Gov’s half-billion bid on Strategic Water Supply wobbles

An effort to use oil and gas wastewater and brackish deep water as “new water source” removed from capital outlay package to stand alone as a bill

By: - February 12, 2024 5:05 am

Governor Michelle Lujan Grisham, center, holds a news conference to announce a 50 year plan for water use in New Mexico. Environment Secretary James Kenny, left, is taking part in the news conference being held in the Governor’s Office, Tuesday, January 30, 2024. (Photo by Eddie Moore / Albuquerque Journal)

Gov. Michelle Lujan Grisham’s $500 million plan to create a market for treated brackish water, and oil and gas wastewater, faces an unexpected time crunch after it was struck this weekend from a list of long-term funding proposals.

The governor’s much-touted “Strategic Water Supply” will now have to face the gauntlet of committees and chamber votes with a few days left in the session.

Sen. George Muñoz (D-Gallup), who chairs the powerful Senate Finance Committee, told Source New Mexico Sunday that the measure was removed from the capital outlay package, which is scheduled to go before the Senate Finance Committee later today.

“It’s in flux,” Muñoz said in the interview, adding that the Strategic Water Supply bill will contain more details about the proposal.

Capital outlay projects – which involve local improvement and construction projects – are often wrapped into the budget process, and are approved in one fell swoop.

Muñoz expressed misgivings about the state’s plans to make water into a commodity, and said he wants more information, considering it’s a half-billion dollar request.

Maddy Hayden, a spokesperson for the governor, confirmed the Strategic Water Supply is no longer in the capital outlay package, and that a bill will be brought forward. There was no further comment on the bill’s chances.

It’s unclear what chamber the bill will be introduced in, and which lawmaker would be the sponsor. No new bill was introduced Sunday before the Senate adjourned. The deadline to introduce legislation passed on Jan. 31. However, the water initiative can be brought forward by amending an already-filed bill.

This marks a shift from Lujan Grisham’s optimism at a press conference Friday that the measure was funded in the capital outlay package, and that she would continue to push for future water funding.

“You should expect me to push harder on some of that, the strategic water supply is a really important first step to making sure that we’re creating revenue that we can then apply to protecting our drinking water and freshwater,” Lujan Grisham said on Friday.

The governor warned of a more expensive future.

“I think that we’re going to have to do a lot more on water in general, water is going to cost every state including this one, hundreds of billions of dollars,” she told Source NM.

‘A lot of money to spend on something that’s not proven yet’

The $500 million-proposal has prompted fierce pushback from climate groups and advocates, who said that neither the treatment science nor the state’s water data is sufficient.

For every barrel of oil, New Mexico produces four barrels of produced water, according to the Office of the State Engineer. The water contains contaminants such as sand, dissolved oils, radioactive materials, hydrocarbons, and proprietary additive chemicals used in fracking.

Last year, New Mexico pumped more than 64 billion gallons of produced water which outstrips the state’s daily municipal water consumption.

Melissa Troutman, a climate and energy advocate for WildEarth Guardians, said that the state still doesn’t have guidance from scientists about treatments that will work beyond small, laboratory experiments.

“It’s a terrible, very risky investment by the state on unproven technology, and nobody’s asking for the science,” Troutman said. “Half a billion dollars is a lot of money to spend on something that’s not proven yet.”

Troutman is also a member of the New Mexico Produced Water Research Consortium, a private-public entity that’s supposed to provide the data for using oil and gas wastewater outside of the industry. The consortium’s working groups have not met recently, Troutman said.

On Sunday, Troutman said she’s looking forward to seeing more information on the governor’s water initiatives in a bill, if and when it arrives.

“I like that it’s becoming its own thing, it certainly deserves to have a larger conversation around it,” Troutman said.

Julia Bernal (Sandia), the executive director of Pueblo Action Alliance, said the effort to treat produced water is a “bailout for the oil and gas industry,” and focuses too much on making a profit off of the solution rather than scaling back use of fossil fuels.

“It’s this backwards thing because oil and gas is causing climate change, yet, we’re also going to rely on that same industry to implement a just transition, I mean, that just doesn’t make sense for me,” Bernal said.

While Bernal supports efforts to improve clean up and even examine brackish water (salty water found in deep aquifers), she said the plans to do so are vague and missing water data.

“I don’t think anybody should be sure about it, because studies need to be done” she said. “Even with desalinated water plants, we have to ask ‘where is that waste going to go?’ I don’t know, will the state build new pipelines to transport waste from here to there?”

“There’s just a lot of uncertainty at this point,” Bernal said.

What exactly is the Strategic Water Supply?

Lujan Grisham first announced the plans for the Strategic Water Supply during a November climate summit in Dubai.

Treated produced water could be used for building a “clean energy economy” by replacing water used in solar and wind manufacturing, she said, adding the water could be used for hydrogen fuel production – which has failed before in previous sessions.

Since then, few details have been shared.

The initiative is a cornerstone of the long-awaited 50-year water plan Lujan Grisham announced in January. The 23-page document that came with the announcement, does not elaborate on legislative action beyond securing $500 million in severance tax bonds for investment. The plan notes in a “return on investment” that the state would have 100,000 acre feet of “new water” by 2028, but does not provide any supporting documentation for that figure.

The water plan said the effort “will reduce risk for private companies looking to build desalination and produced water treatment facilities to convert brackish groundwater and oil and gas sector wastewater to valuable resources.”

In December, the New Mexico Environment Department announced it would be updating rules to allow for pilot projects for treating brackish, produced and wastewater treatment projects. Those projects are closed, meaning they can’t be discharged into surface waters or aquifers.

New Mexico Environment Department Secretary James Kenney and State Engineer Mike Hamman have made presentations before the legislature promoting the idea during the session.

In a Jan. 22 presentation to the Senate Finance Committee, Kenney said the state government would be “a middleman” in purchasing treated oil and gas wastewater or desalinated brackish water from contractors who treat it, and provide it for industrial uses.

“The state will ideally have a match for every barrel produced, there would be a consumptive use of that water,” Kenney told lawmakers. “So it would never fit into the scenario that it would be discharged into the environment.”

In that January meeting, Muñoz called the idea of making the brackish and produced water a commodity “absolutely scary.”

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Danielle Prokop
Danielle Prokop

Danielle Prokop covers the environment and local government in Southern New Mexico for Source NM. Her coverage has delved into climate crisis on the Rio Grande, water litigation and health impacts from pollution. She is based in Las Cruces, New Mexico.