gas production, and the Court notes that applying water-use limitations to produced water would only frustrate, not facilitate, the production of minerals ( Id. at 8, 24). As noted, to facilitate production, produced water must be swiftly handled and disposed of, and the lack of infrastructure operated and owned by Cactus, along with most surface estate owners, would make production next to impossible. The Court leans on this argument when confirming that the right to produce hydrocarbons necessarily encompasses the right to produce and manage the resulting waste ( Id. at 18). Finally, the Court rejected Cactus’ oversimplified argument that produced water qualifies as ‘water’ simply because it contains water molecules. As previously discussed, produced water and water are not interchangeable, despite sharing some chemical properties (Both water and produced water may contain H2O molecules, along with a plethora of similar and dissimilar molecules). To further prove this point, the Court referenced Brief of Amicus Curiae Permian Basin Petroleum Association at 8-9, which listed substances such as blood plasma, vodka, and concrete, each of which contains water molecules, but is not considered ‘water’ ( Cactus at 23). While extreme, these examples underscore the Court’s point: the mere presence of water molecules does not render produced water as ‘water.’ Produced water and water are treated differently because they are different (The Concurring Opinion contends that raising the issue of ownership based on the nature of the produced water is unhelpful to the overall analysis, as it is clearly both water and waste. Cactus Water Servs., LLC v. COG Operating, LLC, No. 23-0676 (Tex. June 27, 2025) (Busby, J., concurring). “The fluids include groundwater originally belonging to the landowners, and they are also classified by statute and rule as oil-and-gas waste, which the lessee has a duty to handle and dispose of safely.” Id. The focus should not be on the nature of the produced water, but on whether the landowners leased the groundwater to the lessee. Id. To this, the Concurrence agrees with the Majority Opinion. The incidentally produced subsurface water was included in the Leases’ hydrocarbon conveyance. Id.). IV. Concurrence
The Concurring Opinion emphasized that the Majority’s holding is a narrow one and noted that this case did not resolve three key issues. First, the Majority Opinion did not decide surface owners’ rights to contract differently as to the ownership of groundwater produced and subsequently separated from hydrocarbons. For this, the Concurrence references Section 122.002 of the Natural Resources Code ( Id . at 3-6). This Section creates default rules for ownership of fluid oil and gas waste when a contract does not provide otherwise. Specifically, the statute provides that ownership of the fluid oil and gas waste changes hands, not at separation of the fluid and the hydrocarbons, but when it is used by or transferred to a person who takes possession of it for the purpose of treating it for a subsequent beneficial use ( T ex . N at . R es . C ode § 122.002(1)). Therefore, a surface owner could contract with the lessee to retain ownership of the groundwater component of fluid oil and gas waste. However, the surface owner would then be charged with the safe disposition of said groundwater component. Second, the Court did not address ownership of unleased minerals or other non-hydrocarbon substances that may be produced along with leased minerals. The Leases at issue in this case only conveyed “oil and gas” or “oil, gas, and other hydrocarbons.” No non-hydrocarbon minerals were leased, such as salt or potash ( Cactus Water Servs., LLC v. COG Operating, LLC , No. 23-0676 (Tex. June 27, 2025) (Busby, J., concurring) at 5). Could this mean lost economic opportunity for lessors? Third, the Concurrence states that the mineral lessee’s obligations to the landowners as
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