Imagine Houston Residents as rich as Saudi Arabia, not because there is oil underneath us but because someone at City Hall saw a future fortune in water.
Texas built pipelines for oil. San Antonio built one 142 miles long for water. Houston loses 32 billion gallons a year. What if we started treating water like the valuable public asset it may someday become?
Somewhere in Texas, the next Jed Clampett may already be sitting on top of a fortune.
Only this time, when the drill goes into the ground, what comes bubbling up may not be black.
It may be perfectly clear.
Water.
T. Boone Pickens understood that years ago.
Pickens, who made his name and fortune in oil, began accumulating groundwater rights beneath enormous stretches of the Texas Panhandle. In 2011, the Canadian River Municipal Water Authority agreed to pay about $103 million for water rights covering roughly 211,000 acres controlled by Pickens and Mesa Water. The deal involved an estimated 4 trillion gallons of groundwater in place. (PR Newswire)
Pickens was looking into the future.
Houston might want to do the same.
Because while Texas investors were buying water rights, Houston was losing water.
A lot of it.
Houston has reported losing roughly 32 billion gallons of treated water in a year through its system. KPRC reported that the amount exceeded the annual water use of the entire city of Fort Worth. (KPRC)
Thirty-two billion gallons is difficult to comprehend.
So let’s try this.
San Antonio decided it needed another dependable source of water.
It didn’t find that water underneath downtown.
It went looking 142 miles away.
The San Antonio Water System built the Vista Ridge pipeline from Burleson County to San Antonio. The 60-inch pipeline carries more than 16 billion gallons of water per year. (San Antonio Water System)
Read those numbers again.
San Antonio built a 142-mile pipeline to obtain 16 billion gallons a year.
Houston loses about twice that much.
Maybe Houston has been looking at its water problem backward.
Every broken water main is treated as another expense.
Another repair crew.
Another hole in the street.
Another red dot on the 311 map.
Another pipe that has to be replaced.
But what if the water escaping from those pipes isn’t merely something we are wasting?
What if we are watching an asset disappear?
Houston currently charges $13.81 per 1,000 gallons as its resale water volume charge. (City of Houston Web Services)
Use that figure merely as a measuring stick—not as a claim that Houston could sell every recovered gallon tomorrow—and 32 billion gallons represents approximately:
$442 million
worth of water at that volume rate.
Before somebody at City Hall sends me an angry email, let me help write it.
No, Houston isn’t literally pouring $442 million in cash into Brays Bayou.
Some water loss isn’t a visible leak. Not every recovered gallon could automatically be sold. Water must be treated, pumped, and transported. New customers and pipelines would cost money. Water utilities have complicated finances.
Fine.
Then tell us what 32 billion gallons is worth.
$300 million?
$200 million?
$100 million?
At what price does throwing away treated drinking water become a bargain?
That is the problem with defending a number this large.
Eventually the defense becomes:
Don’t worry, Houston. We’re only wasting a couple hundred million dollars’ worth of water.
Only.
Houston expects roughly $1.5 billion in property-tax revenue in FY2027. (City of Houston)
Our deliberately hypothetical $442 million comparison equals almost 30 percent of that amount.
No, fixing Houston’s leaks would not allow the mayor to announce tomorrow:
PROPERTY TAXES ABOLISHED.
But why stop thinking at tomorrow?
What will dependable water be worth in 2050?
What will it be worth in 2075?
Ask T. Boone Pickens.
Ask San Antonio why it put 142 miles of steel pipe into the ground.
Texas already understands the economics of moving valuable liquids enormous distances.
We have spent generations building pipelines because oil and natural gas were worth transporting from where somebody had them to where somebody needed them.
Water has one economic advantage over both.
You can decide not to buy gasoline.
Try deciding not to buy water.
And Houston has another advantage that makes this story different from an oil boom.
When somebody discovers oil beneath a ranch, the mineral-rights owner may become wealthy.
Houston’s water system is a public system.
The pipes, treatment infrastructure, and utility exist to serve the people of Houston.
In the broadest sense, we are the beneficiaries of the asset.
So let’s commit a little heresy.
What if Houston someday became a water exporter?
Not tomorrow.
Not by draining reservoirs needed by Houstonians.
Not by selling water we don’t have.
But imagine Houston decades from now with a modern, tight water system, expanded treatment capacity, secure long-term supplies and the ability to deliver water beyond its boundaries when it had water available to sell.
We already know pipelines can move water enormous distances.
And obtaining the route might be less impossible than it sounds.
Water lines routinely use rights-of-way and easements just as other infrastructure does. Texas even issues easements across state lands for water lines as well as oil and gas pipelines. (Texas General Land Office)
Much of a hypothetical long-distance route might cross ranches or agricultural land.
Traditionally, landowners are compensated for easements.
But what if Houston someday offered some landowners something besides—or in addition to—cash?
Water.
A contractual allocation.
Guaranteed access during specified conditions.
A connection to the line.
Perhaps, where law, supply and regulation permitted it, the thing traveling through the pipe could help pay for the right to put the pipe there.
I am not saying Texas law today automatically provides such an arrangement.
I am asking what entrepreneurs always ask:
Why couldn’t somebody structure one?
Texas already recognizes groundwater beneath private land as a property right, subject to groundwater-district regulation, and state law expressly contemplates the purchase, sale, transportation and distribution of water. (TCSS Texas Legislature)
That is where this stops being a story merely about broken Houston pipes.
It becomes a story about how we think.
Oilmen didn’t become rich because they looked at crude oil and said:
What a mess.
They looked at it and asked:
What can we do with it?
Pickens didn’t look at water beneath ranchland and say:
It’s only water.
He saw value other people might need someday.
Houston looks at 32 billion gallons disappearing from its system and understandably sees a maintenance problem.
Maybe we should also see something else.
Inventory.
Lost inventory.
And unlike oil, this inventory is becoming more important every year.
Texas is growing.
Agriculture needs water.
Industry needs water.
New subdivisions need water.
Data centers need water.
Every human being arriving in Texas needs water.
And somewhere in Houston today, treated drinking water is still running through a broken pipe, across a street and into a storm drain.
I know.
I can look out my window and see it.
Maybe someday someone will read this and laugh.
Houston selling water?
Using water revenue to reduce the burden on taxpayers?
Trading long-term water access for pipeline easements?
Treating municipal water the way previous generations treated oil?
Crazy.
Perhaps.
There was probably a time when buying Texas ranchland because of the water underneath it sounded crazy too.
T. Boone Pickens didn’t wait for everyone else to agree.
Neither should Houston wait until water becomes so valuable that somebody explains to our grandchildren what we once did with billions of gallons of it.
We let it escape through broken pipes.
We watched it run down the street.
We let it disappear into storm sewers and bayous.
And then we sent Houstonians a property-tax bill.
Someday they may look back at us the way we look back at somebody who sold oil land before Spindletop.
And they may ask only one question: