Many rapidly growing cities need to develop or acquire additional water supplies to meet current or future demands. Traditionally, those demands have been met by constructing new reservoirs or drilling water wells. Recently, however, those traditional strategies are being questioned. Reservoir development is becoming more costly and time-consuming, since many of the best reservoir sites have been developed and many projects face environmental and legal challenges. Groundwater supplies in many regions of Texas are now of limited quality or quantity.
Water is a commodity that is essential for life.
In a typical water marketing scenario, water rights or water supplies would be purchased on the open market from willing sellers, usually agricultural producers. In theory, purchasers could pay less for the water or the water rights than would be required to develop new water supplies, and the newly acquired supply could be put to use much more rapidly. From a seller's point of view, the economics of water rights transfers may also make sense. In many instances, individuals in the lower Rio Grande Valley are receiving a higher price from the sale of their water rights than they originally paid for their land. Texas' depressed agricultural economy may lead to increased sales of water rights.