Copyright © 2020 Albuquerque Journal
Before any “black gold” surfaces from New Mexico’s oil wells, operators must use millions of gallons of water to drill and complete the wells.
Now the New Mexico State Land Office will stop issuing easements for commercial sales of fresh water for oil and gas operations.
State Land Commissioner Stephanie Garcia Richard said the shift should encourage the industry to use recycled water for hydraulic fracturing.
“Basically we asked ourselves, ‘Why are we using drinking water to frack?’ And that is at the basis of this policy change,” Garcia Richard told the Journal.
Fracking blasts water and sand deep underground to prop open shale and retrieve petroleum.
For decades, the office has issued five-year easements to access water wells on state trust lands.
The easement terms have varied with each change in administration. Some grantees simply pay $1,000 annually for the well rental.
The office once charged operators based on a percentage of their revenue, then switched to charging for each barrel of water.
Garcia Richard said the easements are “no longer ecologically viable and no longer economically viable,” in part because it’s difficult to verify how much operators should pay and how much water they use.
This fall, the state Oil Conservation Division began requiring operators to report how much water they use to frack a well.
The policy was part of the Produced Water Act, which encourages water recycling in the oil field to reduce strain on New Mexico’s scarce water supplies.
Lisa Henne, a staff attorney and water rights expert with the State Land Office, said most of the easements are in Lea and Eddy counties. State studies have shown that regional aquifer levels are rapidly declining because of years of extensive groundwater pumping.
“State trust land without water available isn’t going to be worth anything in the future,” Henne said. “That’s what keeps me up at night, is thinking about all this acreage, that if there is no functioning aquifer under it, it has no more value for the trust.”
Some grantees that claim to use the water for their own purposes are likely selling that water, Henne said, because the water business is so lucrative in southeastern New Mexico.
The policy change will not affect water sales for agricultural or municipal use.
“Agriculture has no alternative (water),” Garcia Richard said. “You cannot use non-fresh water for cattle or for growing crops. What we wanted to target is the trillions of gallons used to frack that don’t need to be used.”
The office’s Water Bureau estimates that the 15 to 20 existing freshwater easements bring in about $2 million, a small portion of the office’s annual revenue of more than $1 billion.
Theresa Davis is a Report for America corps member covering water and the environment for the Albuquerque Journal.