Jul 13, 2022 - News

Texas dam proposal tied to oil and gas executive

People playing in the South Llano River.
People playing in the South Llano River, at a state park in Junction, about 20 miles downstream of a proposed dam. Photo: Rob McCorkle via Texas Parks and Wildlife Department

A limited liability company has applied to dam a stretch of a key Texas waterway, over the opposition of environmental groups and downriver rural county officials — and the director of the LLC is the board chairman of oil and gas company Phillips 66, Axios has discovered.

Why it matters: The waters of the South Llano River ultimately feed the Colorado River, the chief source of drinking water for Austin and other communities of Central Texas, and if the proposal is approved by state officials it could open the way to more dams — and ratchet up competition among cities and industries for increasingly precious H20.

Details: Waterstone Creek LLC has applied to build a dam for recreational purposes that would impound nearly four million gallons of water in Edwards County, at a site about 150 miles due west of Austin.

  • Be smart: An LLC is an entity that helps shield business owners' personal assets from the business's debt and lawsuits.

The intrigue: Per state records, the directors of Waterstone are Gregory C. Garland and Laura G. Garland — the Phillips 66 board chairman and his wife.

  • Gregory Garland also served as CEO of Phillips 66 through June.
  • Garland's pay was about $21 million in 2021, per the company's latest proxy statement.
  • The chief address associated with the LLC — 11610 Bistro Lane in Houston — was registered through 2020 to the Garlands, through an entity called Cayman Family Trust, per Harris Central Appraisal District records.

Calling the issue "a personal matter," a spokesperson for Phillips 66 declined to answer questions about the proposal.

  • Garland and the project's engineer did not return phone messages.

County commissioners in at least three Hill Country counties have passed resolutions opposing the dam application.

What they're saying: "This is the most important thing we've seen in front of the Commissioners Court," Llano commissioner Jerry Don Moss said last month, per the Daily Trib. "The Llano River affects the town, not only Llano, but all the way down to the city of Horseshoe Bay. It runs all the way from one end of the county to the other."

  • "In 2015, we were looking at trucking water into the city of Llano," Commissioner Linda Raschke said. Given the drought, she continued, "We're in dangerous territory right now."
  • The South Llano is a tributary of the Llano River, which terminates in the Colorado River, which is the chief source of water for Austin.

The dam, which would be for recreation purposes, could be up to six feet tall, per the Llano River Watershed Alliance, which opposes the project.

  • "Such a dam would either restrict or stop the ecological benefits of the water flowing from the existing pool through the gravel bar below it, as well as the flow itself," per the watershed alliance.
  • Yes, but: The draft permit for the dam project says Waterstone Creek LLC will not impound water during low-flow conditions.
  • Of note: Staff at the Texas Commission on Environmental Quality found that the dam proposal, which was submitted several years ago and has slowly been going through review, would "not result in practical impacts to other water rights in the basin."

What's next: The three governor-appointed members of the Texas Commission on Environmental Quality could take up the matter later this year — but whatever they decide, expect a long court battle before anything is fully settled.

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