Around the turn of the Century, most of East Texas was concerned with conservation of soil and water, drainage, control of floods and navigation, channels, reforestation and promotion of recreational facilities. The area within the Lower Neches Basin during this period was largely agriculturally oriented. In the northern counties of the district, cotton, potatoes, oats, tomatoes and hay were the principal crops. In the southern counties, rice was the crop of choice because of the heavy, dense soils found in that area and the abundance of freshwater. The central counties supported a thriving timber industry. Beef cattle production was also gaining importance.
Throughout much of the basin were numerous oil and gas fields. Indeed, East Texas is the cradle of the modern oil and gas industry. The Beaumont-Port Arthur area became the oil refining capitol of the world, when six major oil refineries prospered within Jefferson County. To provide access to world wide markets for products from these refineries, the Neches River was deepened and straightened to the Gulf of Mexico for ocean-going vessels. Ironically, the deepwater channel, which was so valuable to the development and prosperity of the area, also posed a threat to the freshwater supply. Saltwater from the Gulf of Mexico moved inland to the freshwater intakes of the cities, industries and farms. This problem created the need for an organization that protected the freshwater supply and increased the availability of water through storage and distribution systems. To accomplish this, the 43rd Legislature of the State of Texas in 1933 created the Lower Neches Valley Authority as the second River Authority in the State.
In September, 1936, shortly after the creation of LNVA, a public hearing was held in Jacksonville, Texas to recieved comments and proposals regarding regulation, conservation and utilization of the waters of the Neches River system as well as the control of floods. It was emphasized that LNVA had investigated the problems and were developing a plan designed to address these type issues in the lower Neches River basin. LNVA’s plan included construction of a large reservoir on the Neches River near Rockland and a regulated dam near Town Bluff for the purpose of storing water and regulating the flow of the river. To deliver the stored water to its area of need, LNVA proposed to build a canal to transport water from these reservoirs to consumers within Jefferson, Liberty and Chambers Counties. The majority of these consumers were rice farmers, but it was clear that the burgeoning industrial water demand faced critical needs, which must be met to assure the industries’ future and to support their employees.