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Groundwater is water that is found underground in the cracks and spaces in soil, sand and rock.

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In addition to groundwater development, some other water management strategies include conservation and creating new surface reservoirs. Conservation is an important component of meeting our future needs and Forestar actively implements water-efficiency in its development activities and is an advocate of conservation as part of the solution. However, conservation alone will not meet our future needs. In addition, new surface reservoirs are difficult to fund. Moreover, permitting and estimated development time is 20-30 years and can have a greater environmental impact than groundwater solutions.

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Water is critically important to our lives and the environment, but its importance hasn't always been reflected by investment in water infrastructure. Texas has about the same amount of water storage capacity today as in the early 1970's. In the last 40 years, Texas' population has increased by nearly 14 million and it is expected to increase by another 12 million by 2040. That's the equivalent to adding the combined metropolitan areas of Dallas, Fort Worth, and Houston. It is time to invest in our future. Some parts of Texas are already experiencing shortages, and communities face important choices about allocating resources for smart, sustainable, environmentally responsible growth. If we make the right choices now, we can satisfy the many different needs for water in a balanced way that's sustainable for the long term, before it becomes a crisis. If we do nothing, we increase the likelihood that we'll have to make decisions in crisis-mode, based on short-term considerations rather than the long-term good. In Central Texas, for example, the Lower Colorado River Authority (LCRA) has issued a detailed report that makes finding new groundwater sources a priority.

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On a national scale, it is estimated that we use an average 1,100 gallons per person per day in the US for all water uses. In Texas alone, an estimated additional 8.3 million acre-feet will be needed by 2060 to meet water needs for homes, business, agriculture, industry and power with the state. An acre-foot is 325,851 gallons, approximately enough to supply two or three families with water for a year. In the Water for Texas 2012 State Water Plan, the Texas Water Development Board states: "Annual economic losses from not meeting water supply needs could result in a reduction in income of approximately $11.9 billion annually if current drought conditions approach the drought of record, and as much as $115.7 billion annually by 2060, with over a million lost jobs."

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Permits would need to be obtained from local groundwater conservation districts. Those groundwater conservation districts are charged with protecting groundwater resources and ensuring they are used responsibly and sustainably.

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While the federal Clean Water Act protects water quality, questions of groundwater use are left to the states. Groundwater districts report annually to the Texas Water Development Board, with the Texas Commission on Environmental Quality also playing an important role in protecting groundwater.

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Beyond receiving a high quality water supply, local residents could benefit in several ways: Landowners benefit from royalty payments, local water districts benefit from fees, and the community benefits from additional revenue circulating through the local economy. In addition, extra revenue can be critical in helping some ranchers to continue ranching, thus helping to preserve open space and a traditional ranching heritage.

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An off-channel reservoir is an open body of water which is separated from a water source like a stream or river. Water is diverted from the water source into the reservoir and stored for later use.

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Environmental regulations were passed by EPA and the USFWS to require projects or activities that cause negative impacts to the environment to "compensate" for those negative impacts by repairing/protecting similar environmental resources within the same geographic area. These compensation requirements are referred to as credits and can be met by the project applicant enhancing or restoring other damaged habitats or purchasing credits from entities that have repaired damaged habitats in advance. Examples are wetland, stream, and rare/endangered species credits.

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Mitigation banks are part of a Federal program designed to improve/preserve sensitive natural resources and earn what is referred to as "mitigation credits". These "banked" mitigation credits are approved by federal and state regulatory agencies through an Interagency Agency Review Team chaired by the U.S. Army Corp of Engineers. The banks have listings of mitigation credits that can be purchased by applicants to compensate for the negative impacts to natural resources such as wetlands, steams, and endangered species. Mitigation banking has several advantages over traditional project specific mitigation including a more efficient and cost-effective permit process, certainty regarding a project's environmental impacts and associated compensation (credits), as well as the ability to leverage the substantial resources and expertise of the creditor.