Water Pipelines

To meet Texas water needs, Carlos Rubinstein, former chairman of the Texas Water Development Board once said “… we need to move water from where it is to where it is not.” We have seen this time and time again throughout history.

Look at the City of Los Angeles, California constructing the Los Angeles Aqueduct from Owens Lake to the city, a 233 mile pipeline, back in the early 20th century which depleted the Lake’s reserves by 1926.

The City of Midland, Texas drilling out Pecos Valley water wells in Loving County on the T-Bar Ranch and laid down 67 miles of pipe to move water to the city. While T-Bar Ranch has supplied the city with water, rumor has it that the wellfield is high in Arsenic and Midland may be exploring its Fort Stockton water rights. A pipeline moving groundwater from Fort Stockton to Midland may cost anywhere from $300MM to $400MM.

The most famous water pipeline has to be the Vista Ridge Pipeline Project. A development group negotiated 3,400 groundwater leases with surface owners in Burleson County. The development group drilled 18 wells 1,600’ to 2,600’ deep into the Carrizo and Simsboro Aquifers. The project can move 50,000 acre feet per year (equivalent to 31,000gpm or 1MMbpd) and cost $2.8 billion.

Large water users (i.e. municipalities) will continue to secure their water resources even at the expense of smaller communities. And as the saying goes, “Water is local”. The growing communities will have to exploit local resources (i.e. groundwater or surface water sources) or seek alternatives in nearby localities.

Water Trading as a service is just beginning. We have seen the oil industry create a sub-sector called Water Midstream to manage gathering, transportation, storage, treatment, and disposal of water in the industry. Expect to see commercial water activity become a critical component of growth for municipalities and industries. Hydro Futures