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.
John Norris is worried about where he’s going to get water in the future. Norris is a rancher in southeast New Mexico, where he runs calf-cow and yearling operations.
“Our water comes from the Ogallala [aquifer]. We’re basically mining this water, whenever it’s gone our water source is going to be gone,” Norris said, adding that in drought years his fields dry up and the grass doesn’t grow.
“Water is the lifeblood of what we do. It’s very important to me to look for a new water source for the future to be sustainable,” he said. “Sometimes we need just a little bit of water to make it through.”
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There’s a chance Norris could someday use recycled produced water to help irrigate his ranchland.
Produced water is an abundant wastewater byproduct of oil and gas extraction activities, including fracking.
A recent incident involving the alleged dumping of produced water on state lands has highlighted the difficulties state regulators face in holding oil producers accountable to illegal dumping.
“If we don’t have proof of it happening, it’s very hard to move forward with a violation,” Adrienne Sandoval, director of the state Energy, Minerals and Natural Resources Department’s Oil Conservation Division, told NM Political Report.
A rancher alerted the OCD in early March of an incident in which the rancher believed produced water was being dumped on state trust lands and a road in Lea County.
“Luckily it was caught by someone locally,” Sandoval said, adding that the individual “took recordings of it while it was occurring.”
A month later, the OCD issued administrative civil penalties to two companies involved in the incident: the oil producer Advanced Energy Partners Hat Mesa, LLC and a New Mexico-based trucking company named Windmill Trucking. AEP Hat Mesa has a contract with Windmill Trucking for hauling fresh water and produced water to and from oil rigs.
“The trucking company is required to have authorization from us and permits in order to haul this water. It is the operator’s responsibility to ensure the people they are contracting with have the appropriate credentials. That’s why they’re both receiving violations,” Sandoval said.
The OCD fined AEP $7,600 and fined Windmill Trucking $8,700 — the first fines OCD has issued since it regained its ability to collect fines earlier this year.
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“Those are just initial numbers,” Sandoval said. “After we issue the initial notice of violation, they have the option of either having a settlement conference or going to a hearing.
CARLSBAD — In the Permian Basin, now the most prolific oil field in the world, hundreds of miles of plastic pipelines snake along dirt roads, drilling pads and the edges of farm fields. But they are not carrying oil. Instead, they’re transporting an equally precious commodity in this arid region straddling the New Mexico-Texas border: water.
“Pipelines are going in everywhere,” said Jim Davis as he drove a camouflage-hued, four-wheeled ATV across his land toward the water station he owns. Selling the water beneath his property to oil and gas companies has given Davis and his wife, who has cancer, a financial security that eluded them for most of their lives. Every day, a steady stream of water trucks flows in and out of his station south of Carlsbad, filling up on his high-quality freshwater — an essential ingredient for hydraulic fracturing, or fracking for short.
Davis, whose property has been in his family since 1953, says he’s never seen so much water moving around the basin.
Penny Aucoin and her husband Carl George were awoken in the early hours of Tuesday morning by the sound of a loud pop and gushing water. “We went out and it was dark at 2:30 in the morning. But when we walked outside we were getting rained on and it smelled like gas — it smelled strongly of gas,” Aucoin said as she recounted the events of the night to NM Political Report. “I said, ‘Honey, where’s it coming from?’ And he was like, ‘I don’t know!’ So he was using his flashlight on his phone trying to figure out where it was coming from.”
The “rain,” it turned out, was produced water, a fluid byproduct of oil and gas extraction activities, spewing from a broken pipe across the street. The water pressure was so high in the pipe that the produced water rained down on the family’s home, livestock and yard a good 200 yards away.
On a chilly evening in October, Santa Fe-area residents packed into the St. Francis Auditorium for the second of what would be five public meetings held by the New Mexico Environment Department on the state’s plans for produced water. It was only a matter of minutes before attendees began interrupting the presentation with accusations of the state poisoning waterways and calls for a moratorium on fracking in the name of climate change. Residents and environmentalists alike are concerned about the state’s plan to research and eventually regulate the recycling and reuse of treated produced water, a byproduct of oil and gas extraction that contains both naturally-occurring minerals, hydrocarbons and rare earth metals, as well as chemical additives and drilling constituents that are used in hydraulic fracking. Every barrel of oil generates four to seven barrels of produced water, according to Bill Brancard, general counsel of the state’s Energy, Minerals and Natural Resources Department (EMNRD).
State Engineer John D’Antonio’s ties to a desalination industry group has some environmentalists concerned about how the state is promulgating new rules to handle produced water. D’Antonio, who was appointed to the position of state engineer by Gov. Michelle Lujan Grisham earlier this year, is listed as a director of the New Mexico Desalination Association, a 501(c)6 nonprofit “business league.” The barebones website doesn’t list its members or board of directors, but the nonprofit’s filings with the Secretary of State office indicates John D’Antonio sits on the board of directors. RELATED: As NM’s water boss, D’Antonio is back on the job
The nonprofit hosted a controversial produced water conference in Santa Fe last year, with the New Mexico Water Resources Research Institute and New Mexico Tech’s Petroleum Recovery Research Center. The conference drew protests from environmentalists concerned about how the wastewater from oil and gas production may be used in the future.
The state is currently gathering public and stakeholder input before developing policy and regulation around potentially using fracking wastewater, also called produced water, for use outside the oil and gas sector. Environmental groups are concerned that the process is being driven by industry interests, and could result in unsafe water being introduced to the state’s water resources.
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Given those concerns, D’Antonio’s current roles as both state engineer and board member to the association is problematic, said Rebecca Sobel, senior climate and energy campaigner for WildEarth Guardians.
While fresh water supplies in the state are slowly dwindling, oil and gas activity generates millions of gallons of produced water each year. The state is currently deciding how best to regulate the use of treated produced water, while researchers, oil and gas producers and other companies are trying to find new uses for the wastewater. Produced water is a byproduct of the oil and gas extraction activities currently going on in two energy-generating sections of the state, the Permian Basin in the southeastern portion of the state, and the San Juan basin in the Four Corners area. The wastewater comes into contact with hydrocarbons and drilling constituents, and is generally considered contaminated. As the state gears up to hold a series of public meetings on recycling produced water throughout October, there are some serious question marks over the feasibility of using treated produced water in applications outside the oil and gas industry.
The U.S. Environmental Protection Agency and the state of New Mexico released a draft report on Friday about the possibility of someday reusing or recycling wastewater from the oil and gas industry. According to the draft white paper compiled by the EPA and three state agencies, “Given that drought is no stranger to New Mexico, decisions about water are growing ever more complicated and meaningful.”
This summer, the EPA and three New Mexico agencies convened a working group to understand and clarify existing regulatory and permitting frameworks and create a road map toward finding other uses for wastewater generated by oil and gas drilling. The draft report lays out various possible reuse scenarios, explains which agencies would be involved in permitting and regulations and parses some of the legal issues. As the authors note, New Mexico became the third-largest oil producing state in the U.S. in 2018 and the industry produces enormous quantities of wastewater. According to the report:
For every barrel of oil, four or five barrels of produced water may be generated: an estimated 168 to 210 gallons of produced water for every 42 gallons of oil produced.
As state agencies move forward with plans to study reusing wastewater from oil and gas drilling, some environmental and community groups want the administration to slow down. They’re concerned about the working group’s quick schedule and lack of transparency thus far on an issue they say demands careful study. This summer, New Mexico signed an agreement with the U.S. Environmental Protection Agency and formed a working group to figure out how wastewater might be reused within the oilfield itself—and someday, beyond it. As we reported last month, the state initiated the process with the EPA. Following the publication of that story, representatives from more than 15 environmental and community groups signed onto a letter to the EPA which said the agreement between the federal agency and the state violates the Federal Advisory Committee Act (FACA) and requesting the federal agency withdraw.