Cattlemen’s Column: The fight over produced water rights

     FORT WORTH, Texas (September 2, 2025) – On June 27, the Texas Supreme Court issued the long-awaited decision in Cactus Water Services LLC v. COG Operating LLC. The state’s landowners and ranchers hoped the court would recognize that groundwater, regardless of whether it’s clean drinking water or produced water as a result of oil and gas production, belongs to the surface owner. 

     Regrettably, the court got it wrong, once again ruling that groundwater brought up through the oil and gas production process is considered oil and gas waste and, therefore, belongs to the operator.

     The court’s decision to relinquish control of produced water to the oil and gas operator through a standard, pre-established lease is deeply disappointing. The ruling ignores property rights, undermines established Texas water law and sets a dangerous precedent for future groundwater rights.

     The groundwater beneath our feet is not waste, it is an asset. And landowners must be compensated fairly when that asset is used by others.

     This belief guided Texas & Southwestern Cattle Raisers Association in its consistent engagement throughout this case. Since 2020, our association has monitored the courts, submitting amicus briefs supporting landowners’ rights to uphold the long-held Texas legal and constitutional principle that the surface owner owns all groundwater. This ruling is not a minor technicality, but instead a fundamental misstep.

     Groundwater is not part of the mineral estate. It belongs to the landowner unless it has been expressly severed by contract. With this ruling, any typical oil and gas lease, even one that does not mention water, automatically gives the operator control over the produced water that surfaces with the oil and gas.

     We recognize that disposing of produced water carries costs, regulatory burdens and environmental responsibilities, which result from the oil extraction process. However, the court has somehow confused responsibility with ownership.

     While oil and gas operators have the responsibility to address the potential environmental impacts disposal of produced water may present, these issues do not change the ultimate ownership of produced water. As groundwater, it belongs to the surface owner.

     The ramifications of this decision raise red flags. When companies go beyond disposal and utilize produced water by moving it to new well sites, treating it for resale or selling it for desalination, landowners are not compensated. Few contracts grant that right, resulting in the water being taken.

     The Texas Supreme Court ruling opens the door for oil and gas operators to do just that — under the guise of implied rights. Unless explicitly reserved, landowners now risk losing control of an asset they may not even realize they are giving up in standard lease language.

     This case sets a precedent with far-reaching consequences. Today it’s produced water. Tomorrow it could be brackish water, surface water or even other underground resources that competing industries find profitable. If courts are going to expand implied rights in this way, what’s left of the landowner’s estate?

     Rights given away are rarely regained. In a time when ranchers and landowners are fighting for every dollar to stay afloat, we cannot afford to let potential revenue streams be quietly taken without consent. 

     Let this case be a strict exception, not the beginning of a new rule. Landowners must stay vigilant when negotiating oil and gas leases.

     Precise, protective language must be used to ensure water rights are not mistakenly conveyed. We urge landowners to seek legal counsel before signing away rights that could prove critical down the line. 

     As an association, we will continue to stand firm in our mission on this issue: to protect the rights of Texas landowners and defend the plain language and intent of the Texas Constitution.

     The battle over produced water may seem like a niche legal fight, but its implications run deep. Texas must not allow private property rights to be chipped away in the courts or the legislature under industry pressure. If we do, we risk opening the floodgates to further erosion of landowner rights.

     We will not stand by and let that happen.