Conservation and environmental groups are unhappy with the state’s first step towards regulating the use of treated produced water, a toxic waste byproduct of oil and gas activity, outside the oilfield.
The state Oil Conservation Division (OCD), which sits within the state Energy, Minerals and Natural Resources Department (EMNRD), released a proposed rule amendment in late June to align its produced water regulations with new mandates established in the state Produced Water Act, which was signed into law in 2019. The law established jurisdictional and legal clarity over produced water use in New Mexico and aimed to encourage oil and gas producers to reuse produced water when possible rather than rely on fresh water sources for oil and gas extraction.
As unconventional drilling exploded over the past few years in New Mexico, so has the amount of wastewater being produced. Every barrel of oil generates four to seven barrels of wastewater, of which oil and gas operators must pay to dispose. In 2018 alone, over a billion barrels of wastewater was produced in New Mexico.
Oil and gas operators are having a hard time disposing of that waste, and are increasingly looking for uses for the water outside the oil field. That’s led to a push among some oil-producing states to begin formulating new rules that would allow for produced water to be treated and put to use in other sectors, such as road construction and management, and even irrigation.
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Experts agree there is a dearth of scientific literature on produced water, how to treat it, and whether it poses a threat to public health or the environment. Critics of the Produced Water Act and the OCD’s proposed rule argue the state is rushing the regulations ahead of the science on the subject.
“My real big statement is look before you leap,” said Mariel Nanasi, executive director at New Energy Economy, which filed pre-hearing comments ahead of the OCD’s public hearing July 30. “Evaluate the science before you promulgate rules in the field.”
‘It’s the wild west’
The OCD’s proposed rule amendments only address produced water use within the oil and gas sector. In addition to tweaking definitions and other language around produced water, the new rule would explicitly allow oil and gas operators to reuse produced water for drilling, producing or enhanced recovery of oil and gas without the need for a permit, in an attempt to encourage oil and gas operators to reuse the wastewater in the oil field in lieu of using freshwater.
But Nanasi said that rule change is a step in the wrong direction for better managing produced water, and argued the OCD is already struggling to regulate industry spills and leaks as it is.
“This is an unregulated industry, essentially. It’s the wild west,” Nanasi said. “The oil and gas industry is acting with impunity.”
New Energy Economy’s pre-hearing filing points to OCD data indicating that, in 2018, there were 1,523 reported spills in the oil and gas sector, representing roughly 4.2 spills per day and including more than 10,000 gallons of produced water spilled each day. The filing also notes that currently half of OCD’s compliance officer positions are vacant.
“EMNRD and OCD have not established appropriate regulatory procedures and have failed to enforce the ones they have,” the filing states.
Joe Zupan, executive director of the water conservation nonprofit Amigos Bravos, told NM Political Report that reusing produced water within the oil field is something his group can “reluctantly support.” But Zupan said OCD needs to better track the wastewater in the state.
“The data that OCD has been collecting about oilfield operations is such a hodgepodge and is so inconsistent that it’s hard to evaluate and draw conclusions,” Zupan told NM Political Report. “How much produced water are we producing? Where’s it going? How’s it being disposed of? Those are pretty fundamental questions before you start saying, gee, let’s start making rules about it. First you have to understand your problem before you try to address it.”
‘Bare bones’ rules don’t protect health
Groups also agreed that the proposed rule amendments do not go far enough to protect human health, the environment or freshwater resources, something Rebecca Sobel, senior climate and energy campaigner at WildEarth Guardians, said was mandated in the Produced Water Act.
“OCD’s proposed rules fall dramatically short of that,” Sobel told NM Political Report. “OCD announced bare bones, meaningless rules that would allow the oil and gas industry to more freely transport, manage and dispose of produced water [in the oil field].”
In its own pre-hearing filing, WildEarth Guardians suggests that OCD take a heavier-handed approach to regulating produced water use in the oil and gas sector, and recommends developing rules around storing produced water to avoid environmental contamination and worker exposure; defining specific worker training and certification requirements for workers handling or transporting produced water; and regulating the manner in which produced water is to be transported.
Those types of regulations would better serve the public and help protect the environment, Sobel said.
“The waste byproduct — as it’s under OCD’s jurisdiction in-field — actually has a very large and broad geographic scope in its ability to impact communities, like we just saw in January,” Sobel said, referring to an incident in which a burst pipe spewed gallons of produced water onto a nearby resident’s home, garden and livestock in January.
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“OCD’s proposed regs would do nothing to stop or even monitor an activity like that in the future,” Sobel added. “There’s much more that the public, the environment and freshwater resources need from OCD to assure safeguards and protections.”
A slippery slope
The OCD’s proposed rule also adds a section to the statutes that states any use of produced water outside the oil and gas field would fall under the regulatory purview of the New Mexico Environment Department (NMED).
That last section is the most troubling to Sobel, who said the paragraph “blatantly endorses and assumes off-field use for produced water.”
The 2019 Produced Water Act mandated that NMED’s Water Quality Control Commission (WQCC) adopt regulations for the use and management of produced water outside the oil field. The state later entered into a memorandum of understanding with New Mexico State University to create the Produced Water Research Consortium, tasked with research aimed at filling the “scientific and technical” gaps that exist around treating and reusing produced water.
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Environmental groups and members of the public have been loud and clear about their opposition to using produced water outside the oil field. Those objections were no more obvious than at the series of public meetings held by NMED about the state’s plan for developing new rules, Sobel said.
“Without a doubt, the public was overwhelmingly critical of efforts to more freely dispose or manage this waste, and critical of the department,” Sobel told NM Political Report.
At the time, NMED officials stressed to the public that it would not rush into developing regulations without first studying whether or not doing so would be safe for public health and the environment.
An NMED spokesperson told NM Political Report that the department is currently drafting rules that “prohibit the use of untreated produced water outside of the oil and natural gas industry” and “ensure companies will analyze and disclose to NMED the chemical constituents in produced water intended for treatment and reuse outside of the oil and natural gas industry.”
“Any regulations the Department proposes must be fully supported by sound science, which we’re ensuring in part through the work of the New Mexico Produced Water Research Consortium,” the spokesperson said. “These narrow rules under development by NMED will go through a public comment process, then NMED will present the draft rules to the WQCC. NMED expects to submit the draft rules to the WQCC by the end of this calendar year.”
That next rulemaking will be closely watched, Zupan said.
“Where we really get alarmed though is the next steps that come after this,” he said. “We think this process is headed down a slippery slope to some really bad policy.”
The New Mexico Oil Conservation Commission will hold an online public hearing on the proposed rule amendments Thursday, July 30 at 9:00 am. Details can be found here.