Dallas Millionaire's $15.9 Billion Gallon Water Extraction Plan Ignites East Texas

Outcry Over Massive Groundwater Project Threatens Local Communities

Dallas hedge fund manager Kyle Bass is seeking state permission to drill exploratory wells into the vast Carrizo-Wilcox Aquifer in East Texas, setting the stage for what could become one of the largest private groundwater extraction operations in American history. Through his firm Conservation Equity Management, Bass plans to install more than 40 high-capacity wells across 11,000 acres in Anderson, Houston, and Henderson counties, potentially draining 15.9 billion gallons annually—more than triple the water consumption of the city of Longview.

The proposal has triggered fierce opposition from hundreds of East Texans who depend on the aquifer for their homes, businesses, and agricultural operations. Local residents warn that the massive extraction could devastate rural communities that have relied on these groundwater resources for generations.

Residents Fight Back Against Water Grab

At a packed public hearing in Jacksonville City Hall on June 19, 2025, tensions exploded as residents, county officials, and state lawmakers united in opposition to Bass's drilling permits. The 11-hour hearing drew standing-room-only crowds, with people "wrapped around this building that had been waiting in the heat" to voice their concerns.

"If this goes through, we will not have water to survive here," one resident declared during the hearing. "You'll kill the communities. You'll kill these counties."

Mark Calicutt, owner of Calicutt Drilling Inc., a third-generation water well drilling company in East Texas, described the alarming decline he's witnessed firsthand. "It's dropping," Calicutt told The Texas Tribune of the aquifer water levels. "It's dropping faster and faster each year. And if he does what he says he's going to do, it will deplete the aquifer."

The controversy has drawn criticism from multiple state legislators, including Representative Trent Ashby, R-Lufkin, who characterized the project as setting "a dangerous precedent" during testimony before lawmakers. Ashby emphasized that the project "is not for our cities, it's not for our schools, our industries or our land owners".

Texas Water Law Under Scrutiny

At the heart of the controversy lies Texas's century-old "rule of capture," which Bass has called the "bedrock principle of Texas property law". Under this doctrine, groundwater belongs to whoever owns the land above it, with few restrictions on extraction volumes or purposes.

According to Texas water attorney Shauna Sledge, "the rule of capture provides that, absent malice or willful waste, landowners have the right to take all the water they can capture under their land and do with it as they please, and they will not be held liable by their neighbors".

This legal framework has created significant challenges for local groundwater conservation districts attempting to regulate large-scale extraction. The Neches & Trinity Valleys Groundwater Conservation District, which oversees the affected counties, currently operates without production limits. District attorney John Stover noted that while the district can review drilling applications, its regulatory options remain constrained by the rule of capture.

A 2012 Texas Supreme Court decision further strengthened property rights by allowing landowners to bring regulatory takings claims against conservation districts that deny groundwater access. Many districts lack the financial capacity to defend against such legal challenges, creating what critics describe as an unbalanced playing field favoring large-scale operators.

Environmental and Economic Concerns Mount

The Carrizo-Wilcox Aquifer spans an enormous area, extending from the Louisiana border to Mexico across 66 Texas counties. The Texas Water Development Board estimates the aquifer contains between 1.3 billion to 3.9 billion acre-feet of recoverable water storage—a vast resource that has supported East Texas communities for generations.

However, recent research from Texas A&M University raises alarming questions about the aquifer's sustainability. Scientists have documented that land-use changes and "thicketization"—the encroachment of dense woody vegetation—may be reducing groundwater recharge rates by 100-fold annually in some areas.

"We are relatively confident that parts of the recharge area are being dominated by thickets, causing dramatic reductions in recharge from rainfall," said Bradford Wilcox, an AgriLife Research professor studying the aquifer. The water table has already dropped more than 150 feet over recent decades, according to university research.

Local agricultural leaders warn that even modest reductions in water availability could devastate East Texas's pine and cattle industries. Anderson County Commissioner Greg Chapin noted that a single pine tree requires "100 to 150 gallons of water per day from the top of the groundwater reservoirs". "We can just take a simple three to four week drought and start suffering on production in our tree industry, our cattle industry, our crop industry—the whole bit," Chapin explained.

Scientific Uncertainty Fuels Community Fears

Bass insists his current application focuses solely on scientific study, not extraction. His company has commissioned three hydrogeologic engineering firms to model the subsurface aquifers, seeking to "verify findings" through exploratory drilling before considering large-scale operations.

"Should the data we gather from the exploratory test wells indicate less water is available than our hydrogeological and engineering studies project, we will re-evaluate our plans and modify or terminate the project accordingly," Bass told The Texas Tribune.

However, local drilling experts question the reliability of computer modeling versus field experience. "I can make a computer model say whatever you want a computer model to say," Calicutt said. "But the real world data I see every day—that Mr. Bass and his hydrogeologists do not see every day because they do not work on these water wells every day, is completely different."

Kelley Holcomb, general manager of the Angelina & Neches River Authority, expressed broader concerns about proceeding without a comprehensive understanding of potential impacts. "Nobody knows how much water is down there," Holcomb said. "That's why I keep going back to this. We won't know until they do it, and once they do it, it's too freaking late."

Broader Water Crisis Intensifies Pressure

Bass's proposal emerges amid growing recognition that Texas faces a statewide water supply crisis. The state's dramatic population growth and increased power demands have stressed existing water resources, with the Texas Water Development Board projecting the need for $154 billion in water infrastructure investments over the next 50 years.

Conservation Equity Management positions its projects as addressing this crisis, stating on its website that "Texas has the water it requires, including 5 billion acre-feet of groundwater stored in aquifers across the state. However, the water is not available where it is often most needed, and Texas does not have the necessary infrastructure to move water efficiently from the source to areas across the state".

The company describes its approach as reflecting "a responsible path forward for helping meet the growing water needs of communities impacted by the rapid pace of change in Texas". However, critics note that Bass's proposal lacks specifics about where extracted water would be transported or which communities would benefit.

Bass's project isn't unique on the Carrizo-Wilcox system. In Central Texas, the city of Georgetown has signed contracts to eventually extract 89 million gallons daily from the same aquifer, raising concerns about cumulative impacts across the vast groundwater system.

Legal Battle Ahead as Opposition Solidifies

The controversy has already moved beyond local opposition to potential legal challenges. Bass submitted his drilling application to the Neches & Trinity Valleys Groundwater Conservation District in 2024 and has requested that the matter be transferred to the State Office of Administrative Hearings for review.

While administrative law judges' decisions aren't binding on local districts, departing from judicial recommendations requires substantial justification. This legal pathway could provide Bass with leverage to advance his project despite local opposition.

Meanwhile, Athens Mayor Aaron Smith has joined the growing chorus of municipal opposition, describing the proposed extraction scale as "excessive, irresponsible, and unacceptable" in correspondence dated June 16, 2025. County judges from multiple affected counties have filed official protests, as have major employers like Sanderson Farms, warning that the project could threaten both jobs and local water supplies.

The precedent established by this case could influence similar battles across Texas and other western states where billionaires and investment firms are increasingly acquiring water rights. Critics describe the trend as potentially creating dangerous concentrations of control over essential natural resources in private hands.

Community Mobilization Continues

As the regulatory process continues, opposition groups are mobilizing across East Texas to challenge what many characterize as an external threat to their way of life. The packed Jacksonville hearing demonstrated the depth of local concern, with dozens of residents standing to register formal opposition to the drilling permits.

"Folks, it's clear what's going on. This is a grab for water. And it's by a rich man who's trying to enrich himself to the detriment of all of these good people here," one speaker declared at the hearing.

The controversy highlights fundamental tensions between private property rights and community resource protection that extend far beyond East Texas. As water scarcity intensifies across the American West, similar battles are likely to emerge wherever large-scale extraction operations target aquifers that local communities depend upon for their survival and economic prosperity.

The Neches & Trinity Valleys Groundwater Conservation District faces the challenging task of balancing state property law with local conservation concerns. Their ultimate decision on Bass's drilling permits could set important precedents for how Texas manages its groundwater resources in an era of increasing scarcity and growing demand from powerful outside interests seeking to monetize the state's underground water wealth.