This commentary originally appeared in the Austin American-Statesman on October 7, 2014.

Who owns the water beneath your property? According to state law (as well as the Texas Supreme Court), you do. Yet all too often, local regulatory entities act as if groundwater belongs to them.

Consider the Lost Pines Groundwater Conservation District. Unlike most regions of the state, permits to pump water in the Lost Pines district are only issued for a five-year period. Lost Pines only issues permits for pumping in the amount of water that is guaranteed to actually be pumped. As a result, water marketers in the area face a Catch-22. They can’t get water permits until they have customers, but given the short life of the permit, it’s hard to attract customers who want long-term water security.

Lost Pines is not the only groundwater conservation district that places severe restrictions on the ability of landowners to get at their own water. Some districts have imposed “export fees” on groundwater that is intended for use outside the district area, or have placed a moratorium on new permitting. As Kyle Frazier of the Texas Desalination Association recently noted, “If we regulated grapefruits the way we regulated groundwater, you’d be told how many you could produce, and then not be able to sell them beyond the county line.”

Due to these restrictions, developers increasingly have turned to more expensive sources of water. Yet despite the drought, Texas’ groundwater resources remain vast. A recent analysis by RW Harden and Associates found that despite over a century of pumping, groundwater storage remained above 90 percent of pre-industrial levels in all regions of the state and were at 99 percent in most regions. For the most part, water scarcity is not about hydrology. It’s about politics.

If a landowner feels his local regulator has gone too far, he can sue to have the regulation overturned or at least to receive compensation for his taken property. And Texas courts have been finding in favor of landowners who have brought these lawsuits. But current law makes any such challenge an uphill battle. Many districts do not keep proper records, making judicial review of the district’s actions difficult if not impossible. The applicable legal standards are often vague. Challenges can be expensive and time-consuming. And a “loser pays” provision in the law means that if the landowner is unsuccessful, he will have to pay the district’s legal fees as well as his own.

It doesn’t have to be this way. Groundwater conservation districts have been an option under state law since 1949. But until the 1990s, only a few districts had been created. It was only beginning with major water reform legislation in 1997 that the number of districts started to take off. Since then, groundwater conservation districts have had their regulatory powers significantly expanded.

Texas is blessed with abundant groundwater resources. Ensuring that this water can be developed in a sensible and efficient manner, however, will require some changes to the current system. Experience attests that markets tend to do a better job of allocating resources to their best use than do political and regulatory authorities. But water markets cannot function well without secure and well-defined property rights. The state has a responsibility to ensure that landowners’ property rights in groundwater are protected.

Neeley is a policy analyst with Texas Public Policy Foundation’s Armstrong Center for Energy & the Environment.