Andres Castillo and Jake Steen practice in Lloyd Gosselink’s 20-lawyer Water Practice Group in Austin, Texas. 

PFAS regulatory developments under the new administration

(The Trump administration plans to scale back on PFAS drinking water regulations.)

At issue:  The Trump administration has proposed significantly scaling back per- and polyfluoroalkyl substances (PFAS) drinking water regulations, reducing the number of regulated PFAS compounds from six to two, and extending compliance deadlines from 2029 to 2031.

Background:  PFAS are synthetic chemicals often referred to as “forever chemicals” due to their persistence in the environment and human body. In April 2024, the Biden administration finalized drinking water regulations for six PFAS compounds by establishing Maximum Contaminant Levels (MCLs)—legally enforceable limits for contaminants in public water systems. In Texas, 49 public water utility systems have publicly reported exceeding at least one of these limits; however, the current compliance date is in 2029.

Recent Developments: On May 14, 2025, EPA Administrator Lee Zeldin announced the agency would maintain MCLs only for two PFAS compounds (PFOA and PFOS) while rescinding regulations for the four other compounds (PFNA, PFHxS, HFPO-DA, and PFBS). EPA stated these four compounds will be “rescinded and reconsidered,” meaning the agency intends to withdraw the existing regulations and restart the rulemaking process. This process could result in changes to the slate of MCLs, depending on the nature of public comments and the EPA’s response to the same.

The new administration has also announced its intent to extend compliance deadlines from 2029 to 2031, with a proposed rule expected in Fall 2025 and a final rule in Spring 2026. These changes respond, in part, to concerns raised by water utilities and industry stakeholders about implementation costs and treatment feasibility. More broadly, this policy shift reflects the new administration’s move towards reduced regulatory oversight.

Who owns produced water? The Texas Supreme Court decides in Cactus Water Services, LLC v. COG Operating, LLC

(Texas Supreme Court Op. No. 23-0676)

At Issue: Whether produced water, when not expressly conveyed in an oil and gas lease, belongs to the mineral estate or the surface estate. 

Held: Produced water is legally considered oil and gas waste, rather than water, so title to the produced water belongs to the mineral estate unless expressly conveyed to the surface estate.

Background: COG Operating, LLC (“COG”) acquired oil and gas leases in Reeves County, granting COG the exclusive right to explore for and produce oil, gas, and other hydrocarbons. These leases, however, did not explicitly refer to ownership or the use of waste generated from production, including produced water. Produced water is a highly saline fluid generated as a byproduct of oil and gas extraction. Beginning in 2019, the same surface estate owners who severed the mineral estate to COG began entering into separate “Produced Water Lease Agreements” with Cactus Water Services, LLC (“Cactus”), conveying Cactus title to produced water flowing from COG’s oil and gas wells. This Texas Supreme Court Opinion resolved the legal dispute over ownership and control of produced water in this context since groundwater is owned by the surface estate.

The Court held that produced water is legally considered an oil and gas waste byproduct, rather than water reserved to the surface estate. In the Court’s view, while “produced water contains molecules of water, both from injected fluid and subsurface formations, the solution itself is waste—a horse of an entirely different color.” Resolution of this dispute between COG and Cactus ultimately hinged on the historical set of principles and practices governing the conveyance of produced water. The Court emphasized the established understanding that oil and gas operators are responsible for disposing of waste generated from oil and gas production. In the Court’s view, subsequent innovations and technological advances that make waste byproducts productive (in this case, produced water) cannot change the parties’ long-standing expectations pursuant to the deal that was struck at the time. The Court noted how oil and gas cannot be produced without simultaneously generating this hazardous byproduct, and thus, the COG’s right to produce hydrocarbons, as the mineral estate lessee, implicitly includes the right to handle and dispose of the resulting waste. Since COG’s leases did not expressly reserve for the surface estate any rights to the produced water, those rights transferred to COG by default as part of its lease.

Settlement round two? Latest developments in Texas and U.S. Bureau of Reclamation v. New Mexico and Colorado

At Issue: Whether New Mexico must limit farmers from pumping groundwater that is hydrologically connected to the Rio Grande to ensure the availability of Rio Grande flows for Texas and Mexico. 

Background and Complications: Texas originally initiated this lawsuit in 2013 to enforce its rights to water at and below Elephant Butte Reservoir in New Mexico under a 1938 Interstate Compact. Texas claims New Mexico’s failure to restrict groundwater pumping under state law is the reason New Mexico cannot deliver the quantities of Rio Grande water due to Texas under the Interstate Compact and a 1906 Treaty. New Mexico counterclaimed that Texas is partly responsible for inadequate surface water flows due to Texas’s unregulated groundwater pumping, allegedly inadequate downstream water management, and aging infrastructure. In 2018, the Supreme Court allowed the U.S. Bureau of Reclamation to intervene to protect its interests in the Interstate Compact and in its duty to deliver water to Mexico under the 1906 Treaty. Violations under the Interstate Compact can only be remedied by the U.S. Supreme Court.

Since this case was last covered in the November 2022 edition of Law+Water, Texas, New Mexico, and Colorado (named as a party primarily due to its presence in the 1938 Compact) reached a settlement in 2023 where New Mexico and Texas would establish a new formula for delivering yearly water targets under the Compact that takes into account historic groundwater production. The settlement contemplated splitting the share of available water, with 53% to New Mexico and 47% to Texas. The settlement would also have established accountability measures to ensure that future violations were addressed. Called a “Consent Decree,” the proposed settlement had to be approved by a majority vote of the Supreme Court in order to take effect. The U.S. Bureau of Reclamation opposed the proposed consent decree due to the settlement imposing new obligations under and potential violations of the 1906 Treaty with Mexico. The Bureau also opposed the new baseline water measurement formula proposed by Texas and New Mexico.

Despite support from the Special Master appointed by the U.S. Supreme Court to oversee the case, the U.S. Supreme Court struck down the proposed consent decree in 2024 by a 5-4 vote, with Justices Kavanaugh, Kagan, Sotomayor, and Chief Justice Roberts joining Justice Jackson in an ideologically diverse majority opinion. Justice Jackson and the majority determined Texas, New Mexico, and Colorado could not enter into this consent decree without the approval of the U.S. Bureau of Reclamation, given the Bureau’s position that the proposed consent decree did not address its “uniquely federal interests” in the case. The Supreme Court’s decision sent the parties back to the negotiating table to try to reach an agreement with the Bureau, or else move forward with the trial over the parties’ claims in the underlying suit.

Recent Developments: On May 12, 2025 (one month before the scheduled trial on June 9th), attorneys for the parties advised the Special Master that the parties are close to agreement on a new consent decree. The parties requested additional time to pursue the execution of a settlement and asked the Special Master to reschedule the trial for a later date. The Special Master commended the parties for their continued efforts to resolve the over-decade-long dispute. While the text of the new consent decree has not been released, the resolution of this dispute will represent a significant achievement in resolving interstate and international water disputes.