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NM Official: Texas Landowners “Stealing” Millions of Gallons of Water, Selling it Back for Fracking

ORLA — After you head northeast on Ranch Road 652 from tiny Orla, it’s easy to miss the precise moment you leave Texas and cross into New Mexico. The sign just says “Lea County Line,” and with 254 counties in Texas, you’d be forgiven for not knowing there isn’t one named Lea.

But the folks who are selling water over it know exactly where the line is.

That’s because on the Texas side, where the “rule of capture” rules groundwater policy, people basically can pump water from beneath their land to their heart’s content. But on the New Mexico side, the state has imposed tight regulations on both surface and groundwater that restrict supply.

Here’s the rub — or the opportunity, depending on your perspective: With an oil fracking boom driving demand for freshwater on both sides of the state line in these parts, Texas landowners are helping to fill the void with water from the Lone Star State — including from at least one county in which Gov. Greg Abbotthas declared a drought.

Now a top New Mexico politician is crying foul, saying that unregulated pumping from wells next to the state line is depleting the shared aquifers that supply water to southern New Mexico.

“Texas is stealing New Mexico’s water,” said New Mexico State Land Commissioner Aubrey Dunn. “If you put a whole bunch of straws in Texas and you don’t have any straws in New Mexico, you’re sucking all the water from under New Mexico out in Texas and then selling it back to New Mexico.”

The difference in ownership of land in the two states contributes to the divergent water policies. In Texas, more than 90 percent of the land is privately owned. In New Mexico, by contrast, only 43 percent is owned by individuals, while 57 percent is in government or tribal hands.

By Ben Hasson

Dunn says he has already found at least seven unpermitted water lines snaking from Texas across state trust lands he oversees, and he believes millions of gallons a day are being pumped into his state for use in oil and gas exploration.

The commissioner, who oversees 9 million surface acres of state trust lands, said he has quit issuing new fresh water well permits for the oil and gas industry on agency-supervised property, but he can’t stop the pumping in Texas. And experts say there is no law barring unlimited sales of Texas water to New Mexico buyers — making the transfers hard to quantify.

“Water is a vested property in the state of Texas. There is no law that I know of that prevents it from being shipped over state lines,” said state Sen. Kel Seliger, R-Amarillo. “It is less important where the water goes, as long as the owners are compensated, I suppose, than what the plans are to see to it that we have a water supply in perpetuity.”

It’s a bipartisan sentiment. State Rep. Poncho Nevárez, the Eagle Pass Democrat who represents the far-flung outpost of Pecos in neighboring Reeves County, said he’s not so worried where the water goes as long as there’s enough to go around for residents and the towns they live in.

“What does it matter if it goes 5 feet across the county line or to the moon?” Nevarez said. “I could see the pushback if Pecos proper was having trouble getting water, and here you have these guys moving massive amounts of water to New Mexico … you gotta take care of the people where the resource generates from first.”

When it comes to ensuring future supplies for the locals in Texas, lawmakers note that communities can always band together and form groundwater conservation districts, which issue pumping permits to protect aquifer levels. But here in Loving County, which is part of both Nevarez’ and Seliger’s sprawling districts and sits adjacent to Lea County, New Mexico, there is no water conservation district, according to maps published by the Texas Water Development Board. (Abbott recently put Loving County on the list of counties seeking federal drought assistance).

Texas rancher Roy “Sonny” Lindsay owns Loving County property that sits along the state border near Ranch Road 652, and he’s seen plenty of water heading north to New Mexico — where locally sourced water is harder to obtain. He recently sold some of it himself to ConocoPhillips from a giant frac pit — used to store water in the drilling process — the company built on his land. The company then pumped the water through hoses running into New Mexico, he said.

“If it wasn’t for Texas water, New Mexico wouldn’t have no oil production,” Lindsay said. “So they shouldn’t gripe about us selling water over there.”

Rancher and land owner Sonny Lindsay walks next to a “frac pit” on land he has leased to ConocoPhillips along Ranch Road 652 near the Texas-New Mexico border. Marjorie Kamys Cotera for The Texas Tribune

In an emailed statement, ConocoPhillips spokeswoman Romelia Hinojosa cited the supply problems in New Mexico and said water from Lindsay’s Hanging H Ranch was used to complete five wells in New Mexico in early 2017.

“At the time, we could not source water from New Mexico because other operators had captured the full capacity of the water available from sources (third party water vendors) in New Mexico,” Hinojosa said. She didn’t know the “exact volume” of water sent over the state line but said it was less than 5 percent of the water the company used in the Permian Basin in 2017.

“At this time, ConocoPhillips is not using Texas water in New Mexico,” Hinojosa added.

Lindsay said ConocoPhillips isn’t the only company that has piped water into New Mexico over his land. He said he recently discovered a water line from Texas Pacific Land Trust, a highly profitable company whose water sales have exploded in recent years, going over his land into New Mexico. He found another line lying alongside Ranch Road 652 whose owner could not be determined. Nor was it clear who owned several hard plastic lines — or what they were being used for — stretching across the state border near a wastewater facility not far from the Lea County Line sign.

Phone and email messages left for Texas Pacific Land Trust, a 130-year-old company that owns almost 900,000 acres of land in 18 Texas counties, were not returned this week.

Meanwhile, a Houston-based water supply company, Solaris Water Midstream, announced Tuesday that it is building a pipeline that will soon deliver millions of gallons of water per day from parched West Texas to New Mexico to help alleviate what the CEO described as “limited sources of water” constraining fracking operations in the region.

“The high-capacity pipeline will add crucial, permanent water supply infrastructure to one of the most prolific areas in the Permian Basin and will be capable of transporting approximately 150,000 barrels [6.3 million gallons] of water per day from Loving County, Texas, to Eddy County, New Mexico,” the company said. Solaris spokeswoman Casey Nikoloric said the company works closely with area landowners to ensure “all permits are in place and easement fees are paid.”

The heavy cross-state water sales come amid an unprecedented fracking boom in the northwestern Texas counties near the New Mexico border.

Fracking, short for hydraulic fracturing, uses enormous quantities of water, which drillers pressurize and shoot deep below the surface to help separate shale oil from porous rocks. In remote West Texas counties like Loving and Reeves, water lines zigzag between frac pits — above-ground pools lined with plastic — that dot the horizon. The drilling frenzy has filled hotels, torn up roads and boosted oil company profits all over the Permian Basin.

New Mexico State Land Commissioner Aubrey Dunn stands along Highway 652 below the Lea County sign at the Texas-New Mexico border on May 23, 2018. Marjorie Kamys Cotera for The Texas Tribune

But oil isn’t the only liquid landowners are turning into quick cash. Suddenly, ranchers who once coaxed cotton out of the desert are finding their water is more valuable than the crops they once irrigated with it.

“There’s a lot of individuals that have sold a million dollars’ worth of water,” said Paul Weatherby, former general manager of the Middle Pecos Groundwater Conservation District. He said he’s not bothered that some of it is being sold in New Mexico.

“You don’t stop at the border for anything,” he said. “You drive across it on a trip. Ranchers own land in both states; farmers own land in both states. Oil and gas doesn’t recognize the border. Water doesn’t recognize the border.”

Still, water and how it’s used can be a touchy subject around here. In the early 1950s, a crown jewel of Fort Stockton — Comanche Springs — dried up amid heavy pumping by farmers, most famously Clayton Williams Sr. An ensuing court battle reaffirmed the landmark 1904 decision upholding the “rule of capture” — giving landowners broad control over the water under their property — and Comanche Springs never recovered.

Williams’ son, Clayton Williams Jr., who lost the 1990 governor’s race to Ann Richards, later rattled Fort Stockton with a plan to pump his water from the rural area to thirsty cities like Midland and Odessa. The battle dragged on for years, culminating in a 2017 settlement that allows for limited water exports.

Tangling over water with New Mexico isn’t new, either — particularly when it comes to the Rio Grande and Pecos Rivers. A battle over distribution of water from the Rio Grande recently went to the U.S. Supreme Court, where Texas claimed a preliminary victory in March in an ongoing water war.

In this new water-war battlefront, the New Mexico land commissioner argues that the rule of capture should not allow one state to negatively impact another’s aquifer. Dunn also is trying to determine if the landowners and companies selling water in New Mexico are paying taxes on it as required.

Robert McEntyre, spokesman for the New Mexico Oil & Gas Association, said his members believe in robust compliance with all regulations and tax laws.

“If we’re running lines across state trust lands or federal lands, we should have the proper permits, and the proper taxes should be paid. I don’t think anyone is contesting that,” he said. “But I do think it would be irresponsible for the land commissioner to paint the entire industry with a broad brush over what seems to be a handful of cases.”

Dunn says he worries about the long-term impact of pumping so much groundwater for use in oil and gas extraction. That pumping lowers the amount of water that feeds rivers and streams, he said.

“You’re taking a resource that’s not really rechargeable, and using it,” Dunn said. “I think in the long run water is going to be more valuable than oil.”

Midland veterinarian Michael McCulloch, who owns land in both Texas and New Mexico and advocates for water conservation, said it’s the disharmony in interstate water law that’s helping to deplete the land’s most precious resource.

“We need to think about how this is going to affect our kids and grandkids down the road,” McCulloch said. “It does bother me a little bit that New Mexico regulates how much water I can use, but it would be nice if we could have a compromise between the two states, and Texas conserves a little bit more water and New Mexico maybe lightens up a bit on their water law.”

Author: JAY ROOT –  The Texas Tribune

Study: Emissions From Fracked Wells Linked to Low Birthweight Babies

ODESSA, Texas – Pregnant women living next to fracked gas wells in Texas and elsewhere are more likely to have a low birth-weight baby – that’s the finding in a new study from Princeton University.

The researchers compared the locations of parents’ homes to hospital records in Pennsylvania and found a strong correlation.

Princeton economics professor Janet Currie says they found a strong correlation – that the low birth weights were highly localized, much more likely to be found right next to the well sites.

“What is surprising is, we found a fairly large effect for people living very close; but by the time you got to two miles away, we did not detect any effect,” she says.

About 6,000 fracking oil and gas wells have been drilled in Texas since 2005. The industry argues that air pollution from gas wells and equipment such as compressor stations disperses quickly after it’s released. It also says the issue is well understood and regulated.

Low birthweight has long been considered an important indicator of later health problems.

Currie says based on previous research, they think the problem may be due to volatile organic compounds such as benzene, or small, soot-like particles such as those found in diesel exhaust.

Beth Weinberger, a public health consultant with the Environmental Health Project, says these kinds of dangerous air pollutants are well documented as common in the gas fields. And she says previous research has associated them with preterm births and similar issues.

“We know much of what’s in the emissions, and in each of the studies, the researchers have found associations between exposure to gas drilling and birth outcomes,” she explains.

The Princeton research suggests keeping drilling away from homes, through zoning or well set-back rules. Weinberger adds that even a portable air filter may help some homes reduce pollution levels.

Author: Mark Richardson – Texas News Service

UT System Oil Money is a Gusher for its Administration – And a Trickle for Students

WINKLER COUNTY — On a square of dirt surrounded by sun-scorched grassland, hundreds of miles from Austin, a huge iron pumpjack creaks up and down. It runs 24 hours a day, seven days a week, generating as much as $7,000 worth of oil per day.

It’s surrounded by thousands of others, drawing from billions of dollars’ worth of oil and gas under this ground, which is all controlled by the University of Texas System. And thanks to the fracking boom, workers are pulling out far more oil from each square of West Texas dirt — millions of gallons a day.

Each barrel pulled from the ground adds a few more dollars to the Permanent University Fund, a $19.5 billion pot that supports an endowment for the UT and Texas A&M University systems.

In recent years, the annual cash payout from this oil fund has exploded: In 2011, the UT System — which oversees UT-Austin and 13 other campuses — received $352 million from the fund. This year, it will receive $603 million, and about half will flow directly to its flagship campus in Austin (the Texas A&M System will receive about $300 million).

That has helped UT System become one of the richest educational institutions in the world, part of a rarefied club that includes Harvard, Yale and Stanford.

But unlike the other members of the club, the UT System is a public institution and must disclose how it spends the money.

Those disclosures show that the wealth hasn’t created a windfall for students. The money that filters down to them in the form of financial aid amounts to a trickle of roughly $40 million. That includes about $3 million for UT-Austin’s 40,000 undergraduates, and approximately $35 million for its graduate students.

Meanwhile, the amount the UT System has spent on its general administration quadrupled since 2011 to a peak of $143 million in the last academic year. And it has committed huge sums to some controversial initiatives proposed by the past two UT chancellors, including:

  • $215 million to buy 300 acres of empty land in Houston, with no concrete plans for how to use it. After a political backlash, the system now says it plans to sell the land.
  • $100 million devoted to an in-house educational technology startup that has struggled to meet its goals.
  • $141 million on a new 17-story office tower in expensive downtown Austin to house hundreds of system employees.

All those dollars could have otherwise gone directly to UT-Austin, which has seen its financial support from the state decline and has raised its annual tuition by $1,500 since 2010.

UT System leaders say they are being smart with the oil money. State law imposes some spending limits, and they say their administrative expansion has meant big savings for UT campuses by consolidating expensive services.

But many state leaders, and some members of the system’s own governing board, have begun questioning how all those millions are being spent.

“It looks to me like an entity that has a lot more money than they know what to do with,” Sen. Kel Seliger, R-Amarillo, chairman of the Senate Higher Education Committee, told UT’s chancellor during a tense committee hearing in January.

The nine-member UT Board of Regents, which approved all those big-ticket expenditures in recent years, will meet this week. Since a group of more skeptical regents joined the board this spring, many members have signaled that they’re ready to rein in the system’s spending.

“There’s a very significant and growing top-down, expensive architecture that … provides, I believe, very little, if any, return on investment,” Regent Janiece Longoria said during a meeting this May.

The complaints have created a tense situation for UT System Chancellor Bill McRaven, who has defended many of the big-ticket projects and whose contract expires in January. This week he will tell regents that he wants to cut $15 million from the system administration’s budget. Even then, the budget will be three times what it was in 2011.

“The UT System Administration’s first and foremost responsibility is to the institutions — period!” McRaven wrote in response to questions for this story. (Read his responses here.) “However, running a 21st century university system requires leveraging the size, scale and diversity of the 14 institutions to better serve the broader educational and health care needs of the people of Texas.”

Endowment nearly doubled during fracking boom

UT gained access to its oil riches more than 140 years ago, though no one knew at the time. In 1876, when Texas ratified the sixth and current version of its Constitution, the authors ordered the state to create a “university of the first class.” Over the next few years, the state set aside 2.1 million acres in West Texas to help fund an endowment for the new school.

At the time, the land — which covers an area larger than Delaware and Rhode Island combined — seemed like little more than useless brushland that could barely support cattle grazing.

But after oil was discovered in Texas in 1901, UT System leaders began to suspect there was oil under their West Texas ground. In 1923, a wildcatter named Frank Pickrell was the first to strike at a well called Santa Rita No. 1, kicking off a rush that hasn’t stopped since.

These days, the university land is just as hot and dry, but not nearly as sparse. Hundreds of oil wells dot the horizon, surrounded by networks of dirt roads, pipelines and big man-made pools of water. Now that the fracking boom has caused a new oil rush in West Texas, more than 7,000 roughnecks, drillers and truck drivers trudge out of hotels and portable buildings each morning to work on the land.

As the oil and gas flows into pipelines, the money flows into the Permanent University Fund, which has grown from $10.7 billion in 2010 to $19.5 billion today.

The system preserves the fund for the long-term by spending only a small fraction of it every year. Still, that amounts to $603 million for the UT System alone in 2017 — more than the Legislature spends on its main financial aid program for low-income students across the state.

The Texas Constitution says the UT System can only spend the oil money on capital projects and administration. Whatever the system doesn’t use goes to UT-Austin, which is free to spend it on whatever it wants. But the university spends only a small fraction of the money on student financial aid.

How the oil money flows through the UT System Emily Albracht/The Texas Tribune

Experts who’ve looked at the scant information available on private universities say they probably use their endowment funds the same way.

But politicians from both parties are calling for change. Last year, even Donald Trump jumped into the debate, when the then-presidential candidate accused colleges of spending their “massive endowments” on “things that don’t matter.”

“Too many of these universities don’t use the money to help with the tuition and student debt,” he said at a Pennsylvania campaign rally. “Instead, these universities use the money to pay their administrators, or put donors’ names on buildings, or just store the money, keep it and invest it.”

$100 million for a startup

Universities faced grim financial news in 2011 as state lawmakers passed historic budget cuts — including more than a half billion dollars from higher education. But thanks to the oil boom and some good investments, the UT System learned the oil fund would deliver a record cash payout of $400 million in the coming year. Flush with that new cash, administrators found new ways to spend it.

Hoping to unite system leaders behind a new vision for the future of higher education in Texas, Chancellor Francisco Cigarroa locked himself in his official residence with a group of advisors for nearly two days. He emerged with what he called a “Framework for Excellence” for the system — one that would largely be financed by the oil fund.

The framework had nine “planks,” including improving science education, building new research centers, hiring new faculty and developing online learning tools. All nine regents approved the plan without asking a single question, and they gave Cigarroa an initial investment of $244 million to implement it.

The plan was seen as so visionary that Cigarroa was invited to the White House to talk about it — twice.

Former University of Texas System Chancellor Francisco Cigarroa at a Board of Regents meeting in 2013. Bob Daemmrich for the Texas Tribune

One of the priciest items was one that the regents had pushed him to include: The Institute for Transformational Learning, envisioned as a kind of startup technology company to create digital learning tools at UT campuses and beyond.

It wasn’t clear how the institute would sustain itself in the long term, or exactly what products it would develop. But regents approved $50 million to launch it.

The system started by pumping $10 million into one of the hottest new education trends at the time: Massive Open Online Courses, which could be taken free by anyone, anywhere.

But the value of the courses to UT students was never clear. In one case, 44,000 people from around the world signed up for “Energy 101,” taught by famed UT-Austin professor Michael Webber. Only a fraction of them finished the 10-week course, and hardly any were UT-Austin students — probably because the course couldn’t be taken for college credit.

Within two years, the attitude toward the courses soured.

“The System should stop investing millions of dollars on gambles like these, which lack financial exit strategies and viable forms of revenue,” the editorial board of UT-Austin’s student newspaper wrote in 2014.

Yet in an exuberant presentation to the board of regents in August 2014, the Institute for Transformational Learning’s leaders didn’t talk about any of that. Instead, the director hyped other products that the institute was developing and declared that the UT System was “poised to define the future of higher education.”

Another staff member told the regents about a “revolutionary” program to help college dropouts finish their degree online. And a “beautiful, engaging” digital tool that would let UT students access all their learning materials on a mobile device. Then came a “cross institutional marketplace offering industry-driven multilingual stackable modules, certificates and specializations to health professionals.”

It wasn’t clear exactly how these products would work or whether they would generate any revenue. Regents didn’t ask.

After noting that the oil fund payout was continuing to rise, they allocated tens of millions more dollars in oil money to expand online learning and campus enrollment — including another $48 million for the institute.

The institute continued to expand even after Cigarroa resigned. After McRaven became chancellor, its annual budget grew almost tenfold, to $25 million and a staff of 50 in the last academic year. But most of the products that had initially generated so much excitement — the online courses, the program for college dropouts and the platform for health education — are no longer part of its main strategy.

For example, the system had high hopes when it launched one of the institute’s products, an iPad app called TEx, at UT-Rio Grande Valley. The app let students access all their course materials, measure their progress, and communicate with classmates and professors. But while some students praised the tool, many others found the technology difficult and counterintuitive. The school won’t be using it this fall.

According to a memo obtained by the Tribune, UT-RGV will instead go back to its old online platform from an outside vendor. As a result, the memo says, “students will likely incur additional costs.” It’s not clear how much.

Costs had already been going up for students. In 2016, the regents approved tuition increases at all the system’s campuses. At UT-Austin, that increase was projected to raise $30 million.

Richard Vedder, a professor and expert on college endowments from Ohio University, said that many universities have spent their wealth on initiatives like the Institute for Transformational Learning.

“There’s justification for wanting to innovate and all, but … that’s a lot of money,” he said. “I would throw a million, or two million, into a pilot study, maybe. But $100 million — that’s tuition for 10,000 students.”

“We have more money than sense”

Today, after six years and about $50 million of UT System money spent, enthusiasm for the institute among many of the regents is waning fast.

“It appears that we spend a goodly sum on initiatives like this,” new regent Longoria said at an April meeting, two months after she began her second stint on the board. She added that to the outside observer, it appears “we have more money than sense.”

“Let me assure you, we take the stewardship of these resources very seriously,” McRaven countered, adding that the institute would eventually generate revenue and was a “worthwhile endeavor.”

“I don’t disagree with that,” Longoria responded. “But why has it taken over five years, and we still don’t have a product?”

Soon after that meeting, the institute’s top two executives resigned.

In retrospect, system leaders say that the initial vision might have been too ambitious.

“There was not the foundation of a business plan at the time [the institute was launched],” said Steve Leslie, a UT System vice chancellor who began overseeing the institute in 2015.

The institute is still working on a plan to achieve financial sustainability, Leslie said. Preliminary budget documents suggest that the institute will face cuts, but don’t specify how much.

Meanwhile, its next big play — a redesigned cybersecurity program at the University of Texas at San Antonio — is set to launch this fall.

Leslie said the best is yet to come for the institute.

“It was expensive,” he said. “But it led to where we are now, which has also been expensive.

“But … what this platform is going to provide is worth it, if we get to the finish line in ways that we think we will.”

“A risk and a gamble”

Cigarroa stepped down in early 2015. The regents tapped McRaven, a UT-Austin graduate and retired Navy admiral, to take his place.

He had no higher education experience, but his hiring generated a lot of buzz. He’d orchestrated the famous Navy SEAL raid that killed Osama Bin Laden. And McRaven was passionate about cutting bureaucracy and red tape.

But McRaven wanted to make his mark, too. Almost a year into the job, in November 2015, he presented his own ambitious vision for the UT System called the “Quantum Leaps.” The leaps, he said, were “about improving the human condition in every town, every city, for every man, woman and child.”

And they would make heavy use of the UT System’s cut of the oil fund, which by then had grown to $544 million.

Some of the Quantum Leaps aligned with the goals of most public universities — increasing student success, hiring talented faculty and growing diversity. Others address specific interests of McRaven’s, such as the creation of a UT Network for National Security and “an effort akin to the Manhattan Project to understand, prevent, treat and cure diseases of the brain.”

None raised more eyebrows than the last Quantum Leap, which was also among the most expensive — a plan to expand into Houston by buying hundreds of acres there.

As McRaven spoke, artist’s renderings flashed on a screen, showing dozens of buildings, along with sports fields and tree-lined boulevards. McRaven said he didn’t know exactly how the land would be used, but that it would create an “intellectual hub” for the UT System and be a “game changer.”

The University of Texas System bought more than 300 acres of land in southwest Houston for $215 million. It now plans to sell the land. Michael Stravato for the Texas Tribune

McRaven wrapped up his hour-long presentation to the regents by declaring that the system would “act with unparalleled boldness.”

“I hope your bold gamble in allowing this old sailor to lead this great institution will be a winning hand,” he said.

The boardroom burst into applause, and McRaven got a standing ovation. Regents were just as thrilled, if not more, than they had been by Cigarroa’s own nine-part vision four years earlier. And just as before, they gave their new chancellor tens of millions of dollars from the oil fund.

But outside the room, the Houston plan was a surprise. Many state legislators learned about it from the news, or from an e-mail sent right before McRaven’s speech. Houston lawmakers were furious, fearing the new campus would bring unwanted competition to the nearby University of Houston.

In the following weeks, McRaven received a cascade of requests from legislators urging him to slow down the process. But he didn’t. In January 2016, just three months after McRaven announced the Quantum Leaps, the UT System closed on the first 100 acres. It would eventually secure more than 300 acres at a cost of $215 million, all of which would come from the oil fund.

The criticism mounted. During public hearings, legislators pressed for more details about McRaven’s plans for the land. McRaven repeatedly insisted he didn’t have any yet. Meanwhile, lawmakers were pondering another round of major cuts to higher education funding — and they wanted to know more about how the UT System was spending its oil money.

Tensions peaked this January, when McRaven told members of the Senate Finance Committee that the hundreds of millions’ worth of cuts they were considering would have a “potentially devastating” effect on the UT System.

Lawmakers eventually backed off on the cuts, but that day the senators weren’t sympathetic.

“I don’t think you give a damn what the Legislature thinks,” said Sen. John Whitmire, D-Houston, practically yelling. He said he couldn’t believe McRaven was complaining about state funding cuts while spending hundreds of millions of dollars on empty land.

McRaven responded testily: “If you don’t do something big, bold, you don’t become a great University of Texas System. This could very well be a risk and a gamble.”

Senators had other examples of what they called unwise spending from the oil fund. They questioned the $1.5 million McRaven wanted to spend on studying how to brand the UT System. And they complained about the $141 million office tower in downtown Austin, which had been approved before McRaven was hired.

McRaven pushed back again. He pointed out that the new office tower would save money by consolidating the system’s staff from five buildings into one. He added that the state Constitution places limits on how the oil money can be spent.

But the tide was turning against him. The same day as the tense committee hearing, lawmakers appointed three new UT regents, who promised they would tell system leaders “no” when administrators pursued projects that weren’t in the best interests of the state.

Within weeks, McRaven changed his mind on the Houston land. In a hastily called press conference on March 1, he announced that the tract would be put up for sale.

“I was unable to build a shared vision for moving this project forward,” he recalled recently.

‘This is all about the students’

Since then, the pressure on McRaven has only increased, even from people who had previously been supportive of his goals. At a board meeting in May, Regent Steve Hicks apologized to his colleagues for losing focus on cost-cutting in recent years. Now, he said, he’s ready to dig into “how and where we spend our system resources.”

Several other regents agreed that the system administration needs to trim its budget and cut staff.

The board’s chairman, Paul Foster, promised to comb through system spending for possible savings. The first changes could come as soon as this week when the regents approve the system’s 2018 budget.

“This is all about the students, and we’ve got to make sure that we never lose sight of that,” Foster said.

UT System Chancellor Bill McRaven chats with Board of Regents chairman Paul Foster during a July meeting. Bob Daemmrich for the Texas Tribune

In written comments to the Texas Tribune, McRaven rejected the idea that the UT System has grown too big. Much of its increased budget, he said, has been the result of efforts to lower costs at the university level.

For instance, he said the system has spent tens of millions on software licenses, property insurance and digital library services that otherwise would have been paid for by each campus. He also said many of the new staff were hired to ease burdens for individual campuses.

Many of those initiatives were implemented before McRaven took over. Cigarroa, who signed off on many of them, said they were attempts to keep tuition down at campuses other than UT-Austin, since state law prohibited those schools from receiving cash from the oil fund.

“To actually save money on [those] campuses, you have got to start thinking a little creatively,” Cigarroa said.

Not all of those moves were successful, however. In 2014, the system committed $31 million per year to centralize audit and IT services in hopes that the savings would allow campuses to keep tuition flat. But the budget for those projects grew by millions because of problems with the IT transition, and the auditing consolidation proved to be a failure. The system decided in May to return the auditors to the campuses.

Overall, McRaven said the system has an “excellent track record” at saving money for the campuses through consolidation. But regents are pushing for more of the oil fund to go directly to UT-Austin. Last month, they instructed McRaven to redirect $26 million from the system to the university. That means UT-Austin can expect $338 million in oil money for the upcoming school year.

It’s unclear if any of that new money will go to financial aid. UT-Austin officials say they prefer to use their oil funds to raise the school’s stature by hiring new faculty and promoting research. The oil money only makes up 10 percent of the school’s revenue, and administrators say they use other sources of money to provide financial aid to students.

In a brief chat with reporters recently, McRaven tried not to make too much of the fact that change may be coming. The regents are in a “constant review process” when it comes to spending, he said, “always looking at how we manage access and affordability, and an exceptional faculty.”

Asked if he would like to stay on as chancellor after his contract expires, McRaven simply said, “I’m really enjoying working with this board … the new board members are great to work with. We have not had a discussion.”

Pressed further, he again said, “I can tell you I very much enjoy working with the board.”

Disclosure: The University of Texas System, the University of Texas at Austin, Texas A&M University and the University of Houston have been financial supporters of The Texas Tribune. A complete list of Tribune donors and sponsors is available here.

Read related Tribune coverage:

  • University of Texas System Chancellor Bill McRaven is facing new questions from his board of regents about spending and staffing levels, which come as he nears the end of his three-year contract. [Full story]
  • The University of Texas System has decided to scrap its controversial plans to build an educational and research facility in the city of Houston. [Full story]
  • One year after Chancellor William McRaven laid out his Quantum Leaps Initiative, UT System regents bought in big at their meeting Thursday. [Full story]
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Authors:   – The Texas Tribune

EPA: Fracking can Harm Drinking Water

In an amped-up final report, the U.S. Environmental Protection Agency says there is scientific evidence that hydraulic fracturing activities can impact the nation’s drinking water resources under some circumstances.

The controversial oil and gas extraction technique known as hydraulic fracturing can contaminate drinking water under certain circumstances, according to a long-anticipated U.S. Environmental Protection Agency report released Tuesday.

Ordered by Congress in 2010, the report reaches a somewhat stronger conclusion than a draft version unveiled last year that said the agency had found no evidence that fracking has “widespread, systemic impacts” on the nation’s drinking water supplies even though the practice has harmed water in some cases.

That finding was omitted from the final report — a substantial change that environmental groups pounced on Tuesday, and industry groups and regulators dismissed. (Thomas Burke, the EPA’s science adviser and deputy assistant administrator of the agency’s Office of Research and Development told the Associated Press the removal came at the urging of the EPA’s Science Advisory Board).

But other than the removal of that one particular finding, “nothing much has changed, and there’s not a lot of new information we weren’t already aware of,” said Christi Craddick, chairman of the Texas Railroad Commission, which regulates oil and gas activity in the state.

The commission had been looking at ways to tighten regulation of fracking before the report came out, Craddick said, but she added that the current rules are sufficient and have been strengthened multiple times already.

“As long as companies and operators follow our rules, we think we won’t see any problems with hydraulic fracturing,” she said.

Fracking involves pumping millions of gallons of chemical-laced water deep into the ground to blast apart rock holding oil and gas deposits. The technique has helped spur a domestic energy boom this century but also has been linked to earthquakes, air pollution and groundwater contamination.

The EPA misled the public about the pollution risks associated with fracking in its initial report, said Mark Brownstein, vice president of climate and energy at the Environmental Defense Fund.

“The revised assessment puts an end to the false narrative of risk-free fracking that has been widely promoted by industry,” he said in a statement. “It opens the door for policy improvements and scientific advancements that could better protect the people and places most impacted.”

Whether such policies will come under a Donald Trump administration would appear doubtful, at least at the federal level. The president-elect has promised to unwind oil and gas drilling regulations and is filling his Cabinet with fossil fuel industry officials and champions, including Exxon Mobil CEO Rex Tillerson and former Texas Gov. Rick Perry, who serves on the board of Dallas-based pipeline company Energy Transfer Partners.

Burke described Tuesday’s study as “the most complete compilation to date of national scientific data on the relationship of drinking water resources and hydraulic fracturing.”

“EPA’s assessment provides the scientific foundation for local decision makers, industry, and communities that are looking to protect public health and drinking water resources and make more informed decisions about hydraulic fracturing activities,” he said in a statement.

According to the report, drinking water can be contaminated at any stage of the fracking process.

Still, the EPA says on its website that “data gaps and uncertainties limited EPA’s ability to fully assess the potential impacts on drinking water resources locally and nationally.”

“Because of these data gaps and uncertainties, it was not possible to fully characterize the severity of impacts, nor was it possible to calculate or estimate the national frequency of impacts on drinking water resources from activities in the hydraulic fracturing water cycle.”

Read related Tribune coverage:

Author: KIAH COLLIER – The Texas Tribune

Analysis: In Texas, You Can Fight City Hall

“Local” might be the byword for fancy farm-to-market restaurants, but it can be a dirty word at the Texas Capitol.

The state Legislature has become the appeals court for the state’s local governments. Companies and industries snubbed by local laws are increasingly asking state lawmakers to turn things their way — and it’s working.

In 2015, the Legislature overrode a Denton law banning hydraulic fracturing — fracking — within the city limits. Denton voters put the ban in place, but the industry cried foul. Wells were in place before the houses of the not-in-my-backyard homeowners were even built, industry representatives argued, and their property rights were at stake. They also argued — you’ll hear a version of this phrase in almost all of the local-vs-state skirmishes — that overarching state laws are more desirable that “a patchwork of local regulations.”

A herd of cities lined up against that one, but oil and gas won the day: The repeal of the fracking ban passed the House 125-20 and the Senate 24-7. The governor signed it.

Industry is not always opposed to local regulation. It’s still legal to smoke in public places in several Texas cities and towns. Many groups — health associations and others — have lobbied hard, but the absence of an uproar from businesses seems to have made a difference.

The same is true for a statewide ban on texting while driving. The House sponsor is a powerful one — former Speaker Tom Craddick, R-Midland. Sure enough, the bill was approved by the House 104-39 three months before the end of the 2015 legislative session. But the session ended without a floor vote in the Texas Senate.

Several of the mobile phone industry’s big players have run expensive public service campaigns against texting while driving, and they have even testified in favor of the legislation. But they didn’t bring the heat the energy folks brought to that fracking measure.

The next tests will start when the Legislature meets for its next regular session in January. This time, one big fight involves local regulation of drivers for ride-hailing companies like Lyft and Uber. Another is a straight-up attempt by the state to limit local officials’ ability to raise taxes without voter approval.

The ride-hailing issue sets up like the fracking issue did. Austin voters were asked whether the ride-hailing drivers should pass security checks, like cab drivers do. Uber and Lyft said they would leave if voters approved the regulations, irking voters with their methods and the explicit threat. Voters backed the regulations. The companies left. They threatened to leave Houston, too, over regulations there.

Industry allies in the Legislature have promised to file a statewide ride-hailing law that doesn’t hobble the companies.

State Sen. Don Huffines, R-Dallas, has been openly critical of the Austin regulations. He was on a panel on the subject at last weekend’s ttQuoteTexas Tribune Festival, and boiled his objections down to a couple of tweets after it was over. “Local control is great, but it’s not a blank check to violate economic or personal liberty,” he said in one. “I’m for personal responsibility, and I trust Texans to make good decisions in the absence of heavy-handed government regulations,” he tweeted a few minutes later.

The property tax proposals are the latest attempts by state officials to control local property tax increases. The state doesn’t have a property tax itself — that’s unconstitutional — but cities, counties and school districts are state inventions and are subject to state regulation and some control. And in this case, some state officials want to give voters more control over property tax increases.

That’s not how the local governments see it, however. They believe, with some evidence, that state officials just want to make it harder to raise the money they contend they need to do what their voters demand of them. Some take it further, saying the need for more tax money is driven, in part, by what the state requires local governments to do.

You might argue that the property tax debate is a case of checks and balances, of one set of elected officials keeping another set of elected officials in line. You might even be right.

Other cases — fracking, smoking, texting while driving, hailing rides, banning plastic supermarket bags among them — are efforts to replace local laws with state ones.

State officials are sensitive to local control. City officials are sensitive to being overruled. One person who has held both jobs — Houston Mayor Sylvester Turner, who served in the House for 27 years — told a roomful of people at TribFest that the governments should work together, like parents disciplining their children.

“We need transportation options, and they do include Uber,” Turner said. “I want them to stay in the City of Houston. I love them.

“But you know, if the state of Texas, the Legislature, says to Uber, ‘Follow the rules of the localities,’ we wouldn’t have a problem. One of the reasons we have a problem — it’s like children going from the mother to the dad. Mom says no. They go to the dad. And in this case, if they can go from Houston and go to Austin to the Legislature, then it makes it very difficult to parent that individual.”

More columns from Ross Ramsey:

  • Voters in the state’s largest school district can say no to sending money to other school districts, putting Texas lawmakers in a bind and — maybe — raising their own school taxes in the process.
  • The late Donald Trump endorsement by U.S. Sen. Ted Cruz — considered before that actually took place — will require some difficult political acrobatics, both now and after the November election.
  • Tom “Smitty” Smith, a colorful lobbyist and liberal activist who turned Public Citizen Texas into a strong voice on environmental, utility, consumer and ethics issues, is hanging up his spurs after 31 years.

Disclosure: Uber and Lyft have been financial supporters of The Texas Tribune. A complete list of Tribune donors and sponsors can be viewed here

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Author:  – The Texas Tribune

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