex.)). Texas's adoption of the English Rule was reaffirmed in City of Corpus Christi v. City of Pleasanton, 276 S.W.2d 798, 800-01 (Tex. 1955).
33. City of Corpus Christi, 276 S.W.2d at 801.
34. S.W.2d 21 (Tex. 1978).
35. Referring to its own previous ruling, the Supreme Court of Texas stated, At a time when the trend in other jurisdictions was away from the English rule and toward the "reasonable use" rule, the English rule was reaffirmed by this Court in City of Corpus Christi v. City of Pleasanton. The Court said, "With both rules before it, this Court in 1904, adopted, unequivocally, the 'English' or 'Common Law' rule." The opinion in the case shows quite clearly that the court weighed the merits of the two rules - "The practical reasons upon which the courts base their conclusions [applying the 'English' rule] fully meet the more theoretical view of the New Hampshire Court [applying the 'American' rule] and satisfy us of the necessity of the doctrine" - and, whether wisely or unwisely, made a deliberate choice. Id. at 26 (citations omitted) (alterations in original).
36. "The rule has been relied upon by thousands of farmers, industries, and municipalities in purchasing and developing vast tracts of land overlying aquifers of underground water." Id. at 29.
37. "Reliance is, simply, the opportunity cost of the broken promise." CHARLES J. GOETZ, CASES AND MATERIALS ON LAW AND ECONOMICS 257 (1984). A sudden change in the rule would have imposed detrimental reliance costs on the farmers, ranchers, industries, and households that have made water consumption decisions based on the long-standing rule.
38. This case, however, gives the Court its first opportunity to recognize, and to encourage compliance with, the policy set forth by the Legislature and its regulatory agencies in an effort to curb excessive underground water withdrawals and resulting land subsidence. It also affords us the opportunity to discard an objectionable aspect of the court-made English rule as it relates to subsidence by stating a rule for the future which is more in harmony with expressed legislative policy. We refer to the past immunity from negligence which heretofore has been afforded ground water producers solely because of their "absolute" ownership of the water. Friendswood Dev. Co., 576 S.W.2d at 29.
39. Id. at 26.
40. TEX. CONST. art. XVI, § 59. One commentator has made an observation about the incidence of droughts and legislative response: Texas water law has evolved within a pattern of key litigation and legislation following major droughts. For example, after the 1996 drought, the Texas Legislature passed Senate Bill 1 in 1997. The Texas Water Development Board is the agency leading the effort to plan for future water supply needs of the state in line with this legislation.
41. Todd H. Votteler, WATER: The Drought of Record, the Edwards Aquifer, and San Antonio's Water Future, BUSINESS S.A., Sept. 1998, at 5, 7.
42. The Glossary of Meteorology defines droughts as "periods of abnormally dry weather sufficiently prolonged for the lack of water to cause a serious imbalance in the affected area." AM. METEOROLOGICAL SOC., GLOSSARY OF METEOROLOGY (1959). Article XVI, section 59(a) of the Texas Constitution was enacted in response to the droughts of 1910 and 1917.
43. See also Votteler, supra note 32 (discussing "droughts of record").
44. See Votteler, supra note 32 at 7.
45. See generally Gregg Eckhardt, Laws and Regulations Applicable to the Edwards Aquifer, EDWARDS AQUIFER WEBSITE, http:// www.edwardsaquifer.net/rules.html (last visited June 11, 2007).
46. Id. ("However, [the EUWD] had no authority to restrict groundwater pumping, and for over 40 years it was mainly a data collection agency.").
47. See Linda L. Putnam & Tarla Peterson, The Edwards Aquifer Dispute: Shifting Frames in a Protracted Conflict, in MAKING SENSE OF INTRACTABLE ENVIRONMENTAL CONFLICTS 127, 130-31 (Roy Lewicki et al. eds., 2002) ("In the words of one environmentalist...:'The EUWD did not have the regulatory authority that even some other groundwater districts had to be able to manage withdrawal of water from the aquifer. They had many conflicting interests-political interests in San Antonio, agricultural interests in Uvalde and Medina, and springs interests in Hays and Comal counties-and no overall mechanism to reach any conclusions about how the aquifer should be managed. So it was pretty chaotic.'").
48. The EUWD was created to "manage, conserve, preserve, and protect the aquifer and to increase the recharge of and prevent the waste or pollution of water in, the aquifer." Edwards Aquifer Authority Act § 1.08(a), 1993 Tex. Gen. Laws 2350.
49. Sierra Club v. Lujan, 36 ERC 1533, 1993 U.S. Dist. LEXIS, 3361,42, No. MO-91-CA-069, 1993 WL 151353, at 34 (W.D. Tex. Feb. 1, 1993).
50. See Eckhardt, supra note 35 (suggesting that the implementation of the court's plan would mean that the federal government would be in charge of the aquifer).
51. Edwards Aquifer Authority Act, 1993 Tex. Gen. Laws 626.
52. "A conservation and reclamation district to be known as the Edwards Aquifer Authority is created in all or part of Atascosa, Bexar, Caldwell, Comal, Guadalupe, Hays, Medina, and Uvalde counties. A confirmation election is not necessary. The authority is a governmental agency and a body politic and corporate." Edwards Aquifer Authority Act art. 1, § 1.02(a) "[The] authority is created under and is essential to accomplish the purposes of Article XVI, Section 59, of the Texas Constitution." Id. art. 1, § 1.02(b).
53. See also supra notes 23 and 24 for the proposition that changes in laws regulating the use of ground water in the State of Texas axe the responsibility of the legislature.
54. See infra Part II of this article for a detailed analysis of the EAAA and the demise of the EUWD, a parent institution to the Edwards Aquifer Authority. Edwards Aquifer Authority Act art. 1, § 1.41.
55. The ownership and rights of the owner of land and the owner's lessees and assigns, including holders of recorded liens or other security interests in land, in underground water and the contract rights of any person who purchases water for the provision of potable to the public or for the resale of potable water to the public for any use are recognized.... Edwards Aquifer Authority Act art. 1, § 1.07.
56. "Except as provided by Sections 1.17 and 1.33 of article 1, a person may not withdraw water from the aquifer or begin construction of a well or other works designed for the withdrawal of water from the aquifer without obtaining a permit from the authority." Id. art. 1, § 1.15 (b).
57. "[F]or the period ending December 31,2007, the amount of permitted withdrawals from the aquifer may not exceed 450,000 acre-feet of water for each calendar year." Id. art. 1, § 1.14 (b);
58. "[F]or the period beginning January 1, 2008, the amount of permitted withdrawals from the Aquifer may not exceed 400,000 acre-feet for each calendar year." Id. art. 1, § 1.14 (c).
59. [B]y June 1, 1994, the authority...shall implement and enforce water management practices, procedures, and methods to ensure that, not later than December 31, 2012 the continuous minimum springflows of the Comal Springs and the San Marcos Springs are maintained to protect endangered and threatened species to the extent required by Federal law. Id. art. 1, § 1.14(h).
60. A permit holder may lease permitted water rights, but a holder of a permit for irrigation use may not lease more than 50 percent of the irrigation rights initially permitted. The user's remaining irrigation water rights must be used in accordance with the original permit and must pass with transfer of the irrigated land. Edwards Aquifer Authority Act art. 1, § 1.13(c).
61. The first attempt to form the Edwards Underground Water District was in 1955.
62. The description of the various models of institutional change is based largely on BROMLEY, supra note 2,
63. and Feeny, supra note 1.
64. Harold Demsetz is generally credited with articulating the theory of property rights. As he explained it, Changes in knowledge result in changes in production functions, market values, and aspirations. New techniques, new ways of doing the same things, and doing new things-all invoke harmful and beneficial effects to which society has not been accustomed....[T]he emergence of new property rights takes place in response to the desires of the interacting persons for adjustment to new benefit-cost possibilities....[P]roperty rights develop to internalize externalities when the gains of internalization become larger than the cost of internalization. Harold Demsetz, Toward a Theory of Property Rights, 57 AM. ECON. REV. 347,350 (1967);
65. see also RICHARD POSNER, THE ECONOMICS ANALYSIS OF LAW (2d ed. 1977).
66. "The proper incentives [for economic efficiency] are created by the parceling out among the members of society of mutually exclusive rights to the exclusive use of particular resources" BROMLEY, supra note 2
67. (citing POSNER, supra note 50, at 10).
68. "It is of some importance to note that in the laws authorizing these regulatory Underground Water Districts and the Harris-Galveston Coastal Subsidence District, the Legislature specifically confirmed private ownership of underground water." See Friendswood Dev. Co. v. Smith-Sw. Indus., 576 S.W.2d 21, 27 (Tex. 1978).
69. See also Denis v. Kickapoo Land Co., 771 S.W.2d 235, 236 (Tex. App.-Austin 1989) ("groundwater percolating beneath the soil is the property of the owner of the surface who may, in the absence of malice, appropriate such water while on his premises and make whatever use of it as he pleases")
70. (citing City of Corpus Christi v. City of Pleasanton, 276 S.W.2d 798 (1955)).
71. At a water law conference held in Texas several years ago, the issue of property rights in ground water was discussed. One expert argued that [w]hat the landowner has absolute ownership of...is the water after he has removed it from the soil and reduced it to possession. How can the landowner be said to be the absolute owner of the ground water beneath the surface of his land if the law gives him no remedy whatsoever for the protection of that water against the acts of others?...[H]e does not even have any property interest. A.W. Walker, Jr., Theories of Ownership and Control of Oil and Gas Compared with Those of Ground Water, PROC. WATER LAW CONFERENCE, UNIV. OF TEX., 121, 125 (1956)
72. (quoted in WELLS A. HUTCHINS ET AL., THE TEXAS LAW OF WATER RIGHTS 572 (1961) (internal quote marks deleted).
73. Contra Joe R. Greenhill, Well Spacing, PROC. WATER LAW CONFERENCE, UNIV. OF TEXAS 146, 146 (1956) ("the owner of the surface does, with minor exceptions, own the water under it just as he owns the oil and gas")
74. (quoted in HUTCHINS, supra at 572) (internal quote marks deleted).
75. The following groups were generally in favor of retention of the rule of capture and filed amici in support of their position: City of Houston; Texas Council of Forest Products Manufacturers; Texas Water Conservation Association; Texas Groundwater Association; Texas Alliance of Groundwater Districts; Edwards Aquifer Authority; North Plains Ground Water Conservation District No. 2; American Land Foundation; Riverside and Landowners Protection Coalition; Texas Justice Foundation; Texas and Southwestern Cattle Raisers Association; Texas Cattle Feeders Association; Texas Association of Nurserymen, Inc.; and Texas Farm Bureau.
76. Amici generally in favor of abandonment of the rule of capture included Aqua Water Supply Corporation (AWSC), Environmental Defense Fund, and National Spring Water Association (NSWA). AWSC is a Texas non-profit corporation started in the 1970s when the U.S. Farm and Home Administration extended loans and grants to spur start-up water systems all over the United States to provide safe drinking water at reasonable prices to rural areas. Today AWSC serves rural residents in a 910-square mile area in six counties, including most of Bastrop, Lee, and Caldwell counties, and parts of eastern Travis, Fayette, and Williamson counties. See Aqua Water Supply Corporation, http://www.aquawsc.com/ (follow "About Us" hyperlink).
77. The NSWA was established in 1993. Its membership consists of natural spring owners, spring water bottlers, groundwater professionals, environmentalists, and interested members of the public. The main purpose behind forming the organization was to protect and encourage the protection of natural spring water resources and to promote the spring water business, encourage sustained resource management, and inform the public of the differences between true spring water and other waters. E-mail from Bill Miller, President, NSWA, to Fred Boadu, June 19,2007, 4:40 PM (on file with author).
78. E-mail from Todd Votteler, Ph.D., Executive Manager of Intergovernmental Relations and Policy, Guadalupe-Blanco River Authority, to author (Mar. 20,2002) (on file with author).
79. See Friendswood Dev. Co., 576 S.W.2d 21.
80. The TJF has been involved in several property rights litigations including Bragg v. Edwards Aquifer, 71 S.W.3d 729 (Tex. 2002), where TJF brought suit against the Edwards Aquifer Authority (EAA), claiming that EAA's denial of Bragg's pumping rights was unconstitutional and would put the clients out of business (the court found the EAA's well permitting rules void because the EAA failed to prepare a Taking Impact Analysis as required by the Texas Real Property Rights Preservation Act);
81. Davidson v. Babbitt, where TJF represented a couple denied the right to build a home on their land because of a golden cheeked warbler (couple finally is allowed to build a home);
82. Medearis v. Brazolia County Drainage District No. 4, Dist. Ct. Brazoria County, 149th Judicial Dist. Tex. (1995) (No. 95-M-2313), brought under the Texas Real Property Rights Preservation Act of 1995 (the court held that the drainage district had exceeded its authority and acted unconstitutionally by committing a taking under the Texas Constitution).
83. See The justice Foundation, www.txjf.org/ (go to "Landmark Cases," "Property Rights").
84. Putnam and Peterson have applied a model of conflict framing to the dispute over the Edwards Aquifer. Framing refers to how people interpret or make sense of experiences and the way they talk about what is most important or least important in a situation. The authors focused on identity and characterization framing. Identity framing refers to statements or phrases that reflect how the parties in a conflict describe their role, who they are, what is important to them, and how their identity becomes vested in the conflict. Characterization refers to the way that parties describe other people involved in the conflict - ways they see the others as positive, negative, or neutral. See Putnam & Peterson, supra note 37, at 150-58.
85. See id.
86. This description of the aquifer and water movement is based on Gregg Eckhardt, Hydrogeology of the Edwards Aquifer, EDWARDS AQUIFER WEBSITE, edwardsaquifer.net/geology. html#movement (last visited June 11, 2007).
87. Water, Farm Income Top Convention Issues, TEX. AGRIC., Dec. 15, 2000, http://www. txfb.org/TexasAgriculture/2000/121500water.htm (statements by delegates at the Texas Farm Bureau's 67th Annual Meeting).
88. Id.
89. Putnam & Peterson, supra note 37, at 139.
90. Id.
91. (citing SAN ANTONIO EXPRESS NEWS, Apr. 29, 1993).
92. Personal Communication with Greg Ellis, General Manager, Edwards Aquifer Authority (Jan. 10, 2002).
93. BROMLEY supra note 2, at 20
94. (citing Hayami & Ruttan).
95. When institutional change occurs to improve efficiency, at least one party (person initiating change) is made better off under the change but no one is made worse off. Where the outcome of institutional change is distributional, a party gains only at the expense of some other party. Id. at 28.
96. Id. at 29.
97. Id.
98. "The framework builds explicitly on the previous work of Davis, Hayami, North, Ruttan, and Thomas." Feeny, supra note 1, at 173,176;
99. see also BROMLEY, supra note 2, at 12, 14, 18-31 (the Hayami and Ruttan model [induced institutional change model] is discussed and critiqued extensively along with North and Thomas's Transaction Cost model).
100. The flexibility made possible by a general framework is especially useful for adaptation to specific circumstances. The framework is in effect consistent with the observations made in RETHINKING INSTITUTIONAL ANALYSIS AND DEVELOPMENT, supra note 1.
101. San Antonio's water needs are projected to double by the year 2050. The Edwards Aquifer will remain the main source of water for the foreseeable future. See SAN ANTONIO WATER SYSTEM, PLANNING OUR FUTURE FOR THE NEXT FIFTY YEARS, http://web.archive. org/web/20041012175657/ www.saws.org/our-water/future/ (last visited July 7, 2007).
102. Cf. Feeny, supra note 1, for the proposition that population increases that led to a decline in real wages combined with technological changes in machinery and fertilizer use that led to yield increases created disequilibria between harvest-share wage and prevailing agricultural wage, and consequently led to demand for institutional change to restore equilibrium.
103. Approximately 7,000 acre-feet of sustained yield is expected to be available through recharge by 2007 and roughly twice that amount over the longer term. Recycling of treated wastewater effluent for irrigation and industrial uses will provide 35,000 acre-feet of non-drinking water. Sustainable withdrawals from a portion of the Cow Creek formation of the Trinity Aquifer in northern Bexar County could add about 4,500 acre-feet per year. SAWS has acquired property in southeastern Bexar County for the Aquifer Storage and Recovery (ASR) project using the Carrizo Aquifer as a storage facility. Water would be injected into this sand-based aquifer during periods of rainfall excess and withdrawn during dry periods. This process will yield an additional 30,000 acre-feet. See SAN ANTONIO WATER SYSTEM, SHORTTERM WATER SURPLUS, http://web. archive.org/web/20041019113212/http://www.saws.org/our_water /future/short_term.shtml (last visited July 7, 2007).
104. Successful diversion from the lower part of the Guadalupe River basin near the Gulf Coast could yield approximately 60,000 to 70,000 acre-feet. The purchase and transfer of 150,000 acre-feet may be available to SAWS from the Lower Colorado River Authority (LCRA) at Bay City, while acquired ground water from the Simsboro Aquifer in Milam and Lee counties could yield about 55,000 acre-feet. Desalination of seawater is also being considered. See SAN ANTONIO WATER SYSTEM, LONG TERM WATER SUPPLIES, http://web.archive.org/web/ 20041019112354/http://www.saws.org/our_water/future/long-term.shtml (last visited July 7, 2007).
105. See San Antonio, Tex., Code 92753 (2000) (renumbered as §§ 34-1431 to 34-1439). This amends chapter 34 of the City Code of the City of San Antonio by adding a new article IX, Water Supply Fee; SAN ANTONIO WATER SYSTEM, QUARTERLY REPORT ON WATER RESOURCES (City of San Antonio), July-September 2005, available at http://www.saws.org/our_water/waterresources/watersupply/.
106. San Antonio water authorities expect a permit from the Edwards Aquifer Authority that would allow them to withdraw about 135,000 acre-feet of water per year through 2007 and 120,000 acre-feet per year thereafter. These withdrawals are to be supplemented with up to about 50,000 acre-feet of additional Edwards Aquifer pumping rights by purchase or lease of water rights from irrigators. For a summary of SAWS water pumpage and aquifer levels, see San Antonio Water System, http:// web.archive.org/web/ /http://www.saws.org/our_water/ future/short_term.shtml.
107. For example, using the base period 1990 to 1992, the All Farm Products Index of Prices Received by Farmers in October 2001 "dropped a record 10 points (9.5 percent) to 95 percent from the September Index." "On the other hand, the October Index of Prices paid by farmers for production inputs such as Commodities and Services, Interest, Taxes, and Farm Wage Rates (PPITW) was 123 parcent of the 1990-92 base period average. Prices paid by farmers represent the average costs of inputs purchased by farmers and ranchers to produce agricultural commodities." Jose G. Peña, Continuing Weak Agriculture Outlook Requires Careful Planning for Survival, 17 AG-ECO NEWS, Nov. 7, 2001, at 1.
108. Telephone interview with Jose Peña, Extension Economist, Uvalde County (Feb. 22, 2002).
109. See Edwardswater.com, http://edwardswater.com/.
110. Id.
111. LANCE E. DAVIS & DOUGLASS C. NORTH, INSTITUTIONAL CHANGE AND AMERICAN ECONOMIC GROWTH 6 (1971).
112. See Feeny, supra note 1, at 180, for a discussion of how the extension of suffrage in the 1800s (a change in constitutional rule) influenced demand for new institutional arrangements in the form of property rights to land and the resulting change in land holdings from a regime of large land ownership to a regime of small holdings.
113. For a detailed analysis of water districts in Texas, see FRANK F. SKILLERN, TEXAS WATER LAW 191-260 (1991).
114. Districts may regulate well spacing, enjoin wasteful water practices such as allowing water to flow into roadside ditches, and conduct public education programs. See RONALD A. KAISER, HANDBOOK OF TEXAS WATER LAW 32-33 (1986).
115. Putnam & Peterson, supra note 37, at 130
116. (citing N. Wolf, Mayor: An Inside View of San Antonio Politics, 1981-1985, SAN ANTONIO EXPRESS NEWS, 1997).
117. See also supra notes 32-34.
118. Putnam & Peterson, supra note 37, at 132.
119. Former Mayor of San Antonio Henry Cisneros described the plan developed by the EUWD management team as "the finest example of consensus building." Id.
120. (citing SAN ANTONIO LIGHT, July 29, 1988). It is notable that local control of water resources was also the position of the Texas Farm Bureau and most of the Parties that filed Amici in the Sierra Club Case.
121. See Correspondence from Greg Ellis, Edwards Aquifer Authority (Jan. 7, 2002) (on file with author).
122. Even though Article 1, Section 1.42 (a) of the Act repealed the EUWD, (b) through (e), read together, suggest that the Edwards Aquifer Authority is to be a successor agency to the EUWD.
123. The Supreme Court has articulated the constitutionally imposed requirements for associational standing. In Warth v. Seldin, 422 U.S. 490 (1975), the court held that [e]ven in the absence of injury to itself, an association may have standing solely as the representative of its members.... The association must allege that its members, or any one of them, are suffering immediate or threatened injury as a result of the challenged action of the sort that would make out a justiciable case had the members themselves brought suit....So long as this can be established, and so long as the nature of the claim and of the relief sought does not make the individual participation of each injured party indispensable to proper resolution of the cause, the association may be an appropriate representative of its members, entitled to invoke the court's jurisdiction.
124. Id. at 511.
125. See Hudson P. Henry, Case Note, A Shift in Citizen Suit Standing Doctrine: Friends of the Earth Inc. v. Laidlaw Environmental Services, 28 ECOLOGY L.Q. 233 (2001).
126. U.S. 555 (1992).
127. Id.
128. (citing Sierra Club v. Morton, 405 U.S. 727, 735, 739 (1972)).
129. Morton, 405 U.S. 727.
130. Henry, supra note 92, at 236-37.
131. Id. at 252.
132. Although the continuing compromise between private and public law models of standing and separation of powers issues remains a source of uncertainty, Laidlaw signifies a much more predictable and progressive citizen suit standing doctrine. After years of marginal usefulness, environmental citizen suits have been given new life. Id.
133. One FOE member, Kenneth Lee Curtis, averred that he lived near the facility and occasionally drove over the river. Curtis stated that he would like to "fish, camp, swim, and picnic in and near the river between 3 and 15 miles downstream from the facility." Friends of the Earth, Inc., 528 U.S. at 181-83. Other plaintiff group members attested to similar concerns.
134. See id. Citizens League for Environmental Action Now member Gail Lee averred that her home near Laidlaw's facility "had a lower value than similar homes located further from the facility, and that she believed the pollutant discharges accounted for some of the discrepancy."
135. Id.
136. In conversations with the Sierra Club's (Plaintiff) attorney, Mr. Stuart Henry, he pointed out that he could not foresee any existing standing rule that would have defeated Mr. Hubbs' credentials. Interview with Professor Clark Hubbs, Regents Professor Emeritus of Zoology, University of Texas, Austin (June 4, 2002).
137. See Feeny, supra note 1 (suggesting that the introduction of general laws of incorporation, especially limited liability laws, as a new institutional arrangement was in response to an expansion in the size of the market made possible through improved transportation and economies of scale due to technological advances and how the limited liability company made it possible to obtain capital for investment purposes from several individuals).
138. See id.
139. See id.
140. TEX. WATER CODE ANN. § 11.024 (Vernon 1983).
141. The series of lawsuits filed by the Sierra Club have all been concerned with the protection of the Edwards Aquifer-dependent species.
142. See infra Part III for further discussion of non-quantifiable benefits and costs in the jurisprudence of institutional change.
143. Recreational activities include boating, fishing, and birdwatching. LONNIE L. JONES & AYSEN TANYERI-ABUR, IMPACTS OF RECREATIONAL AND COMMERICIAL FISHING AND COASTAL RESOURCE-BASED TOURISM ON REGIONAL AND STATE ECONOMIES 7 (Tex. Water Resources Inst., TR-184, 2001).
144. Id. at 16.
145. The permit requests about 1.3 million acre-feet of water, an amount of water estimated by the Texas Parks and Wildlife to be what is needed to satisfy the biological needs of the Guadalupe estuary. The Foundation has also applied for 157,000 acre-feet to protect the San Marcos River. Kevin Carmody, Foundation Hopes to Protect Rivers with Water Rights, AUSTIN AM. STATESMAN, July 28, 2001, at B1. The Guadalupe River is an integral component of the Edwards region water market.
146. See Feeny, supra note 1, at 183 (the supply of institutional changes depends on the capability and willingness of the political order to provide new arrangements).
147. Id.
148. Here we have limited ourselves to those factors considered most critical in the Edwards Aquifer context.
149. S.W. 279 (Tex. 1904).
150. Because the existence, origin, movement, and course of such waters, and the causes which govern and direct their movements, are so secret, occult, and concealed[,] 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.
151. Id. at 281.
152. See HUTCHINS ET AL., supra note 53, at 564.
153. Denis v. Kickapoo Land Co., 771 S.W.2d 235, 236 (Tex. Ct. App. 1989) (writ denied). The subterranean watercourse must have the same characteristics as a surface watercourse - beds, banks forming a channel, and a current of water.
154. Id.
155. (citing C. KINNEY, A TREATISE ON THE LAW OF IRRIGATION AND WATER RIGHTS § 1195, at 2167 (2d ed. 1912)).
156. S.W.2d 21 (Tex. 1978). As heretofore mentioned, the Legislature has entered the field of regulation of ground water withdrawals and subsidence. This occurred after geologists, hydrologists, and engineers had developed more accurate knowledge concerning the location, source, and measurement of percolating underground waters, and after legislators became aware of the potential conflicts inherent in the unregulated use of ground water under the English rule of ownership.
157. Id. at 29.
158. WATERS AND WATER RIGHTS § 20.07(a), at 20-39 (Robert E. Beck ed., 1991) (2003 repl. vol.).
159. Denis, 771 S.W.2d 235.
160. The subterranean watercourse must have the same characteristics as a surface watercourse - beds, banks forming a channel, and a current of water. Id. at 236.
161. See In Re Adjudication of Rights to Water in the Edwards Aquifer, No. 89-0381 (Dist. Ct. Hays County 1989).
162. Robert Pressley, Alternative Legal Bases for Managing the Edwards Aquifer, 22 ST. B. TEX. ENVTL. L.J. 42, 46 (1991).
163. TEX. WATER CODE ANN. § 28.011 (Vernon 1993) ("Except as otherwise provided by this code, the commission may make and enforce rules and regulations for protecting and preserving the quality of underground water.").
164. See 31 TEX. ADMIN. CODE § 298 (1992) for the TWC Emergency rule declaring the Edwards Aquifer an underground stream, and 31 TEX. ADMIN. CODE § 298 (1992) for the permanent rules.
165. Knowledge of the unique characteristics of the Aquifer included (1) well-defined boundaries, (2) well-defined sources of water, (3) rapid flow in a well-defined direction, (4) well-defined destinations of the aquifer water to discharge at the springs, and (5) the presence of fish and other aquatic life. See Votteler, supra note 32, at 121.
166. See McFadin v. Tex. Water Comm'n, No. 92-05214 (Dist. Ct. Travis County 1992).
167. See Feeny, supra note 1 (comparing the cost of groundwater institutions in California that were designed by voluntary organizations and those in Arizona where the institutions were of a bureaucratic origin. Feeny concluded that the California system was cheaper.).
168. Interview with Greg Ellis, General Manager, Edwards Aquifer Authority (Jan. 7, 2002).
169. All enforcement proceedings under the Act are subject to the Administrative Procedure and Texas Register Act, TEX. GOV'T CODE ANN. ch. 2001 (Vernon 1988).
170. See Edwards Aquifer Authority Act § 1.37(r).
171. See Interview with Greg Ellis, supra note 127.
172. Edwards Aquifer Authority Act § 1.01.
173. See St. of Tex. Legis. Budget Board, Fiscal Note, 73rd Regular Sess. (1993) (memo from Jim Oliver, Director, to Honorable Bill Sims, Chair, Committee on Natural Resources (Tex. Senate Chamber) (May 10, 1993).
174. The 1990 costs for the key stakeholders were City of San Antonio ($371,000); San Antonio City Water Board ($272,000); the Guadalupe Blanco River Authority ($221,000); the Edwards Underground Water District ($173,000). See TWC Brokers Compromise in Edwards Aquifer Lawsuit, Legal Fees to $1 Million, 3 NEWWAVES (Newsl. of the Tex. Water Resources Inst.), Mar. 1990, at 9, 9-10. The source of the base estimate of $5 million is intentionally omitted.
175. This is obviously a very high figure but we chose to err on the side of caution and to deflect any implication of underestimation of what may be considered the "transaction costs" associated with the institutional change.
176. Between 1970 and 1993 when the Edwards Aquifer Bill was passed, there were over 50 major events organized by councils, local organizations, task forces, planning commissions, boards, and technical committees.
177. For example, the Corps of Engineers joined with GBRA in the construction of Canyon Lake and in 1974 Congress passed Public Law 93-943 authorizing the construction of Cibolo Reservoir. See SAN ANTONIO WATER SYSTEM, HISTORY & CHRONOLOGY, http://www.saws.org/who_we_are /chrono/chrono150.shtml (last visited Mar. 19, 2007).
178. Putnam described the debate over the Edwards Aquifer as "intractable," suggesting very high bargaining costs. Putnam & Peterson, supra note 37, at 158.
179. SAN ANTONIO WATER SYSTEM, supra note 135.
180. This model is referred to as The Edwards Aquifer Simulation Model (EDSIMR). See Dhazn Gillig et al., An Economic, Hydrologic, and Environmental Assessment of Water Management Alternative Plans for the South Central Texas Region, 33 J. AGRIC. & APPL. ECON. 59, 61-71 (2001).
181. Id. at 71.
182. Id. at 61.
183. HDR ENG'G, INC. & GERAGHTY & MILLER, INC., NUECES RIVER BASIN REGIONAL STUDY (technical report prepared for the Edwards Aquifer Underground Water District, San Antonio, Tex. 1993).
184. See USGS, http://water.usgs.gov/watuse/wudata.html (follow link to "USGS Water Use in the United States" and "Download 1995 data for counties and watersheds").
185. "EDSIMR operates across a ten-state representation of the probability distribution of recharge and associated precipitation ranging from very dry to very wet years." Gillig et al., supra note 138, at 62.
186. The years included, ordered from most dry to most wet, are 1956 (annual recharge at 43,758 acre-feet), 1951, 1963, 1989, 1952, 1996, 1974, 1976, 1958, and 1987 (annual recharge at 2,003,643 acre-feet).
187. Edwards Aquifer Authority Act art. 1, § 1.01 (2003).
188. Id. art. 1, § 1.34(c).
189. Id. art. 1, § 1.14(h).
190. Under the rule of capture, the "status quo" in Table 1, the model results yield a zero cubic-feet per second (cfs) flow in the Comal Spring.
191. The minimum springflow to avoid "take" in the Comal is 200 cfs, and the minimum to avoid "jeopardy" is 150 cfs. SAN MARCOS/COMAL RECOVERY TEAM & U.S. FISH & WILDLIFE SERV., SAN MARCOS & COMAL SPRINGS & ASSOCIATED AQUATIC ECOSYSTEMS (REVISED) RECOVERY PLAN 17 (1996).
192. Edwards Aquifer Authority Act art.1, § 1.01.
193. The reader may note that Calhoun County lies in the Guadalupe estuary, and what is referred to as the Calhoun estuary is part of the larger Guadalupe estuary. See LONNIE L. JONES & AYSEN TANYERI-ABUR, IMPACTS OF RECREATIONAL AND COMMERCIAL FISHING AND COASTAL RESOURCE-BASED TOURISM ON REGIONAL AND STATE ECONOMICS 7, 16 (Texas Water Resources Institute, TR-184, 2001).
194. SAWS is currently spending approximately $1.87 million per year on water lease payments. Interview with Gene Camargo, Water Resources Department, SAWS (Aug. 28, 2002).
195. Economic rent represents payments for water in excess of what would be necessary to get water permit holders to offer them to the marketplace. See BRIAN R. BINGER & ELIZABETH HOFFMAN, MICROECONOMICS WITH CALCULUS 455 (1985).
196. The deadweight loss from monopsony is due to losses in consumer and producer welfare as a result of having fewer than the optimal number of water transfers occurring in the Edwards region. Cf. definition of deadweight loss due to monopoly. See id. at 460.
197. See Edwardswater.com, http://EDWARDSWATER.com/.
198. Id.
199. These estimates are based on studies by the South Central Texas Regional Water Plan (SCTRWP). Other alternatives and corresponding per acre-foot costs are the Simsboro Aquifer ($707) (S. Central Tex. Region Water Supply Options, Option Data Sheet, Option No. SCTN-3c (Dec. 31, 1999));
200. Lower Guadalupe water ($788) (S. Central Tex. Region Water Supply Options, Option Data Sheet, Option No. SCTN-16b (Dec. 6, 1999));
201. Colorado River water ($677) (S. Central Tex. Region Water Supply Options, Option Data Sheet, Option No. C-17A (Nov. 2, 1999)). The group also estimated the price of water for irrigation purposes to be between $51 and $80 per acre-foot.
202. Bruce A. McCarl et al., Towards a Sustainable Water Policy in Texas: Developing Capacity to Evaluate Transfers (2006) (funded by the Texas Higher Educational Coordinating Board, Advanced Research/Advanced Technology Program and the Texas Agricultural Experiment Station).
203. With only minor wording changes, this appendix is reproduced from our earlier study, Gillig et al., supra note 138.
204. See McCarl et al., supra note 158.
205. HDR ENG'G, INC. & GERAGHTY & MILLER, INC., supra note 141.
206. See id.
207. See USGS, supra note 142.
208. TEX. WATER DEV. BD., SURVEYS OF IRRIGATION IN TEXAS 1958, 1964, 1969, 1974, 1979, 1984, 1989, 1994 AND 2000 (Report 347, 2001).
209. RICHARD A. ROSENTHAL, GAMS: A USER'S GUIDE (1992), available at http://www.gams.com/dd/docs/bigdocs/ GAMSUsersGuide_nolinks.pdf.
210. Ronald C. Griffin & Chan Chang, Seasonality in Community Water Demand, 16 W.J. AGRIC. ECON. 207 (1991);
211. S. Renzetti, An Economic Study of Industrial Water Demands in British Columbia, Canada, 24 WATER RES. RESEARCH 1569 (1988).
212. George B. Dantzig, Linear Programming Under Uncertainty, 1 MGMT. SCI. 197 (1955).
213. Griffin & Chang, supra note 166;
214. Renzetti, supra note 166.
215. McCarl et al., supra note 158.