Relaxed Groundwater Restoration Standards at In-Situ Uranium Leach Mines in South Texas

The above is a diagram of an in-situ uranium leach mine.

Before you read any further, I recommend that you download THIS report.

In 2008, I was retained by the law firm of Blackburn & Carter to conduct an evaluation of the Texas Commission on Environmental Quality's record of granting relaxed standards for the restoration of groundwater at in-situ uranium mines in South Texas. Many people are not aware that Texas is a major producer of uranium. The uranium ore is not characteristically considered "high grade," but in-situ mining technology (which owes much of its development to work in Texas) has proved to be efficient enough to make medium-to-low-grade deposits profitable to exploit.

Texas' prominence as a producer of uranium is traceable to the widespread prevalence of uranium roll-front deposits in the formations of the Gulf Coastal Plain. All are exploited by in-situ mining technology. For an explanation of in-situ leach mining, read Chapter 2 of THIS report by Gavin Mudd. For a somewhat more positive description, read THIS web page by the World Nuclear Association.

Rather than describe the geology and geochemistry of roll-front deposits and the methods of in-situ leach mining, I will assume that the reader is sufficiently interested in the matter to peruse the above references carefully before proceeding with this blog post.

What did my client want to know?

My client commissioned the report to find out whether one of the principal environmental regulatory agencies of Texas was fair-minded in its consideration of requests by uranium mining companies with respect to petitions for relaxed (that is, less stringent) restoration standards of groundwater at in-situ mined sites in the uranium ore trend of South Texas.

The basis for the requested study was the client's concern that the Office of Underground Injection Control of TCEQ might be overly generous in its granting of requests for lower restoration standards.

What did I find? Try THIS web page for a reasonable summary of my report. I will let the reader make up his/her own mind, based on the report.

Allow me to point out here that I am not opposed to mining or to nuclear energy. Look around and then ask yourselves how much of what you see cannot be traced to mining? Not much, I assure you. That, however, does not give mining companies Carte Blanche to pollute groundwater, surface water, soil, air. And in this so-called " anthropogenic greenhouse world" (I have my doubts), nuclear energy can play a major role in reducing the concentration of CO2 in the atmosphere.

I know the geochemistry of uranium very well, thank you; and I am convinced that we can extract uranium from roll-front and other sandstone-hosted deposits without leaving a mess for others to clean up ... but you can't do it "on the cheap."


Best Regards,


aquadoc
Southwest Groundwater Consulting, LLC

No. 7: Rule of Capture, Economic Inefficiency, and Water Market Requirements

The above figure shows the extent and major subdivisions of the great Edwards Aquifer of Central Texas. Why is a blog post on the Rule of Capture and Economic Inefficiency preceded by a map of the Edwards? The aquifer is a prominent factor in two of three references cited below.

Recently, an attorney who specializes in environmental law wrote to inquire about an observation I have often made that the Rule of Capture (ROC) is an impediment to the development of efficient water markets in Texas. I wrote back to tell him that my observations were based on the following: (1) Documented sales and leases of southern Edwards Aquifer groundwater rights compared with sales and leases of groundwater in ROC areas of the State, and (2) economic theory. Data supporting Point No. 1 will be developed and posted within a couple of weeks. (I am putting together a PowerPoint presentation on groundwater transactions for the Texas Bar Association's April 2009 Conference on Water Rights. The presentation is intended to illustrate that the development of a robust market for Edwards water rights evolved only after the approval of legislation that made it possible for landowners with property overlying the southern Edwards Aquifer region to be granted transferable permits to groundwater by the Edwards Aquifer Authority. A second components of the presentation will be to demonstrate that market values of Edwards water rights have far outstripped the market values of groundwater transactions in areas of the State where rights to groundwater have not been recognized and assigned.) Point No. 2 (the role of economic theory) can be found in one form or another in a variety of papers, especially those dealing with water economics and water marketing. It is Point No. 2 that is the focus of this post.

In my response to the attorney, I cited a concise summary of problems underlying the ROC, as found in Chapter 9 ("Protecting the Edwards Aquifer: an Efficient and Ecological Alternative," authors - Ben F. Vaughn IV and Peter M. Emerson) of Water Marketing - the Next Generation (eds. Terry L. Anderson and Peter J. Hill; Rowman & Littlefield Publishers, Inc., Lanham, Maryland, 1997). The nine chapters of the book are designed (according to a summary on the back cover) to "demonstrate why antiquated government regulations inadvertently encourage the waste of our most vital resource by preventing the evolution of property rights to water marketing." Antiquated government regulations can mean absolute control by the State or a free-for-all system with no provisions for assigning and enforcing well-defined rights to groundwater and/or surface water. In Chapter 9, Vaughn and Emerson propose a market-based solution, rather than one based on heavy-handed regulation by the State or a continuation of the ROC to the management of one of Texas' most significant aquifers.

The Edwards Aquifer is a major source of water for cities (the largest of which is San Antonio), agriculture, springs, streams, recreation, and unique fauna and flora in Central Texas. Scarcity caused by overuse of the aquifer and drought is a matter of concern to all who rely on the Edwards.

It is the opinion of Vaughn and Emerson that any management system that fails to address the problem of scarcity is inadequate to ensure that water will be available when and where it is most needed. Landowners should be granted quantifiable, secure and transferable rights to groundwater; and the State should encourage marketing as a means of allowing groundwater to "flow" to higher valued end-uses. Regulations that prohibit transboundary transfers of groundwater or that compel landowners to restrict the use of groundwater to support "traditional" uses of water are causes of inefficiency and devaluation. In similar fashion, a system based on the English doctrine of Absolute Ownership (e.g., the ROC) promotes inefficiency and devaluation. With regard to the ROC, Vaughn and Emerson write:

The property right in Texas groundwater is the common law rule of capture. Under this law, a landowner has the right to pump an unlimited quantity of water from any aquifer underlying his land (Todd, 1992). The landowner, however, has no right to the water until it is withdrawn from the aquifer. Furthermore, he has no right to protection against well interference or aquifer depletion by any other user and he has no right to pump water for the purpose of storing it for future use. This rule applies throughout the state, with the exception of aquifers included in groundwater districts and certain protection against damage from subsidence caused by groundwater pumping. Also, in Texas groundwater may be pumped for sale to a third party whose use is not on the overlying tract.

This system works well enough when water is not scarce, but with scarcity and no social or legal limits on water use, a "tragedy of the commons" arises. Economic rent associated with water is dissipated, and overexploitation of the resources results as all pumpers race to exercise their rights. Increased pumping costs caused by a declining water level eventually impose a limit on extraction in a deep aquifer. In a shallow aquifer, however, the problems may be more serious, resulting in permanent depletion of the aquifer, the intrusion of poor quality water, and land subsidence.

The problem is that under the common law rule of capture, the property right lacks the characteristics - the rights to use, exclude, and transfer - needed for efficient allocation of resources. The right to use is secured only by contemporaneous use, but there is no right to exclude other users. Hence, the ability to transfer is constrained by one's ability to capture the good before others do. Under these conditions, a market cannot develop nor will water be used efficiently.

The failure of the ROC to form the basis of an efficient system of groundwater marketing is further explained by Kaiser and Phillips (1998):

Water markets differ from other natural resource commodity markets for a variety of reasons, including the long tradition of subsidized water, the concentration of large amounts of public water held by private entities, the equally long tradition that water must support a wide variety of collective public values and the distribution impacts on parties who are not part of the decision process. Thus, unregulated markets do not exist for water transfers, as transfers are directed and controlled by state regulatory agendas. In reality, water transfers more often resemble diplomatic negotiations than simple commodity transactions.

Water markets develop when a combination of economic, legal, institutional and technical factors converge so that buyers can obtain a more certain, consistent and predictable water supply relative to other options and sellers realize greater net benefits by transferring the water than by keeping it in an existing use. The classic economic rationale of gains from trade motivates most water transfers, however, legal, institutional and technical barriers can vitiate transfers.

Finally, R.C. Griffin cuts to the quick in his discussion of The Instruments of Water Marketing (see Chapter 7 [7.1] of Water Resource Economics - the Analysis of Scarcity, Policy, and Projects with the following:

Water markets are enabled by the full or partial adjudication of natural water resources among agents, with the crucial characteristic of transferability included. As long as individual agents possess private property in natural water, they will be able to exchange water for money or other property. Ideally, these rights are severed from the land on which they are originally used, meaning that water can be exchanged separately from land. Such water rights are necessarily quantified, so that a solid basis is established for monitoring water use and enforcing water rights. Unless enforcement is consistent and accurate, water rights can be circumvented, and the incentive to trade will be injured. People don't buy things that can be readily taken from them or that "can be had for the taking."

To be continued in Post No. 8.

Best Regards,

aquadoc
Southwest Groundwater Consulting, LLC

No. 6: Groundwater Management in Texas

It's March 6th. Remember the Alamo!

While outlining the posts to follow my discussion of negative externalities associated with the Rule of Capture and the need to protect a landowner's claim to the groundwater beneath his property through the assignment of well-defined, enforceable, and transferable groundwater rights, I received email from an acquaintance calling my attention to a new publication by the Austin office of the Environmental Defense Fund: Down to the Last Drop (2009 Update: Spotlight on Groundwater Management in Texas). The authors of the report are Laura Brock Marbury and Mary E. Kelly.

I have not read the document thoroughly (I'll get to it soon), although several topics stand out such that the authors' opinions appear to be very close to mine. The first is that surface water and groundwater are not independent of each other and that proper water-resource management should consider the interconnectivity between both sources of water. We tend to divide the field of hydrology into "surface water" and "groundwater," and - because of that division - many politicians, planners, hydrogeologists, and surface water hydrologists often don't think of the many factors that link one with the other.

Streams and lakes are fed by groundwater, and vice versa. Hence, how we choose to manage one part of the surface water/groundwater system might very well have significant implications for what happens to the other. A couple of examples:

(1) Pumping excessive volumes of groundwater might lead to diminished flow to streams or to the cessation of springflow; and

(2) Diverting or impounding surface water might cause reduced recharge of aquifers.

Suffice it to say that it is important to understand how the two are interconnected within a hydrologic basin in order to avoid unintended consequences.

The second point of interest in Down to the Last Drop is the matter of groundwater planning, especially problems associated with Groundwater Management Areas (GMAs)and the Legislature's requirement that each of the 16 GMAs identify Desired Future Conditions (DFCs) for aquifers within their respective jurisdictions. Marbury and Kelly point out that the current approach to establishing DFCs does not require that "future conditions be physically measureable either directly or through an alternative measureable metric." They go on to make a case that "The rules should also require the GMAs to establish protocols for monitoring groundwater resource conditions to ensure that present conditions are consistent with established desired future conditions. Individual groundwater district management plans should also be amended to incorporate applicable metrics for the aquifer under their jurisdiction."

I have heard enough discussion, from representatives of Groundwater Conservation Districts, about DFCs to have concluded long before now that implementing recommendations such as those suggested by Marbury and Kelly would clear up much of the confusion surrounding DFCs by making the process based less on guesswork than on a firm understanding of current conditions and the development of a system (or systems) to measure key indicators of hydrologic conditions within a GMA to determine whether the desired conditions can be achieved. Frankly, some of the DFCs with which I am familiar do not make sense. More about that later.

Suffice it to say that water planning is an evolving process in Texas. Prior to the passage of Senate Bill 1 in 1997, the State lacked an orderly program to guide the development and management of groundwater and surface water resources. Texas is now in the second decade of water planning, and I expect that it will require more time to resolve major differences of opinion and to formulate strategies to ensure that water will be available to all sectors of the State's economy over the next 50 years. If I have learned anything about the pace of water planning in Texas, it is the following: Don't expect too much too soon. Texas has embraced the Rule of Capture (ROC) for many decades; and for as much as I regard that doctrine to be one that promotes inefficiency and devaluation of groundwater, I think that Texas will eventually reach a point at which, through statewide water planning, the ROC will give way to another more sensible doctrine that embraces the role of market-based solutions in the management of water resources.

Best Regards,

aquadoc
Southwest Groundwater Consulting, LLC