Texas v. New Mexico – A New Agreement that Targets Domestic Water Wells

The battle between Texas and New Mexico over groundwater pumping and the Rio Grande appears to be ending, at least in some respects. Although Texas and New Mexico reached an agreement over two years ago, on June 21, 2024, the United States Supreme Court, in a 5-4 decision, held that the federal government could block an agreement between Texas and New Mexico to resolve their dispute over the 1938 Rio Grande Compact.

The parties, including the federal government, went back to the drawing board and have now reached an agreement that the federal government has joined. However, the new agreement imposes several obligations on New Mexico with respect to groundwater pumping that will require some major decisions by the state on groundwater use. Most importantly, New Mexico must reduce groundwater depletions in the Lower Rio Grande by 18,200 acre-feet per year within ten years, permanently retiring groundwater rights. Domestic water wells are specifically called out under the agreement, and New Mexico must take action to limit present and future depletions from domestic wells. The agreement is now in the hands of the United States Supreme Court, which is expected to approve the agreement soon.

Texas filed suit against New Mexico in 2013, alleging that excessive groundwater pumping in New Mexico deprived Texas of its fair share of Rio Grande water under the compact. Note that lawsuits between states originate in the United States Supreme Court. The Court appoints a Special Master to hold hearings and make recommendations to the Court, which ultimately decides the issues.

Unlike most compacts, the Rio Grande Compact requires New Mexico to deliver water not to the New Mexico/Texas border, but to Elephant Butte Reservoir, a federal project about 100 miles north of the border. Texas alleged that groundwater pumping along the river between the Elephant Butte Reservoir and the state line took water from the river that rightfully belonged to Texas.  

The federal government filed a motion to intervene in the litigation in 2014, alleging that its interest in the federal project at Elephant Butte allowed intervention to protect the government’s rights and obligations. The federal government, through Downstream Contracts, was required to deliver water to an irrigation district in New Mexico, and one in Texas. The Court allowed the federal government to intervene, a relatively rare occurrence, because of the unique circumstances of the case and the fact that its interests aligned with those of Texas.

Texas’ lawsuit focused on increased groundwater pumping between the Elephant Butte Reservoir and the state line. While the federal government had operated the reservoir based on data from 1951 to 1978 (“D2 data”), a time period where groundwater pumping increased significantly in New Mexico, Texas asked for allocations to be based on 1938 data, when there was much less groundwater pumping in New Mexico. The United States, which had operated based on the later for decades, did not request a change.

After 10 years of hearings and litigation, Texas and New Mexico agreed on a consent decree, settling the issues between the states. The agreement continued water allocations based on the D2 period, which favors New Mexico, but measured the water delivery at El Paso, which favors Texas. Complex accounting measures in the agreement ensured that Texas would receive the state’s fair share of water.

However, the federal government objected to the agreement, claiming that its interests in administering the water project were threatened. In addition, for the first time, the federal government claimed that the water allocation should be based on 1938 levels of groundwater withdrawals. New Mexico estimates that a forced reduction in groundwater withdrawals to 1938 levels would mean a loss of 50,000 jobs and 10% of the state’s gross domestic product. The United States Supreme Court ruled that the federal government must be part of any agreement.

The new agreement (a set of agreements) ensures that the federal government can meet treaty demands with Mexico and can operate the Elephant Butte Reservoir as in the past. Irrigation Districts are also assured that they will continue to receive water.

Under the agreements, New Mexico agrees to reduce groundwater depletions in the Lower Rio Grande by 18,200 acre-feet per year within ten years by permanently retiring groundwater rights. A minimum of 9,100 acre-feet reduction must be achieved within five years. Annual progress reports must be filed.

New Mexico must also draft and implement a Lower Rio Grande Water Management Plan within two years. The Plan must reflect enforceable hydrologic conditions contained within the agreement, and actions to satisfy the depletion reduction, close the Lower Rio Grande Basin, and maintain an Upper Valley Diversion Ratio above .79. Stable or gaining aquifer levels must be achieved when surface water releases from the Caballo Reservoir are above 40,000 acre-feet and the plan must include actions to limit present and future depletions from domestic wells.

The agreement is now before the United States Supreme Court. The Court is expected to approve the agreement soon. Although the dispute may be over, the tough decisions are just beginning for the State of New Mexico. With domestic water wells specifically targeted by the agreement, water well contractors in the state must continue to be proactive to protect the industry.