Water: The Lifeblood of Texas Economic Development

July 21, 2014 by Brad Lingvai

Water: The Lifeblood of Texas Economic Development

Texas politicians are fond of telling businesses in other states that they should consider relocating to the Lone Star State. Low taxes and a strong workforce are indeed appealing factors for many companies in Texas. But water is an equally large factor when it comes to economic development, and in Texas it can also be a source of contention.

Whether it’s drinking water for new residents who come to an area as a result of new employers, irrigation for crops, or part of production in a semiconductor manufacturing plant, water is vital to the state’s economic development.

This blog post is part of an 8-part series that will be published throughout July and August. Visit our Water in Texas page to read all of the articles.

Yet fast growth among cities, a long-lasting drought, and robust economic development have meant that in some parts of the state companies, farmers, and cities are finding themselves in pitched battles over water.

 

Photo by Jason Tessmann
Photo by Jason Tessmann

One of the largest examples of this is a fight between chemical and plastics manufacturer Dow Chemical and local water authorities and farmers. Dow is one of the largest and oldest users of water from the Brazos River. That river also supplies cities, power plants, and agriculture, and has been hard hit in the drought.

In 2009, the drought lowered the flow of the Brazos so much that Dow’s pumps could not operate. Because Dow is one of the oldest users on the river, it can assert senior water rights – and that summer it did, which meant junior upstream users like farmers had to cut back.

Nor does the fight look like it will resolve quickly; the Brazos River Authority is seeking a new permit that would allow it double what it takes from the river, an effort Dow and others are fighting.

“Conservationists and wholesale water suppliers alike warn that in a booming state that’s been slow to address its long-term water needs, companies looking to relocate to Texas could see Dow’s experience and reconsider,” says a Texas Tribune article on the company’s water needs. “They also say that companies in Texas could engage in expensive battles with agricultural and other water users, including fast-growing cities —and that the state is not prepared to accommodate all of its conflicting water demands.”

Brazos River near Freeport

 

Elsewhere in Texas, persistent drought has dealt huge blows to employers. In early 2013, a beef processing plant in Plainview shut its doors after drought cut down the number of cattle coming into the plant. That meant 2,300 people, 10 percent of the town’s population, were suddenly unemployed.

But water can also be a valuable recruiting tool in economic development. Floyd Akers, executive director of the Pflugerville Community Development Corporation, says the city has the ability to sell treated, reused water to manufacturers and office tenants for chilling and production purposes at a reduced rate.

Pflugerville’s recently-built One Thirty Commerce Center was constructed near a treatment plant, which means that gray water can easily, and cheaply, be transported to businesses there. That reused water can be chilled and sold to tenants for a much lower rate than municipally supplied water would go for. That means tenants are saving money, and Pflugerville is saving water that would otherwise be sent downstream.

“It’s a fantastic tool to attract employers,” Akers says. “The level of investment these developers are making in Pflugerville is an indication that we are moving in the right direction with our economic development strategy.”

Whether it’s a resource for recruitment or a source of legal battles, water is shaping economic development in Texas in new ways thanks to dry conditions and population increases. The way Texans decide it’s used, and by whom, will likely shape the state’s economy for years to come.

We want to hear from you….leave your comments, opinions, and other thoughts about water and economic development below!

Visit our Water in Texas page to read all of the articles in this special BIG RED Blog series.

Written by Brad Lingvai

Brad Lingvai

Mr. Lingvai is the Commercial Services Market Leader in the BIG RED DOG Austin office. He is also a co-founder of the firm and has been a leader on hundreds of central Texas projects since the founding of BIG RED DOG in 2009. Austin-area projects of note that have benefited from his expertise include Belterra, Waller Creek, the Robert Mueller Municipal Airport (“Mueller”) redevelopment project, and The Domain shopping center. He has extensive experience with design and coordination of water, wastewater, and drainage studies and systems, water quality and detention ponds, and conceptual layouts of gas, electric, and telecommunication lines. Mr. Lingvai received his Bachelor of Science in Civil Engineering from the The University of Virginia (Charlottesville, VA) and is registered as a Professional Engineer in the State of Texas.