There Will Be Water

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Pickens at his Mesa Vista ranch in 2003 David Bowser/Black Star

Pickens as a boy in an undated photo

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He did, sometimes, make hundreds of millions when he sold his stakes. And shareholders did, often, benefit. He was briefly the most famous businessman in America, a corporate raider who always wished people would call him a shareholder activist.

By the mid-1990s, though, Pickens had fallen. After a brutal and expensive fight with Unocal, he gave up his raiding. He lost control of Mesa Petroleum after a series of financial and managerial miscalculations. He went through an expensive divorce from his second wife and retreated to his ranch. It was in the midst of this that he acquired a newfound regard for water as a commodity that should be bought, sold, and traded for the benefit of those who own it and those who can afford it.

In 1996 a local water utility made its first big purchase of groundwater rights in the Panhandle. The utility, known as the Canadian River Municipal Water Authority (CRMWA), bought nearly 43,000 acres of water, some of it just south of Pickens' ranch, for $14.5 million. (Property owners in Texas, and elsewhere, can sell their water separately from the land above it.) That Roberts County would become the stomping ground for the Panhandle water wars was perhaps inevitable. Underneath it lies one of the world's largest repositories of water, moving slowly among layers of gravel, sand, and silt. The Ogallala Aquifer stretches from Texas to South Dakota and contains a quadrillion gallons of water—enough to cover the U.S. mainland to a depth of almost two feet. Yet the extensive irrigation necessary to grow corn, cotton, and wheat in west Texas has left the Ogallala nearly depleted in some places. It is not an aquifer that is easily or quickly replenished. But the land in Roberts County is unsuited for agriculture, and so the Ogallala there is largely untapped.

Since the early 1900s, groundwater use in Texas has been governed by what's quaintly called the rule of capture, otherwise described as the biggest pump wins. It lets landowners pump as much water as they can, even if doing so drains neighboring properties. This put Pickens in an uncomfortable position: If he didn't sell his water to CRMWA, the utility could potentially suck some of it right out from under his ranch. So he tried. But "they told me to kiss off," he says. Kent Satterwhite, who was then assistant general manager, says: "Boone was fairly insistent that we buy his water. It made him mad that we didn't have the money to buy it." That was the first of several contretemps between Pickens and various local water authorities. Pickens next approached the city of Amarillo, which also had begun to acquire water rights in Roberts County. It wasn't interested, either, though it did purchase water from several other nearby landowners. "Amarillo was pissed off at me," says Pickens, who has a long and fraught history with the city. When Amarillo turned him down, Pickens felt surrounded. "I had to find a buyer for my water," he says, "or I was going to be drained."

LANDOWNERS DIVIDED

There's a saying in Texas: "Whiskey's for drinking. Water's for fighting." Pickens decided to fight. In 1999 he created a company called Mesa Water and began to accumulate water rights so he could strike a deal with another city altogether. The hell with Amarillo. Pickens was confident he could sell his water: The population of Texas was expected to jump 40% by 2020, mostly in urban areas one dry season away from drought.

Pickens' decision to get into the water business was regarded by some in the Panhandle as nothing more, or less, than a shrewd move by a man who knows the value of commodities. The economy of the High Plains region is based on people taking out the natural resources and selling them. If water that can't be used for farming ends up in the taps of city residents hundreds of miles away, that's fine. Pickens says he's buying stranded, surplus water that needs to be rescued. Kim Flowers, who runs an 8,300-acre ranch in Roberts County, speaks for many landowners when she says: "People can do with their water as they wish as long as they're not wasting it."