Letter of intent to purchase AbitibiBowater's Angelina County water holdings

LUFKIN, TX - Water is the "new" oil. It's a valuable resource in limited supply.  Generations of Lufkin residents will have no water worries thanks to a visionary move by the City of Lufkin.  The City has signed a letter of intent to purchase AbitibiBowater's Angelina County water holdings.  The Company ceased operations at the Lufkin mill in 2003, but owns 13 water wells, Kurth Lake and surface water rights in the Angelina River.

Lufkin Mayor Jack Gorden says, "This transaction could be the single largest event to secure the future of Lufkin. Not only would this provide our residents with an adequate water supply but it will give us another tool to use in attracting new businesses that will bring new jobs to our City."

The City Council has signed a letter of intent with AbitibiBowater to pay $15 million dollars to purchase Kurth Lake, water rights, land, transmission lines, and structures in Angelina County. Council has also begun the process of issuing certificates of obligation to pay for the acquisition. City Council member Phil Medford notes, "Small, rural cities like Lufkin face an extremely difficult political battle with larger metropolitan areas over this precious resource. The City was faced with this unusual opportunity and I believe we have acted in the best interest of the taxpayers to take advantage of it."  The $15 million dollar deal is far less expensive than other options considered to secure additional water and Council member Lynn Torres adds, "We are being good stewards of a tremendous local resource. We cannot afford to pass this up."

The Mayor applauds AbitibiBowater for its commitment to the people of Lufkin.  Though the mill is closed and its land and buildings are for sale, the Company has put Lufkin in the unique position of having an abundant supply of water for future growth and economic development. In Council member Rose Faine Boyd's words, "Water is in limited supply in Texas. People are already fighting over it. Since we have the option on Abitibi's water, we need to take it before a larger city comes in and tries to get the water rights."

According to the Texas Water Development Board, "Water rights are the most sought after commodity in our country today - especially in Texas where the population is expected to double by 2060."  City Council member Don Langston adds, "Lufkin's water will be the envy of every city in the nation.  Besides taking care of our residents, we will be able to provide both treated and untreated water for business and industry at a far better rate than our competitors. That will have a huge impact on economic development." 

In addition to the increased capacity due to the AbitibiBowater acquisition, the City maintains the water rights it purchased from Lake Sam Rayburn in the 1960s.  That agreement provides access to 28,000 acre feet of water a year.  In order to use that water, the City would have to treat the water and pump it to Lufkin at a cost in today's economy of about 80 million dollars.  City Council member Rufus Duncan insists it's a no brainer, "This advantageous purchase will save taxpayers vast amounts of money in the future.  This is cheap compared to the more than 80 million dollars to pipe water in from the Lake."

The AbitibiBowater agreement gives the City immediate access to ground and surface water and to a reservoir for storage.  It delays the need to use water from Rayburn.

How extensive are AbitibiBowater's water resources in Angelina County?

  • Water wells:  13 groundwater wells.  2 already tied into the City of Lufkin system for emergency use. The average daily use of the 13 wells is 8.3 million gallons/day.  The available combined capacity is 13.3 million gallons/day. This is the least expensive source of water with the smallest financial impact on Lufkin consumers.
  • Angelina River:  Surface water rights to 19,100 acre feet/annually from the Angelina River.
  • Kurth Lake:  16,200 acre feet of surface water storage.  This can be used as a reservoir for water pumped from the Angelina River and/or from Lake Sam Rayburn in the future.

So what does this mean to Lufkin residents?  Council member R.L. Kuykendall says, "It assures a safe, adequate water supply for our great, great grandchildren and their children."  City officials say customers will see far less in the form of rate increases over time because of the AbitibiBowater acquisition.

Today, Lufkin can pump 17 million gallons of water a day. Eventually, the City will be able to pump five times that amount. That extra water can mean "extra" revenue for the City and its residents.